Anuj Shah

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Great choice of company and very thorough analyses, Ravin. I enjoyed reading through the essay. I believe that UPS will be hampered significantly due to isolationism as there will be a significant drop in cross-border transport of goods and in fact it would be great to dig deeper into the trends of traffic in general and then juxtapose that with the traffic from primarily isolationist countries. This can potentially verify the hypotheses that its impact will be significant. Also, I believe that isolationism will most likely be transient. It is not viable for every country to try and improve trade deficit, become self-sustaining and make companies pay the price for that. I believe it was overall a zero-sum game when we look at all countries overall.

In addition to your recommendations on making investments in short-haul domestic transport and in quick local delivery, I would proceed with caution. I think a knee-jerk capital intensive reaction may not be the best idea. Flexibly expanding operations in the domestic space might be better (perhaps through an acquisition, which they can eventually spin-off?). I recommend this inherently with the implicit assumption that isolationism is not here to stay.

On December 1, 2017, Anuj Shah commented on Will Brexit spring a leak in AstraZeneca’s talent pool? :

Very interesting analyses on the potential implications of Brexit on talent acquisition and R&D – both incredibly important areas for a pharmaceutical behemoth like AZ.

My two cents on your analyses are that there may not be a very strong correlation between Brexit and the difficulty in getting top tier talent in general. I assume that the relaxed norms being applied to EU folks will no longer be available, however, it should still be reasonably low-cost to hire people. I do not expect that Brexit will have very stringent ramifications on work visas. However, I would definitely be curious to learn more about the same.

Oliver raises a great point on whether isolationist moves mean more M&A activity triggered by “big pharma” outsourcing their innovation to start-ups. I believe that some important considerations in that analyses will be the cost of acquisitions, which typically tend to be quite high for innovative drugs compared to the cost of acquisition compared to the cost of moving R&D facilities to some other technologically advanced and “liberal” country in EU – perhaps Germany or even some emerging country in Asia / LatAm?

On December 1, 2017, Anuj Shah commented on Coca-Cola: Sustainability Visionary or Villain? :

Very interesting article on how the environment-focused strategy roll-out of a “socially responsible corporate” could potentially be resulting in a net negative impact for the communities around it. To your question on what Coke should do regarding operational facilities in water-stressed areas, I believe there are two core issues that coke needs to think about:

1) In every water-stressed area, look into what the core sources of water usage are and potentially what are they going to be replacing, when they decide to open a plant – is it agriculture, other industries, or simply the water for basic use of the community? That may govern the level of damage they cause.

2) For the water that they use, Coke needs to ensure that there is no contamination that occurs due to the wasteful materials that are released into the water-streams. This was one of the major reasons for the issues they faced in India.

An estimation of value creation should not just be measured in terms of the profits and employment created in a country by a corporation but they need to employ more progressive approaches such as “True Value” generation, which also takes into account the externalities that are caused by corporations on the environment and local communities.

On December 1, 2017, Anuj Shah commented on Supply Chain as Source of Competitive Advantage :

This case very well summarizes what a well-developed consumer goods company such as P&G can do in order to stay “ahead-of-the-curve” in the world of rapidly digitizing supply chains. The Supply-chain 4.0 framework is also a comprehensive “ready-reckoner” for companies to adopt the best-practices in digital supply chain.

Few areas which we could explore further based on this is the scale of capital investments that have been made by P&G to develop the infrastructure and how they plan to be cost-competitive after introducing these. For e.g. will there be significantly more infrastructure that they need to set up physically and in terms of human capital to run this smoothly?

In addition, I would also be interested to know how downstream players in the supply chain respond to this. For e.g. as the case rightly points out, in emerging markets such as India where technology penetration is low, it will be considerably hard to implement such solutions in isolation and hence I think implementation of Supply-Chain 4.0 could be tricky. Potential solutions could involve joint investments along the supply chain by large distributors and retailers along with manufacturers to streamline the entire supply-chains across regions.

A very interesting article on how chocolate production is being affected by climate change and very informative as well about the specific conditions that cocoa plant needs to grow in. It would be great to know further about how much of the production for Cargill is going to be affected by this and the cost implications for that. Does 89.5% of land becoming “less suitable” affect the productivity greatly?

It is also very interesting that Cargill is taking a 10-30 year view on developing goals for sustainability. It seems a little slow to act given how imminent the impact on their operations could be and I would be interested to know your thoughts on the same. In addition, 4 out of the 5 sustainability goals have no quantitative criteria to measure them.

Lastly, I agree with Henrique’s observations on how cocoa plantations can become a long-term business for investment which is high-risk and high-return with the suitable land gaining value significantly. I would also be interested to know what alternatives that type of land would present in addition to being suitable to cocoa and how that will also impact the supply of cocoa in the future.

This is a very interesting article and it was great to know that the FDA has mandated digitization of supply chain for drugs in the US as it has significant implications on the safety and has been an issue widely discussed in India as well.

I agree with your analyses on compliance of ABC with regards to the regulations. It is a great strategy and could also be a competitive advantage for them, given their prior experience in inventory management software solutions. However, I would be careful before “productizing” this solution and selling it to smaller players in the pharmaceutical industry. Given the rapid changes in technology, I am not sure if this is their core competency and hence with the advances in block-chain etc that you rightly allude to, there can significant threat to any revenue stream generated through the commercialization of this technology. It would be better positioned as a “value-added” service that they may offer to other players in the supply-chain where they share strong relationships and not launch a full-blown strategy around it.

Also, your question regarding whether the lack of adoption on technology changes by smaller players causing drug prices to rise up is a very interesting observation. My guess is that given the skew in sales by “big pharma” it is unlikely that large volume drug prices will be affected by this. However, there could be certain drugs which are impacted. My anticipation is that if the drug would fall in the “essential” medicine category, it is likely that government may intervene and introduce ‘price ceilings’ to protect consumer interests. However, it would be interesting to see how this plays out.