So European - not European at all !
Alex Pesjak
Enable commitment and acceleration towards Frontier Futures. Brand | Innovation | Change | Platform | Ecosystem | Newsletter #EcosystemEspresso | Video-Podcast #PlatformDisco | VP EMEA McFadyen Digital |ex-Coke|ex-MDLZ
How Schwarz Group is "acting ahead" like a true frontier firm... [and could be the world's multi-life ecosystem platform company]
Un Espresso per favore!
It was weekend and I am glad you take a sip of Ecosystem inspiration. After a good research for one of the prime European retailers this is #EcosystemEspresso #60:
In this edition I put a company in the limelight that less than 5 years ago would not have been there at all. It is so exciting to see a European player act so bold! This is impressive and most likely all linked to the past journey and success of the owner Dieter Schwarz and his leadership team.
As fully privately owned company the moves are faster, bolder and less transparent so far. The #DieterSchwarzFoundation is doing great work supporting and enabling the #E2E #Ecosystem_of_ecosystems in and around #Heilbronn. Inspired by the "density success" of #SiliconValley in the past something bold is happening for Europe, and the European way, well maybe not?!
Dive deeper and see at the end why #Speed and #Scale have to be even higher!
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Quote of the Week:
Ecosystems are the new warehouses. You don’t own them, you orchestrate them. Satya Nadella
Let′s take a big sip of Ecosystem Espresso!
Europe vs. USA - big differences as context
1. Culture and Attitude Shape Business Success:
2. Risk Appetite and Attitude Toward Failure:
3. Access to Capital and Lending Standards:
? The #U.S. offers easier access to capital, with lenders often lending up to 5X EBITDA, compared to #Europe’s more conservative 3.5X EBITDA.
? Private equity and venture capital are more robust in the #U.S., further fueling innovation and growth.
4. Scaling Opportunities in the U.S.:
? The #U.S. economy, with its unified market and favorable conditions, supports large-scale business growth. This is reflected in the dominance of U.S. companies in global rankings for market capitalization and billionaire wealth.
? #Europe’s fragmented market, varying legal frameworks, and limited cross-border banking make scaling far more challenging.
5. Profit vs. Market Share Prioritization:
? #U.S. companies often prioritize market share over immediate profit, allowing them to scale aggressively (e.g., Amazon and Tesla took years to reach profitability).
? #European companies tend to emphasize early profitability, potentially limiting long-term growth.
6. The Fundamental Divide:
? #U.S. business culture values ambition and action, presenting lower barriers to performance and scaling. #Europe’s #cautious and #introspective approach often inhibits potential.
There is nothing new about this 6-point comparison. It is also not new that a cultural shift in Europe is necessary to compete with the U.S. and China in global business.
What is rather new, there are few frontier firms in Europe which we should understand a bit better as they sometimes combine the best of both. Let′s look at #Schwarz_Group!
I do not have a lot of inside information and I needed to rely on the few pieces of information publicly available. Happy if you jumped in to complement...feel invited...
(A) The big picture - strategic framework
1| #European Frontier_firm - simple!
More and more European companies are working with a purpose, but they do not execute so well against it, steering the whole organisation towards it as #Schwarz_Group. Especially the simplicity of the communication is wonderful, especially easy in the English version:
Setting a clear strategic framework - #ACTING_AHEAD!
What a great motto, mantra, theme. It is not necessarily a #purpose but it sets the tone, the expectation. A company that grew up as a tightly managed #discount operation that probably was hierarchical needed to signal clearly what is new and different moving forward.
This new framework came in line with new leadership after years of a far more hierarchical leader. It was the necessary, yet not sufficient condition to point to many new frontiers the organisation would move towards.
Purpose!
We exist to make life better - today and for generations to come.
Part I - We exist to make life better
I am not sure I would call this a great purpose. At first sight it appears to be too generic. We have read similar ones before.
But it is what you make of it. Given the core of the business today is groceries both #retailing and #production (in German "Lebensmittel"): The German word “Lebensmittel” translates literally into English as “means of life” or “means to sustain life.
? “Leben” = “life”
? “Mittel” = “means” or “resources”
Then "making life better" can be achieved.
Part II - today and for generations to come.
What is more interesting is the second part. Today through affordable food and non-food and increasingly also attractive digital and platform offers.
More importantly "for generations to come" - if Europe is a "#data_colony" of #US and #China, then the generations to come will find it harder to thrive. And if the planet is "destroyed" then there is no tomorrow.
I am sure internally there are more details available to specify this and facilitate operationalisation.
2| Strategy: businesses is complex but not complicated
Simple E2E Ecosystem Strategy
The overall strategy is beautifully connected with an E2E lens.
In the transition to a digital business #SchwarzDigits are a separate element, while in reality it is underpinning "around" the whole business just like the #Schwarz_Corporate_Solutions consolidating mobility, real estate, consulting and other services.
While many successful and big food retailers tick most of the items above, e.g. #Migros, #Coop, #Spar and others, they miss the futlureproof elements. They produce meat, roast coffee, grow fruit but not circular or platform business models - digital first.
There are few players that went next level, like #Walmart!
3| European - Non-European overview
I do not want to repeat the whole history or all details. I focus on the big picture in this section!
4| Impressive numbers and meaningful diversification on time
As you can see the majority of business today is still retailing, while all other parts are more or less at the same level. Hence, over the years a strong and efficient grocery discount operating model was perfected.
The group margin is reported to be around 3%. Given the group is a private business, there are only few numbers available. The few are impressive:
While the numbers are great cost increases in energy, personnel most likely have led to the acceleration of other business model elements with higher margins.
Lidl eCommerce and Kaufland eCommerce are two powerful units in the retail core business. Data can be leveraged in house and layered business models like payment, retail media drive high margins based on the brand trust, huge transactions assets-light.
(B) DIGITAL TRANSFORMATION INITIATIVES
1| Discount DNA - digitalising via Lidl Plus App
What most successful discounters are famous for also applies to Lidl with some specificities. However, an innovative move is the addition of the Lidl Plus app. The German online store was integrated into the app and I found PR around it today!
The Schwarz Group’s transformation into a frontier firm goes beyond its European roots, revealing boldness and a forward-thinking approach that sets it apart. Here’s what makes it unique and less traditionally “European”:
Sense of urgency - data in grocery retailing!
Not having data that customers can trust, the integrity of use and not being able to personalise offers, generating insights for innovation, products and services, automation will fall behind.
Even the biggest most successful companies will face trouble and commoditisation in case they cannot leverage the "oil of the presence, not future"!
The app is amplifying the discount promise:
Lidl app has not yet managed to move into a top position in 2023.
2| The Digital Business Unit - #SchwarzDigits
Any food retailer has heavy IT resources given the complexity of the business and number of transactions. #Spar′s ICS IT internal services unit just transformed from on premise into private cloud an the latest SAP tech stack.
The addition of #SchwarzDigits as business unit is however, far more bold and impressive. The narrative was directly linked to the digital transformation and the Lidl Plus app.
The hyperscalers in the US could not tell us where our customer′s data was stored. This was a no go for us. (free after Rolf Schumann, co-CEO SchwarzDigits)
This is not only about #DataSovereignty but #DigitalSovereignty! Schwarz has followed the #AWS footsteps on leveraging what was initially designed and built for internal use for the outside. Covering not only other businesses but government, security etc.
Under this umbrella 4 main areas have been covered so far:
What I really like is the little word #Sovereign. For us Europeans this is important. Using #Whatsapp is not helping here today.
What is astonishing is the boldness of some of the moves. Also here M&A was needed to get onto the pitch. While it was not planned for outside partners and customers at first.
Layer 1: STACKIT as the tech infrastructure for cloud services. Only hosted in #Germany and #Austria (thank you for the trust) driving trust and as first European alternative with impact potential.
Part of the moves are supported here by hiring experienced players that learned their trade in hyperscalers but remained European at heart. Just last week Bernd (Bernie) Wagner was announced. Before as Google Cloud leader Germany. Congrats Bernd!
Now as CEO of STACKIT - I loved the t-shirt before, but I prefer the stackit promise!
Layer 2: XM Cyber a scale up founded by people coming from the "intelligence" space in Isreal as a direct reaction to increasing cybersecurity exposure of the old Lidl set up, where attacks increasingly had the handwriting of states and no longer of hackers.
Layer 3: Aleph Alpha as the #AI play for SchwarzGroup. While #LLMs seem to be covered well by the hyperscalers, the belief is that the unique German machine building, manufacturing know-how with global leaders and hidden champions with massive data, will benefit massively from AI, that is sovereign.
The purpose is influenced by one of the big investors:
Layer 4: #Wire - the only sovereign messenger.
The challenge here will be covered in the end. So far already, without liquidity and same side network effects in B2C and B2B adoption will be little. I have personal experience with trying to move friends and family over to #Signal. But I failed as I needed What's app as there was liquidity and Signal did not have it.
What is nice here it is built for B2B cybersecurity and admin needs. And a move like with #Google #Workspace is possible with #Teams as well ?!
Wire is targeting the enterprise market with huge feature lists, which I will not cover here.
(B) Integration of Environmental Services
The Integration of these services under the umbrella of a new brand #PreZero and a business unit is not just there to help achieve the ambition.
“As companies of Schwarz Group, we do not wait for challenges to become problems. We act ahead in order to secure a sustainable, healthy and safe life for billions of people.” (Source Schwarz Group).
Many companies have set targets by 2030-40-50. Not so many have a roadmap. While also here a lot is new and needs to be solved for, the foot in the door in this circular business world, building and developing people-tech-process will rip lots of benefits.
As always scopes 1-2 are easier - but scope 3 is so difficult as it also covers customers downstream. It is great to hear the innovation and learning (experimentation) is happening in all areas of the future customer journey. E.g. new mobility solutions.
1| PreZero - Taking Circularity = Business seriously
Environmental Services cover many areas of the Climate Goals. The footprint is very closely related to the retailing and production of food footprint of the group. Thus it can support making Lidl-Kauflaund (a simple dual brand model) an E2E success while ripping other benefits:
2| Key Assets and Operations:
Geographic Coverage: PreZero operates approximately 485 locations across 11 countries, including Austria, Belgium, Italy, Germany, Luxembourg, the Netherlands, Poland, Portugal, Spain, Sweden, and the USA.
Material Coverage: The company handles a diverse range of materials, including plastics, paper, metals, glass, wood, and organic waste. Its services encompass collection, sorting, processing, and recycling of these materials, aiming to close the loop in the circular economy.
Scope of Services: PreZero offers comprehensive environmental services such as waste disposal, sorting, processing, and recycling. It also provides consulting on waste prevention and resource efficiency, leveraging innovative technologies to optimize recycling processes.
3| Competition in environmental services
With this set up Schwarz Group already belongs to the largest players in Europe. I need to rely on AI to provide the overview:
It is still in the first innings. In the current period revenues are already higher with € 3,7 Bn. The overview is providing an order of magnitude comparison by size.
While it still a long way to become a big player in the field with operations, M&A has driven the growth already in the past. I expect more to come and see circular platform opportunities - see section F at the end!
4| M&A and concentration
The entry into the new sector required several acquisitions to get a foot into the door:
1. Acquisition of T?nsmeier Group (Germany, 2018):
Target Revenue: Approximately €500 million.
In 2018, PreZero acquired T?nsmeier Group, one of Germany’s largest waste management companies, enhancing its domestic market presence.
2. Acquisition of SUEZ’s Recycling and Recovery Operations (Netherlands, Luxembourg, Germany, and Poland, 2021):
Target Revenue: Approximately €1.1 billion in 2019.
In 2021, PreZero completed the acquisition of SUEZ’s recycling and recovery businesses in these countries, significantly expanding its European footprint.
3. Acquisition of Cespa S.A. (Spain and Portugal, 2021):
Target Revenue: Approximately €1.018 billion in 2020.
Also in 2021, PreZero acquired Cespa S.A., formerly known as Ferrovial Environmental Services, marking its entry into the Iberian market.
(D) PLATFORM BUSINESS MODELS
While most grocery players have not yet even thought about a marketplace business, the SchwarzGroup has successfully launched one and is in progress of expanding it:
1| The Kaufland Marketplace
Moving from a #pipeline business model to a #platform is a first driver of inverting the firm. The base is expanding. Performance was positive in 2023 +3% (while online was negative overall with -9,4%).
2021: Marketplace launched in Germany.
2023: Expansion to the Czech Republic and Slovakia.
2024: Expansion to Poland (245 stores already in the country) and Austria (no physical presence so far)
Number of Kaufland marketplace markets:
Five European countries: Germany, Czech Republic, Slovakia, Austria, and Poland.
Number of Sellers:
Over 11,000 merchants: A diverse and growing base of sellers.
Number of Products:
Over 45 million products: Spanning more than 6,400 categories, covering a wide range of consumer goods.
Gross Merchandise Volume (GMV):
2023: The Schwarz Group’s online revenue amounted to €1.7 billion, reflecting a 9.4% decrease.
The categories Kitchen and Household contributed the most to the positive balance, with an increase in sales of 16 percent compared to the previous year, followed by Living and Furnishing, which saw a 13 percent increase. The Electronics segment also achieved 8 percent growth. Overall, there are 6,400 categories on the marketplace.
(E) Growing the next generation of leaders
This E2E Ecosystem strategy requires both the right talent and #speed2scale.
1| Role modelling new and different behaviour
The challenge is the co-existinence of the complexity of a offline business with 14K outlets in 32 countries and a grown culture since decades. I am not aware of the culture, but I can imagine that a copy-cat business of #Aldi back then and a discounter in food retailing has been or was very hierarchical. With 575.000 employees and a complex business with fluctuations in employees was lead this way back then.
The past CEO was known as tough cookie and called "killer wale". The new CEO is know to be a visionary. Gerd Chrzanowski has the trust of the owner who reportedly is still very engaged in the background.
2| New skills, which Europe does not produce enough of
The employee profile change could not be more dramatic. On one hand many people with retail experience, partially low paid and low educated staff. On the other hand highly specialised top talent with very new skills, the European and particularly the German education system does not produce enough of.
Heilbronn is not the most exciting place for young people today. So, this needs to be changed. The thinking of the leaders of the group is right. They understood the power of an ecosystem where work and life blend. Having well educated people that stay and live here will create #EcosystemInnovation and #InnovationEcosystems. Hence, Schwarz Group initiated and co-initiated building great campuses and places to work.
This is a different approach than #Siemens with their University Ecosystem has taken, which is related to very different technology experts around the world, while #Schwarz can truly create a world around the campuses.
3| Creating attractive places to work and live
The Tech campus will be home to 5K of the 7,5 K people at Schwarz Digits. I do not know about you, but I would love to work in such an environment of great people in architecture that is inspiring...It is still some way to go until opening end 2025, but hey.
The space will feature restaurant, conference and kid care. It will be serviced with different transport and mobility solutions:
The mobility concept of the Schwarz Project Campus is based on three pillars:
? Motorized Individual Transportation
? Public Transport
? Walking and Cycling Traffic
Also here the Schwarz Group is pioneering digital platforms - which is creating added value to employees, partners and brings platform experience also to leaders!
4| Driving AI forward for all - the European way
IP.AI is an ecosystem innovation project. While researching for this article unfortunately IP.AI was down. So, I had to rely on other sources
IPAI’s primary objectives include:
Fostering AI Innovation: Creating an environment that promotes the development and application of AI technologies across diverse industries.
Collaborative Ecosystem: Facilitating synergy-driven collaboration among startups, established companies, research institutions, and public entities to accelerate AI advancements.
Global Competitiveness: Positioning Heilbronn, and by extension Germany and Europe, as a competitive force in the global AI landscape.
Rolf Schumann in a recent podcast explained that he is still very optimistic that Germany and Europe will play an important role in AI. Based on the massive B2B players and data (Mittelstand, hidden champions and DAX).
The subject needs a home, and this is IPAI. A pretty massive development also supported by the Schwarz Group as well as the Dieter Schwarz Foundation.
The establishment of IPAI is anticipated to have significant impacts:
Economic Growth: By attracting AI-focused businesses and fostering innovation, IPAI is expected to stimulate economic development in the Heilbronn region and beyond.
Research and Development: The campus will serve as a hub for cutting-edge AI research, facilitating advancements in technology and its applications.
Talent Attraction: IPAI aims to draw top-tier AI talent from around the world, contributing to a vibrant and skilled workforce in the region.
Global AI Leadership: By creating a leading AI ecosystem, IPAI seeks to enhance Europe’s position in the global AI sector, promoting ethical and human-centric AI development
If you are interested in more images though in German language, check this out:'https://www.heilbronn.de/wirtschaft/digitalisierung/innovation-park-artificial-intelligence-ipai/aktuelles-zum-ipai/neue-einblicke-in-den-ipai.html
1. Initial Operations (2022): IPAI commenced its activities in 2022, with initial operations based in the Wohlgelegen future park in Heilbronn.
2. IPAI Spaces Opening (June 2024): The IPAI Spaces, featuring offices, laboratories, and a visitor center, were inaugurated in June 2024.
3. Main Campus Construction (Starting 2025): The primary campus, located on the 23-hectare Stein?cker site, is scheduled to begin construction in 2025. This campus will encompass state-of-the-art infrastructure, including test fields for AI-based products and services.
4. Completion and Full Operation (By 2027): The entire campus is expected to be fully operational by 2027, establishing a comprehensive AI ecosystem.
5| Bildungscampus
Promote education, share knowledge, venture future” is the guiding principle (Bildungscampus)
As a result Heilbronn has been awarded the title of a University town. This attracts talent and people that want to live in a thriving and pulsing environment. It still will take some time, but foundations are there.
Amongst the institutions there are top ones with subsidiaries:
Amongst others, especially #TUM - leading innovation in industrial spaces globally!
The newest addition from this year is #ETH Zurich:
(F) Missing pieces and challenges
This is my top line assessment based on experience and the information I found in the public domain. It does not necessarily mean that my summary is spot on, although I am carefully confident that some points are valid:
1| General challenges that all are facing
The Schwarz Group, with Lidl and Kaufland at the heart, faces several challenges which are mostly common for all players:
2| 7 speed & scale challenges / opportunities ACTING AHEAD
Here are very specific challenges and opportunities I see based on experience and empiric evidence that have to be addressed or could help close gaps.
#Speed and #Scale as you could already read in the beginning of this #EcosystemEspresso are really not that easy for Europeans. Even with this great set up at Schwarz Group on resources, support and intent.
1| Talent Scarcity!
Tesla has 4 Mio applications of top talent every year. #SpaceX and #Tesla are leading engineering student rankings since years.
Tesla′s talent strategy seems to built around a balance of very experienced leaders and the top talent in the different disciplines who are hard working, physically fit and eager to work towards the purpose.
While Schwarz Group is fully aware of the fact that Tesla/Space X can tap into a huge decade old ecosystem pool of #Silicon Valley and elite universities, they still have to build it.
What I think is great that people like Gerd Chrzanowski or Rolf Schumann are aware of the need to create a great place to work AND living environment for thriving ecosystem innovation and innovation ecosystem.
Like Elon is sharing experts and teams across the entire ecosystem, also Schwarz Group can do that. I found a source that was actually reporting that 400 #SchwarzDigits members have been moved over and into Lidl to accelerate transformation. That is great!
Platform know-how gaps?!
While many talents are there #complexB2B and #circularplatforms are different beasts. Given Europe only has 2,2% of global Top 100 marketplaces, I doubt the bench strength is huge, while exactly this is needed to make the overall strategy scale with speed!
2| Platform Scalability
Transactions vs. seller onboarded
Platforms scale when there are transactions and interactions. It is not about onboarding supply and demand but rather creating in early stages:
While a retail power house will find it relatively easy to onboard more assortment, it is far harder to create transactions. Especially given the already mentioned horizontal, general store like positioning.
The challenge might be over time for the pure marketplace that it is massive but a dwarf compared to Amazon. The above proximity to kitchen and household is an indication of brand-led competence while other assortment parts might not have such credibility over time, especially once more vertical marketplaces are popping up.
According to #Mirakl vertical solution create more traction. And while 45 million products sound a lot the stickiness of an Amazon and the lock in is significant. If the sources are correct, Amazon has 600 Mio products and only 12 Mio are sold by Amazon, the rest is marketplace.
Upside on the proposition - it is too general
According to #Mirakl and BCG 70% of B2C consumers prefer shopping on specialised marketplaces. This is no surprise for more engaged buyers. Just thing sports, fashion, household, consumer electronics.
Schwarz Group "only" is offering more choice in a marketplace. This also applies to Amazon but with more frequency, assortment, convenience etc. We do not need 3 Amazons...
3| Superapp Opportunities
Of course also Schwarz Group could dream of a superapp. Those have happened in China (WeChat), SE-Asia (Grab), LatAm (Rappi)...but not in the west. This is most likely linked to the fact that attempts were not serious enough so far (resources, focus) but also the strategies had flaws:
The illustration above is for #X as the designated everything app. X has many of the items or could easily add them. It is still too early days in my POV for that. However, some key ingredients are already there:
Lidl Plus App
The Lidl Plus app is just at the beginning of the journey and focus has been so far, insights and loyalty. Not necessarily a more mature super app proposition but the door would be open.
Another barrier are the rather rational brand Gestalten of Lidl and Kaufland. It is a no thrill discounter with great quality products at great prices. While super apps might also have other brand components to it.
4| Operating Model alignment
The operating model is how the business model is ultimately delivered. I use a framework of:
The operating model needs to be in line with the business model. A pure matrix organisation that is functional only, might be far too slow to move into scale for the new parts of the business. While more advanced operating models are challenging to establish in light of the required speed in competition with #hyperscalers.
Without something like a dual operating model (running the business and changing the business in parallel) this is extremely hard.
Opponents might be waiting for after the stato nascendi
While the retailing and production operation today still follow a traditional operating model, the digital and circular side requires innovation across all levers. There will most likely be tensions in culture and resource prioritisation, especially when results and momentum are not in line with expectations for the new parts or when the owner is no longer around. Too massive is the difference between revenue here vs. there, and we know this vs. let the US folks do the digital.
But wait until challenges arise and get big. I am not suggesting this is the case, but very often it is.
5| Governance challenges
If we look at the funding rounds of #OpenAI and #XAI (approx USD 6 Bn each) then it is clear that even € 500 Mio is not a lot. And if models require data quality /quantity and compute power, then LLMs are out of reach already, which is confirmed.
#AlephAlpha CEO Jonas Andrulis added that the huge sums of money that Big Tech companies like Google and Microsoft are throwing at GenAI is creating an uneven playing field that’s hard for a startup to succeed in (source Bebeez).
A future backwards proposition and target cost model are essential
“There are strategic interests that are disrupting this market. Tech giants aren’t seeing this as a working business model by itself but as a tool to strengthen existing models. They don’t need to get a ROI on LLM investment. Jonas Andrulis
Hence, a too fragmentised internal set up and goal setting might undermine ripping the ecosystem benefits. While Elon, Jansen, Sam, Jeff can decide for themselves more or less different unit leader with such a big business might find it hard. So steering the AI development without short-cuts or weakening the "sovereignty" space is not that easy in the above context. So far it appears more that "AI is there as well, but sovereign" but it is not so clear, what problem is actually solved and what value created. Throwing too much money in early stages at start ups is not a good recipe either.
6| Circular Platform Utilization
While #PreZero is a great and growing engagement in waste management, water recovery and recycling different materials, we saw the size disadvantage in the table before.
Given the retailer at heart #recommerce, #RMS (return management systems) and #resale_as_a_service are an opportunity to go full circle together. Especially high value / high volume items are driving business in the multi-life stages.
Consumers will spend in Omnichannel retailing immediately
What we already know from Omnichannel services like click & collect or others are driving business. Once people are in store, they will also shop.
Here it is even better as traded-in items will be paid out at collection points. This ad-hoc digital "income" will be spent immediately. We have evidence that returning customers that trade in product for refurbishment or end of life are converting into business beautifully (e.g. 90+% in sport retailing case).
As Omnichannel retailer store collection points and reverse logistics can be leveraged or potentially even better expanded into multi-life ecosystem play.
Retailers are always concerned about footfall and frequency. There you go a new level of the business case and buy-in from the retailing and production side of the business might be on your way!
Circular platform race is on - and fragmented
The only global database of circular platforms which was collected by us and curated by Peter C. Evans, PhD has 280+ entries. What is well visible, different sectors with different #propensity to go full circle. The market is still fragmented, but consolidation is already under way.
Schwarz Group could leverage the unique E2E ecosystem to aggregate and operate such platforms in the PreZero space and also in the high value sectors:
Through acquiring or partnering with start ups/scale ups with great tech stack, brands and talent could bring the acceleration of #PLG (Product-led growth) next to #SLG (sales-led) and #MLG (marketing-led).
Going full circle together (platform) and not going full circle alone
DHL and others in reverse logistic are trying to get a slice of the pie. #AWS and #Zalando are already playing on the ecosystem level with transactions. So time is short.
7/ Brand Equity
You are almost done now. Thank you - you deserve another Espresso or a cookie now...
While the brands #Lidl and #Kaufland are powerhouses in their home turf, they lack the equity for B2C super app or other spaces for now.
Hence, it is very positive that Jens Thiemer from BMW joined Lidl. The announcement dates back a year ago.
#BMW is a very well managed brand from a design and communication POV. It has upside on Business Model innovation which to me has to be part of the brand.
Brand Architecture now and future backwards
The speed at which Schwarz Group has been, needs to move and even requires further acceleration, is making it pivotal to have somebody determine the ecosystem brand architecture.
This is not a trivial task once all business units have fired their shots rather independently. Reversing this and bringing it into a meaningful "Acting Ahead" overall logic with clear vertical and horizontal separation based on principles is expensive and hard as scaling speed is so essential from the beginning on.
In Summary:
Dear Schwarz Gruppe - you are acting ahead like a frontier firm - and there is no "Multi-Life Ecosystem Amazon" yet on the planet ;-)
Have a great start into the week!
Come back next week please.
Alex
Thanks for providing this overview of the Schwarz Group. Acting ahead is a great concept to frame corporate strategy and create organizational and network alignment. The key is knowing what to act ahead on!