Anonymous 8

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Very interesting read Troy. I agree with you that Trump’s nationalistic policies represent a significant threat to GM. However, I think your suggestions to build redundant plants, hold more inventory and onshore manufacturing would be overreactions. All of these actions would increase costs, which would most likely force GM to increase car prices. They already face intense competition and higher prices would make it more difficult for them to compete.

But as you point out, taking a short-term hit would be worth it if it benefits the company long-term. I just believe the threat of a trade war or global conflict are overstated.

On November 30, 2017, Anonymous 8 commented on Ford: Fusion Across Borders :

Great article Alberto! I agree that Trump’s trade policies are short-sighted, but I disagree with your assertion that Ford should move forward with building the Mexican plant (at least for the time being). President Trump has shown that he is willing to call out and criticize companies by name. If Ford challenged the president and moved forward with building the plant, Trump may have tried to make an example out of Ford by publicly punishing them with a tariff. Furthermore, Trump supporters may have boycotted Ford. Trump’s position and following give him the power to decrease Ford’s revenue and increase their costs. I would argue that Ford would be better off by trying to fly under the radar.

On November 30, 2017, Anonymous 8 commented on RFID ENABLES INVENTORY ACCURACY AT MACY’S :

Great article! I agree that Macy’s movement to digitize their supply chain will improve efficiency and lower costs end-to-end, but I doubt that these changes will be enough to overcome the e-commerce threat. Structurally, big box retailers as they currently operate cannot compete with the Amazons of the world. As you argue, Macy’s needs to double down on their “Buy Online, Pick Up in Store” program and re-imagine the in-store customer experience. I’m not fully convinced that Macy’s can successfully fend off leaner online competitors, but the actions you suggest represent their best chance to do so in my opinion. As to your final question of whether the benefits of RFID and digitization are worth the cost of implementation, I believe they can’t afford to not make these changes. They’ll fail if they maintain the status quo.

On November 29, 2017, Anonymous 8 commented on UnitedHealth: Losing Ground to New Entrants :

Great piece Faraz! I agree that the future of medicine will be digitized but I, like you, wonder whether United can successfully compete in this new world given its structural disadvantages. The business was originally set up to serve a less technologically advanced market, and I’m not convinced they will be able to restructure in a way to successfully compete with cheaper, simpler new entrants over the long run. It will also be incredibly expensive to change. But luckily for United, they have the financial resources to attempt to make the transition.

In regards to your other question about whether United should attempt to digitize given the current healthcare policy uncertainty, I think they still have to. Even if healthcare policy has not caught up, digitization represents the future of healthcare.

Great article! Nestle is facing tremendous climate and regulatory headwinds that seem difficult to overcome in the long term. With water becoming scarcer and scarcer, I agree with all of Nestle’s actions to date and your proposed actions. Unfortunately, I don’t believe any of these actions will be enough to fully mitigate the industry’s long-term challenges. Additionally, most of these actions will increase the costs of bottling water making Nestle and others less competitive in the marketplace.

Your question regarding the role of governments in pricing and selling water further illustrates the challenge Nestle is in. As water scarcity increases, I believe governments will get more involved in regulating water distribution, which will in turn increase the costs to bottle water.

With climate change trends increasing supply chain costs, Nestle and the bottled water market may be fighting a losing battle.

On November 29, 2017, Anonymous 8 commented on The Climate Change Concern for PepsiCo :

I agree with the author’s underlying argument that projected declines in agricultural yield and fresh water supply represent a significant threat to PepsiCo. These expected climate changes will drive up costs across the supply chain for Pepsi and the entire beverage industry.

However, a couple of key questions for me remain. How much time does PepsiCo have to effectively respond to these threats before they substantially increase costs? If these are longer term threats, Pepsi could focus today on projects that immediately improve efficiency and decrease costs while putting other projects that have more of an environmental impact but less of an economic impact on the back burner.

Additionally, it currently appears that Pepsi’s sustainability program benefits both shareholders and society at large. But, when shareholders’ interests conflict with environmental and societal interests, who should Pepsi prioritize? I believe shareholders will receive priority, and, if that happens, regulators will be required to further protect society’s interests.