Daniel Benzecry's Profile

Surely, free market agreements are beneficial to all the parties involved. Optimization of resources and labor are critical for an efficient supply chain, and NAFTA surely offers that. However, as these changes with the new administration happen, there are two important thoughts that can put some optimism in this entire situation.
1) In the short term this will most likely hit the cost structure of the automotive industry, thus transferring a representative portion of it to final customers. However, it is important to notice the current trend in minimum wage in Mexico. Since the implementation of NAFTA, minimum wage has gone up by more than 400% (https://tradingeconomics.com/mexico/minimum-wages). Unfortunately to Ford, this trend is continuously going up. Given this move, it is reasonable to think that the competitive advantage in Mexico is likely to fade in a few years. Therefore, in the medium-term this political change in the US will probably not affect the industry that much, since wage costs are likely to converge.
2) There are strategies Ford can implement to avoid disrupting its supply chain. The reality is that the current pressure the automotive industry is suffering from Washington seems to be more of a populist political one. In other words, Ford must give something for the White House to be proud of. With current trends regarding self-driving cars, there is an opportunity for that. Ford could, for instance, invest more heavily in this industry in the United States. This way, the current administration could claim a victory and let the automotive industry continue its operations in Mexico.

The negative potential impacts of Brexit have been well exposed both in the media and in your incredibly well written article. However, there is a very simple benefit that will be crucial to the success of the UK moving forward. By leaving the European Union, the United Kingdom will also be free from the strong and destructive nature of the rest of the continent’s regulations. As a matter of fact, food importing is one of the areas that are most affected by these rules. So why is this relevant to Tesco? Because it can use this opportunity to improve and internationalize its supply chain! I would like to use a personal example that happened with the business where I worked. As one of the largest Brazil nuts exporters in the world, we had the United Kingdom as a top 3 market. However, after the creation of European Union regulations, it became very hard to continue trading with the UK. The result? Supply of Brazil nuts to London decreased, and prices skyrocket. I wonder how many other barriers aren’t in place and how many other supply chain opportunities won’t come after Brexit.

This is a clear example of how technologies are disrupting businesses in the developing world, where micro entrepreneurship will be vital to the well-being of the population. In this case, GO-FOOD diminishes the capex investment necessary to install a supply chain in the food retail industry in Indonesia. With less initial capital, supply chain gets leaner, thus facilitating entrepreneurship.

However, it is important to put every endeavor in context, especially in the developing world. In Indonesia, in order to impact the entire country, it is necessary to understand the complex geography of the region. If this technology is aiming to disrupt and touch many other businesses and lives, it will have to develop a way to facilitate the supply chain among the many Indonesian islands. This would be very important to the equal development of such an unequal country. I am curious to see what the future holds for this adventure.

What is particularly interesting about GE is that it is positioned in many different supply chain layers depending on the point of view. Of course, it is a final consumer when demanding parts from its suppliers, whereas it can also be someone in the middle when looking from the final consumer’s perspective.

The fact that GE is in this position makes the potential impact even greater. In the case of the OFSE industry, GE is positioned in the hot spot. I don’t see, however, how the company would have to give up on control. With Internet of Things, it can be expected that sensors would transfer usage data automatically to GE. As a matter of fact, it would work the other way around: clients would give up information in exchange for efficient maintenance services.

I believe that this story is a clear example of how social problems can be solved by private entities. Like it was mentioned in the text, the fact that the current administration pulled back incentives towards clean energy hasn’t affected private investments. However, I am a little insecure about the long-term sustainability of this project for Amazon. The reality is that AWS is Amazon’s core business (going against the idea that it is primarily an online retailer!). Exposing this to potential cost disruptions in terms of energy expenses can be very dangerous for the business. For the meantime, I believe this will be played more like a PR move.

I found your essay extremely interesting and the questions you raised very pertinent. Regarding the first one, I believe insurance companies are in big danger. The two key elements to this industry are forecasting (based, as you said, on data), and cash to support your potential payments. Unfortunately, GAFA dominates in both aspects (look at Apple’s 300 billion in cash: https://blogs.wsj.com/moneybeat/2017/11/20/apples-cash-pile-is-approaching-300-billion/) and it is just a matter of time until they diversify and enter this business. As a defense strategy, AXA can try to diversify into other services in order to great a platform to clients. In addition, it could lobby for legislation that would prevent new entrants. Abut the second questions, the solution seems quite simple. With higher risks of environmental damages due to global warming, prices of insurances will simply go up. The risk here, however, once again goes back to the entrance of new competitors, which would pressure prices down from a supply point of view.