Ashley V

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On December 1, 2017, Ashley V commented on What Walmart Wants for Christmas: A Digital Supply Chain Makeover :

Thanks for this article, Arthur! The comparison of mega-giants Walmart and Amazon is definitely an interesting one, due to their equally similar and divergent strategies for delivering value to consumers. Walmart has historically focused on cost control and passing those savings onto customers to deliver on their “Every Day Low Prices” customer promise. Amazon, on the other hand, leverages such supply chain scale to build a trusted customer base for it’s web services, as well as to fund technological innovation.

While Walmart has been very successful in its cost control mission, I truly see Amazon as the innovator in this space. For example, Amazon recently announced new technology that creates a check-out free grocery shopping experience. The technology allows you to enter a grocery store, grab everything you want, and then leave, without having to stand in line to check out. The items will be charged directly to your credit card upon exiting the store. This technology creates customer value and eliminates labor costs. Walmart’s digitalization efforts simply lag behind Amazon’s, and this creates a real competitive threat for Walmart.

To answer your question about an internal innovation arm, I think Walmart absolutely has to invest in innovation to remain competitive, not only in response to Amazon, but to new entrants as well. As we learned in Clay Christensen’s Theory of Disruptive Innovation, low-end disruptors overtime become at-par with the other competitors in the market (such as Amazon) and leave room for new disruptors to emerge. Digital innovation is one much-needed step to prevent such disruption.

Your article helps illustrate a continuous issue in the healthcare industry. Due to heavy regulation and dependence on reimbursement, the healthcare industry lags far behind in technology adoption than other industries may. My primary physician still uses a fax machine. When I was selling Surgical Gloves for Cardinal Health, I spent many days in Operating Rooms that used whiteboards to track patient movement from pre-Op to the Operating Theater to Recovery, instead of computers. In fact, I was amazed that an anesthesiologist was in charge of “running the white board”, using their $300,000 degree to draw a chart.

I provide these examples to illustrate the point that the healthcare industry is unable to react to disrupting innovations like other industries can. For example, digitization has become expected by consumers. They want to be able to use Facebook or perform a Google search for free, without reimbursing the company for the heavy investment in the technology platform. This consumer expectation if offset by technology companies finding new ways to monetize their services, through selling data and advertising. However, regulations such as HIPPA prevent the healthcare industry from selling data to make up for investments in technology such as the one Partner’s made that resulted in substantial losses. Partner’s also has very little price control, given the reimbursement levels set by Medicare, to offset any investment they may make.

You’ve done a nice job demonstrating the risks inherent in such a highly regulated environment. Unfortunately for patients, the very industry lagging behind in digitization is the industry that can benefit from it the most, improving patient outcomes in the process.

I love this article, Jared. I commend you for picking a topic that stares the issue of climate change so directly in the eyes as the topic of the meat industry. If I could, I’d like to take this topic a level higher to explain why I am as cynical as Megan is about Tyson.

According to scientific research and backed by recommendations by the Food and Nutrition Board, Americans should consume between 46 and 56 grams of protein per day. However, the average American currently consumes 70 – 102 grams per day. [1] In fact, many intelligent consumers are tricked into believing that they need to increase their protein intake in order to be healthy. My own father drinks a whey protein shake every morning, even though his daily consumption of fish, chicken, and legumes is enough to provide him with sufficient protein, even with his dedication to exercise.

This high level of protein consumption is due largely to lobbying efforts by the meat industry, including Tyson. Despite strong scientific evidence that reduction in red meat consumption reduces risk of cancer, heart disease, and contribution to climate change, the latest revisions of the Dietary Guidelines for Americans failed to mention any recommendations to reduce red meat consumption. [2,3]

Thus, despite Tyson’s efforts conserve water, reduce GHG contributions, and invest in alternative protein sources, Tyson is a major contributor to their own problem. I agree with Megan that the $150M investment in Beyond Meat is measly at best. The fact is that truly mitigating the impact of their operations on the climate would require people to eat less meat, and Tyson simply won’t allow that to happen to their bottom line.




On December 1, 2017, Ashley V commented on Nespresso: Protecting the World’s Best Coffee :

As someone who recently purchased a Nespresso machine on black Friday and who has a love of coffe, I am not encouraged by the vulnerability of Nespresso’s sourcing of high quality coffee to the impacts of climate change. However, I am encouraged by the company’s focus on taking action.

It appears that Nespresso’s actions fall into two categories: mitigation and adaptation. Through Nespresso’s commitment to recycling and to becoming carbon neutral, they aim to limit the impact of their operations on the environment. However, many of the initiatives you describe above fall into the adaptation category. As global temperatures continue to rise, Nespresso aims to protect its coffee crop through tree planting and soil conditioning efforts, rather than working with other players in the agriculture industry to prevent these measures from being necessary in the first place.

As for the short- to medium-term risks to Nespresso, I believe they are doing a sufficient job protecting themselves. Their AAA sustainability program provides a positive outlook for their supply chain and I am not concerned about the potential price increase to consumers. Owning a home brewing machine (especially one with such a high price tag) provides high switching costs for current consumers. In addition, the Nespresso brand provides an air of exclusivity already, meaning their consumers are likely not as price sensitive as Keurig’s for example.

I agree with you, Brooke, that Nespresso may want to diversify its product offerings to protect itself from future risk. However, climate change will have major impacts on all agricultural products, including tea and food products. Perhaps another option is for Nespresso to diversify into high-end kitchen appliances, a category Nespresso machines would slot nicely into. Either way, this issue helps to highlight the important role of companies in reacting to and preventing climate change.

This is such an interesting ripple effect of Brexit that I hadn’t previously considered. I’m glad to hear from JJ that the British consumers managed to get their hands on their beloved Marmite after all!

This example highlights the massive impact the work of political actors can have on not only the global business context, but on their country’s citizens as well. I am reminded of two in-class discussions that apply to this topic. The first is our discussion in Li&Fung regarding a “borderless supply chain”. With growing isolationist movements in countries with large economies, does the concept of a borderless supply chain still hold as a maximizer of efficiency? Or will companies be forced to forgo cost savings internationally and turn to localization, ultimately increasing prices for the very consumers who voted for Brexit-like policies in order to improve their own economic situations? My belief is that isolationism will have long-term damaging effects on the domestic economy, but only time will tell.

I am also reminded of our discussion in FIN 1 today regarding the role of government in shareholder capitalism. If, as Professor Malloy says, the evidence strongly supports shareholder capitalism as the best system for rewarding society, what is the role of government in that society? Do moves like Brexit hinder shareholder based capitalism in a global context or provide necessary intervention?
Who knew Marmite could be such an illustrative topic to help me develop more curiosity about the role of government in business! I’m looking forward to connecting the dots between TOM and FIN, and discussing Brexit in more detail, in BGIE next semester.

This is a very interesting article about one of my favorite topics – the manufacture and sale of commercial aircraft. I would like to highlight two addition pieces of context that help illustrate why Bombardier is willing to price below cost and why Airbus was so eager to jump at the partnership opportunity with the Canadian manufacturer.

Boeing and Airbus have been at war with one another for over 20 years regarding government subsidies. In fact, Boeing dedicates a page on its website to educating consumers and investors on what it calls “illegal government subsidies” provided to Airbus by various government agencies in Europe. ( Boeing alleges that these subsidies have provided Airbus with a substantial advantage in the commercial aviation market, as evidence by Airbus’ quick ascension to 50% market share. It is unsurprising, then, that Boeing reacted aggressively in pursuing action against Bombardier when they entered the US market with their C-series aircraft. It is even more unsurprising that Airbus, who disputes Boeing’s claims of wrongdoing, jumped at an opportunity to gain footing against the Seattle-based giant in the US market.

However, another macrotrend in aviation is at play here that may at first appear less significant, but has very real competitive implications for Boeing and Airbus alike; the move to regional jets. According to Patrick Smith, author of Cockpit Confidential, US airlines began shifting many of their domestic routes from larger narrow- or wide-bodied aircrafts (such as the Boeing 737, 757, or Airbus A320) to regional jets (such as the Embraer 145 or the Bombardier CRJ-700) as a means to provide greater customer choice in departure times and gain advantage over competition. This resulted in a growing market for regional jets in the United States. This trend, coupled with the projected failure of super-jumbos (the Boeing 747 is largely being retired by US airlines, and many OUS carriers are backing out of leasing agreements for the Airbus A380), should be of concern to Boeing. I agree with your suggestion that Boeing should focus less on government intervention, and more on creating a product line that meets the needs of their customers, either through in-house development or a partnership with regional jet manufacturers.