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It seems that the overall implication of this protectionist policy will ultimately be detrimental to the end consumer, as shown by the fact that Tesco’s immediate reaction is in fact to stop stocking imported products, as well as to pass increased costs through to the consumer. It will be interesting to see how the pound stabilizes as the terms of Brexit and new trade policies become more clear – no doubt the politicians who lobbied for Brexit did not intend for this to be the long-term outcome? Additionally, if the consumers are left wildly unhappy, could there ever be a path to reverse the Brexit decision, or is it just too late, and this will be the new normal for UK consumers? On the flip side, as the UK market adjusts, I wonder if domestic food production will in fact increase to ease these concerns -and if so, how would the costs of this compare with current costs of food products from the EU?

On December 1, 2017, A12345 commented on Driving into the Unknown: Ford Motor Company and NAFTA :

Very interesting and timely issue to tackle. I find it fascinating and telling that when Trump attacked Ford for manufacturing in Mexico, instead of moving the proposed jobs to the US, they moved them to China – yet another low-cost labor location. I think this mindset speaks strongly to the fact that in the long-term, protectionist policies and tariffs ultimately are most detrimental to local consumers – if Ford were forced to locate manufacturing in the US, the prices of Ford Cars would be exponentially higher. If, to promote this domestic production, there were additional tariffs placed on imported cars, the customers would either way face significantly higher prices, and the industry would be driven to a state of reduced competition I think this makes an interesting parallel to recent class discussions we have had about how the government could focus more on worker-retraining in an effort to create jobs, rather than attacking industry in a way that is ultimately value-destructive.

Great analysis of Disney’s actions in this rapidly-changing world. It seems like this sector currently has a significant number of players, and thus far, consumers seem to be OK paying for multiple services and switching back and forth depending on content. However, this user experience is clunky and not ideal – it seems there is definitely room for consolidation, and that could be in a number of various directions among content and platform providers (as you alluded to). I would worry a lot about Disney continuing to sit this out – they definitely retain a monopoly of sorts with the quality of their content, but I would worry that Netflix is catching up quickly (and has recently moved past TV and into full-length feature films) – I think a key question is, in the long term, what will win out on customer stickiness – will quality of content continue to be more important than platform? Or, if the discrepancies in quality of content narrow enough that Disney loses its edge on that front?

On December 1, 2017, A12345 commented on H&M adapting to the digitalization of retail :

Very interesting problem facing H&M and other retailers. I think you make great points about improving data analytics as well as the ways in which ‘going digital’ can impact the culture of a company. In terms of a fashion retailer moving more digital, one thing that may be particular to H&M (and similarly stores like Forever 21, etc), is that they tend to be fast followers in terms of fashion – they are really a tool to disseminate more ‘high fashion’ trends to the masses – so in my opinion, data analytics and speed to market is in fact significantly more important to their model than creative design. One other thing I wonder is how the upgrades to the supply chain you mentioned tie into their online sales strategy – I’m curious how inventory levels might change or be optimized as they can move to holding inventory in more central locations rather than distributing among stores.

On December 1, 2017, A12345 commented on A Small Company Setting the Standard in a Big Way :

Patagonia is a very inspiring story as to how ethics and awareness can permeate everything a company does. While many companies can potentially be accused of “greenwashing”, or at the very least being a follower in the sustainability context, and implementing changes only after being subject to social pressure, this is certainly not the case for Patagonia. I think you raise a great point as to whether all the significant actions that they take detract from maximizing shareholder value. In my opinion, Patagonia is a company which is wholeheartedly pursuing the assertion that stakeholder value is more important than shareholder value. It will be fascinating to see how this plays out in the macro context – hopefully we will see more firms do something similar. What we need in addition to companies like Patagonia opening these opportunities is investors and customers supporting and validating this mission-driven model – only then can we achieve the necessary scale and volume of change to make a difference in global warming.

On December 1, 2017, A12345 commented on Amazon: Winds of change :

This is a terrific example of a company taking a leadership role in fighting climate change by taking decisive actions to take a stand. There are also additional benefits of this program to Amazon which make it surprising that more similar companies do not take advantage of the opportunity to directly source renewable energy – notably, the fact that for a business which is very electricity-dependent (even though cloud uses much less electricity than a traditional data center, I have to assume that a cloud service center still uses significant electricity for the computer equipment), directly sourcing electricity provides a long-term hedge against rising electricity prices. Electricity prices have historically risen over time, and locking in electricity prevents amazon’s margins from being exposed to this. However, one thing that I would be curious to push more on is the extent to which Amazon (whether directly through asset ownership or indirectly through a PPA price) benefits from the numerous government incentives for which wind is eligible (notable the Production Tax Credit), and the extent to which they would continue this strategy if they were not able to benefit from these and therefore likely would have to pay much higher prices for their renewable energy.