ChiCon17's Profile

Very interesting article! It raises a lot of questions, many of which have been listed above, so I will focus on one. There is always a temptation with new technology to over-invest and wander down the rabbit hole of things that are interesting but may not add value (one pertinent example could be apple’s investment in Animoji). While the direct costs are often stated as low (adding facial recognition to a vending machine may be a simple low cost sensor), they are often far greater in the form of management attention. Coca Cola should think seriously about whether some of these “advances” are really worth pursuing as a potential first mover, or if they should instead adopt a fast-follower approach and let someone else do the upfront legwork (like figuring out how to use facial recognition data to inform promotion strategy). Is there really an advantage to be gained by doing this first? Or would you capture 90% of the value by waiting, while avoiding distracting management from broader issues (like combating changing consumer tastes for sugary beverages)?

Very interesting article – fantastic microcosm of the larger impact of nationalism on free trade. Your question about expanding production outside of Ireland posed an interesting thought. Would it be possible to increase production in Northern Ireland to take advantage of local supply and retain access to similar import dynamics to Great Britain. That could be an attractive way to reduce risk in a core market while minimizing disruption of the upstream supply chain. More broadly, I think the critical task is to outline the best way to access other markets under a variety of tariff scenarios. Cost will obviously be critical, but so will implementation timing. To the extent implementation could take longer than the phase in of any regulatory / tariff changes, Kerry Group may be forced to act before all of the details are known in order to combat downside risk.

Thank you for pulling this together – very interesting. Mars should certainly be credited for recognizing the severity of the problem at hand, but like many other comments I find the long-term nature and lack of detail regarding the solutions troubling. $1B is a large sum of money, but only a drop in the bucket when it comes to the size and scale of the forces at play to create this situation. Thinking through the lens of a potential shareholder, I would be more satisfied if there were also plans to explore alternate sources of the input. This could serve a dual purpose – 1) creating a sound backup plan that inspires investor confidence and 2) providing pressure on impacted governments to increase their own efforts to combat climate change. Governments are not very responsive to the issue of climate change, largely sue to a lack of interest from constituents, so any effort to frame up the threat of climate change in a more tangible and direct way could be incredibly valuable toward making real progress.

Very interesting take on the impact of climate change on the mining industry. My experience in the industry had given me a slightly different take on the challenges and potential solutions.

1) Minimizing climate change: there is significant appetite for most Western mining companies to reduce environmental impact and improve efficiency. Some of it is PR related, but there are also significant economic advantages to improved efficiency. We’ve seen massive capital investment (e.g. hundreds of millions in Pilbara to switch to autonomous vehicles) in areas where the are cost efficiencies to be gained. This will have an impact on CO2 emissions and energy use. Unfortunately, many environmental mitigation strategies (e.g. wastewater treatment) offer minimal economic upside. This poses a serious adoption challenge given most minerals are commodities, and position on the cost curve is critical to sustained success. This is compounded by the lack of global standardization in environmental regulations. The path forward to more environmentally friendly mining is likely through international cooperation around standards to set a level playing field that encourages investment, or at least does not punish early adopters.

2) Mitigating risks: High profile environmental impacts have absolutely started to influence thinking around risk management, especially flooding. The industry approach appears to be centering around greater integration of key risk areas. For example, many Australian mines are exploring ways to gain greater control of rail to allow them to prioritize their shipments and participate more directly in disaster planning and recovery efforts. Some are even exploring in-sourcing power production to reduce risk exposure. While these strategies risk lower returns on capital, they are viewed as essential insurance to prevent loss of production.

Excellent summary of the key issues, and very helpful in framing up the implications. It is interesting that GM and Ford appear to be taking slightly different tacks in trying to handle this issue, with GM investing heavily in lobbying efforts while Ford has decided to eat some of the cost to take the “desired action” in an effort to win the PR game. I think one of the key questions underlying all of this is whether this is a short flare up of nationalism or a larger trend likely to extend beyond the duration of a Trump presidency. Given events around the world, it is likely also prudent to consider the potential impact beyond North America when evaluation alternate strategies. Both of those components need to be considered, especially when thinking about how to leverage GM’s lobbying efforts. Should they focus on putting pressure on representatives and candidates (e.g. media or inducements) which could be better to stave off a short-term issue? Or do they need to invest heavily in educating the public in an effort to persuade voters?

Very interesting read. There are clearly a significant number of challenges facing Allstate given the breadth and depth of change that they are exposed to across the value chain. Many of the previous comments have hit on the major concern of how digitization will impact the product offering, and consequently the employees / agents and the customer. There appears to be an implicit assumption that the agent model is likely to die given high cost, or at least be forced upward in the wealth band of customers as a premium experience.

I wonder if there isn’t an alternative way for Allstate to leverage digitization internally to harness the cost savings and efficiency of digitization within the existing agent model, and thereby create a differentiated cost-competitive model with broader appeal, while avoiding becoming a niche product or competing directly with direct to consumer online options. A choice to do the latter on a broad scale could be problematic, as low cost may not support the brand investments (i.e. Mayhem) that have enabled Allstate’s recent success.