Dan Waldron's Profile

TGD – I really enjoyed reading your post! The topic and the company are both fascinating.

I really liked the dichotomy that you highlighted for Monsanto – that they are both likely to gain and lose from climate change. The loss that Monstanto potentially faces from unpredictable weather is not easy to understand for the average person (i.e., me) and you explained it (and the rationale for acquiring ClimateCorp) extremely clearly. I also really liked the implication that Monsanto is not just a seed manufacturer but a “data company” that leverages its enormous quantity of agricultural and climatic data to optimize seed production and distribution, and sells its data capabilities to other companies.

To answer one of your open questions – I think that Monsanto’s move into data science is absolutely consistent with its core business of developing and marketing agricultural products. In many ways, you can think of Monsanto as similar to a CPG company like Nestle. It develops products that consumers want, manufactures them, then sells them to distributors and end users. In the case of Nestle, the ability to analyze consumer data (e.g., where they go, purchasing patterns, etc.) has been invaluable to product development. Likewise, the ability to analyze data and draw insight from it will be a key competitive differentiator in the agricultural products industry.

To your second question about the controversy around Monsanto – I am not sure that there is a link between GMO and climate change. However, I do think there is a causal link between mechanized, industrial agriculture and climate change that Monsanto does perpetuate. You mentioned that the FAO estimates that food production has to double by 2050 in order to be able to supply a growing global population. However, there is a large body of research and theory that shows that under-nutrition is not (or at least not only) caused by environmental factors but by people [1]. People don’t share food equally, and people with food often waste it and don’t give it to people who need it. One way to feed the world is by sharing food better. Monsanto’s approach of “feeding the world through math” ever more agricultural innovation may in fact contribute more to climate change (more agricultural land, more food wastage, more water usage) and exacerbate the problem.

[1] https://www.pri.org/stories/2017-03-27/drought-doesnt-cause-famine-people-do

Curtis, this is a fascinating post! I really liked it. I had no idea that the rocket launch industry has been under so much pressure from trade isolationism in the last few years. I really liked your insight into the relationships between the space industry and global political events, as well as your insights into the business side of the launch industry. It is really interesting that ULA is investing in a vehicle that is likely to be uncompetitive vs. SpaceX. Even from an outside perspective (having listened to various Musk speeches about the cost advantages of a reusable rocket), it does strike me as strange. There must be a rationale for investing in Vulcan – whether it is because they believe SpaceX does not have the capacity to do the number of launches that will be required, whether it is the first step in investing in a series of increasingly more economical (albeit not reusable) rockets, or whether there are other advantages to the rocket (e.g., able to handle bigger payload, etc.)

To answer your question about whether it is worth developing a new launch vehicle, with the ban being over – I think it is worth developing a new launch vehicle capable of using engines that come from suppliers which are less ‘risky’ to source from. The current situation means that ULA is sourcing from a single supplier that has high political risks. To de-risk the long-term sustainability of ULA, it is important to de-risk the supply engines.

I think your post gave a great overview of some of the challenges facing Walmart in terms of potential increasing regulation on imports to the USA and Walmart’s ‘made in America’ response. I especially liked the comparison of Walmart’s $250m commitment vs. its $480bn sales value, showing the true extent of Walmart’s commitment to ‘made in America’.

To answer your question about whether import duties would result in higher prices for consumers – given the experience of consumers in the UK with the post-Brexit devaluation of the pound (and resulting higher cost of imports), I believe it is likely that a portion of the import duties would flow through to consumers. Walmart has enormous bargaining power with its suppliers (given its enormous scale in the US and internationally) and would likely be able to reach a favorable agreement with many suppliers to reduce cost of imported products, if import duties were put in place. However, Walmart will likely have to bear the cost of some of the import duties, particularly in goods supplied by large suppliers such as Unilever, Nestle, Proctor & Gamble, etc. Walmart’s customers are generally price sensitive and therefore Walmart needs to ensure its prices remain low vs. competitors. It will therefore only pass on a small portion of its increased cost of goods to its customers, and the balance would impact is profit margins.

To answer the question about whether US consumers are more likely to pay higher prices for ‘made in America’ – my opinion (not backed by any data) is ‘no – or at least not willing to pay a price that will be required to support American-made across most products’. If US consumers were willing to pay a premium for US-made products, then there would not be any outsourcing in the first place. In my opinion, for US manufacturing to be competitive, it will have to rely on reducing production costs, not on hoping that US consumers will pay more just because a product is made in the USA.

Really good post, Panda! I think the topic of Chinese ecommerce is fascinating and this post was a really great summary of the industry and one of its key players. I really liked your explanation of how JD.com is going to implement anticipatory ordering in its supply chain and found it really useful in conceptualizing how JD.com will grow/ maintain its future competitiveness. I think it is especially interesting that JD.com is selling this automatic refill process/ data-mining capabilities to established CPG companies. I know that Alibaba has recently rebranded itself as a ‘data company’, and I am very interested to see that JD.com is investing in similar capabilities and in your idea of selling its big data capabilities to other companies.

To address your question about JD.com holding monopolistic power over consumer data/ retail – I understand your concern. But, from a data perspective, I personally believe that Alibaba is much more likely to achieve more control over consumer data. Alibaba’s data capabilities is much more developed, as the company services a much wider number of consumers with a much larger number of merchandise value, has access to a large amount of financial data (via its relationship with Alipay and Ant Financial, one the biggest finch companies in the world), as well as data on how consumers consume media (via its media investments) and on distribution/ logistics (via Cainiao platform). From a retail perspective, I believe Alibaba’s platform as well as a wide variety of other physical retailers offers competition to JD.com.

Really interesting post, Dennis! I think it gave a fantastic insight into Amazon’s anticipatory shipping (breaking down a really complex system into easy-to-understand steps), and was very clear in the implications it would have on Lazada. I particularly liked your view of Lazada’s competitive response (i.e., offering express but not anticipatory shipping in the short-term) and what it should do in the longer term (hiring data scientists to replicate Amazon’s model).

To answer your question about whether Lazada can triumph – I think that there are multiple types of retailer, across both online and offline. I think your post presupposes that Lazada should copy Amazon/ be the Amazon of Southeast Asia. While Amazon is fantastic in Europe/ USA/ a few other countries at offering a wide range of products at great prices quickly delivered to your door, not every retailer has to be exactly like Amazon to do really well (i.e., there will be more than one online retailer in any market). For instance, Jet.com offers lower prices on selected items/ lower cost shipping; Warby Parker offers brand/ innovative trialling/ returns policy. Both are doing fantastically. There is also a lot about the local market context that may make anticipatory shipping or even US-style ecommerce very challenging; while Singapore is well-adapted to Amazon, Indonesia or the Philippines have much less developed infrastructure to support 2-hour shipping across large parts of the country. Alibaba is a case in point of how Amazon is not destined to takeover all markets, and the fact that Alibaba has invested so heavily in Lazada I believe points to its long-term likelihood of success vs. Amazon.

I think this is a great post, Adam. It is definitely a very big topic (in terms of importance and sheer size of research/ literature behind it), and I think you have summarized many parts of it very well.

One area that was missed in this post is the non-environmental factors that cause famine. There is a large body of research that shows that famines are often not caused (or only caused) by food under-production or environmental disasters. Often, even during these famines, enough food is produced (even within the locale of the famine); however, the food is not equitably distributed to those in need [1]. This speaks to one of your open questions – I do not think we necessarily need technology to improve yields. We need technology/ intervention to ensure equitable supply from those with more food than they need to those who need food.

To answer the other one of your open questions – I don’t think it is possible for the FAO (or any organization) to be truly apolitical. Even the statement “this is not political” is in itself a political statement (many UN organizations may argue that they are purely driven by objective science and are ‘technocratic’ – again, this is a political statement). In my view, the role of the UN is to ensure the future survival of the world. To do so, the FAO and other UN bodies need to take a strong stance against global warming. I think the world as a whole believes in the importance of combatting global warming; the key challenge is in ensuring each government agrees to stringent regulations.

[1] https://nkfood.wordpress.com/2012/08/31/summary-of-food-economics-and-entitlements-by-amartya-sen/