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On December 1, 2017, aboyajian commented on Kellogg’s Leadership in Fighting Climate Change :

More broadly speaking, where is the logical extent that Kellogg can take this thinking? Certain crops, such as almonds, are widely considered to be far less environmentally sustainable to grow and provide to consumers than other crops. This relates to water usage, and not climate change resulting from greenhouse gas emissions, but it falls within the broader umbrella of environmental sustainability. Does Kellogg take this to the point of exiting product categories where the product itself is arguably not environmentally sustainable in any large scale agricultural growing arrangement? Or do consumer preferences dictate the product offerings?

How does this approach change the order received by a supplier? In a traditional grocery store model, the supplier receives a bulk order from a distributor, who then breaks down larger shipments into smaller tailored shipments that fit the broader but smaller inventory size needs of individual grocery stores. It allows for shipping by the large suppliers to be done most cost effectively because they do large bulk shipments of full truckloads. To now have the grocery store request directly from the supplier would imply the supplier is receiving many smaller orders, which they can either choose to deliver on in less-than-truckload shipments that are more costly, or sit on until they receive enough small orders to fill a full truck, which would leave a grocery store without inventory for a longer period than the traditional method. How is this phenomenon being corrected for?

Have you considered that in cases where costs of enforcing safety regulations are high but customers’ willingness to pay more is limited so that a profitable business model cannot be achieved, but society still insists on the service being offered, government subsidization steps in (the example that comes to mind is airlines)? If the industry can’t profit, government subsidies will most likely be lobbied for and provided, which is the cost then being shared by all of society in the form of higher tax revenue needed to then pay for the greater government spend. In reality this cost can be shifted to future generations by financing government spend with government borrowing, but regardless I view this as the outcome most likely to occur if the trading houses really can’t pass costs along to its customer base.

On December 1, 2017, aboyajian commented on Protectionism Threatens to Cripple US Solar: Spotlight on Sunrun :

Is there a silver lining for Sunrun in that this may create a window where the largest players have the scale and resources to outlast the smaller smaller names that will be forced into bankruptcy by the tarriff, a sort of industry consolidation by evolutionary elimination vs by M&A? Does it also force Sunrun into discovering which of its customers for moral reasons have greater price inelasticity and will insist upon purchasing solar panels even when the price is not competitive with fossil fuels? Can Sunrun actually be even more aggressive in the short term and buy up inventory of cheap foreign solar panels (while they still can) not just for themselves but to also sell to competitors at a profit?

Arturo, how would simple geography limit the ability of Nemak to compete with the incumbent suppliers to European and Asian OEMs due to the added costs of shipping that would come with providing parts to these manufacturers in their countries of final OEM manufacturing completion? It’s worth considering if that cost can be overcome. Separately, is it possible that even with a steep tariff, there is still too great of a difference in labor costs between the US and Mexico for US suppliers to compete, and instead the tariff simply raises prices for consumers without efficiently narrowing the labor cost gap enough to produce the intended effects? Lastly, would it just be possible to either through a greenfield strategy or through M&A obtain a manufacturing presence within the US that prevented Nemak from being exposed to tariffs at all?

On December 1, 2017, aboyajian commented on DIGITALIZATION RADICALLY CHANGES THE MUSIC INDUSTRY :

Seo, how does the ongoing shift of content viewing from televisions to phones and tablets factor into your recommendation that SM next pursue smart televisions? I would think that instead SM would need to partner with the phone and tablet hardware manufacturers such as Apple, Samsung and LG, rather than with either content providers like Netflix and Disney or smart television manufacturers. Content providers such as Netflix, unless they choose to enter the hardware manufacturing space, are unlikely to be able to help improve the quality of music being heard by listeners. Second, your article makes me think of Jay Z’s Tidal music streaming company, which has struggled to grow despite offering its own “high fidelity” music meant to be of a greater quality (and higher subscription price) than Spotify. Lastly, with the increasing decline in revenue from album sales, artists and record companies are increasingly reliant on touring for revenue. Does the music industry want to threaten the live tour revenue stream by helping provide concert-level quality music and visuals into people’s homes via smart televisions?