• Alumni

Activity Feed

On November 29, 2017, Elliott commented on Finding data in the grocery aisle :

Great article Joe! I think Alex Robinson raises a good point about the end use of the data collected. Going up against Amazon is no easy task, as they know how to leverage data better than almost anyone. To that point, I think it is important to note that Kroger’s 84.51 subsidiary purchased a predictive analytics firm with extensive retail and grocery experience last year. [1] Adding this core competency will better prepare Kroger as they move further into e-commerce. They will be better prepared to match inventories with demand as consumer purchasing patterns online differ from traditional brick-and-mortar trends.

Even if Kroger does aggressively pursue an e-commerce strategy, I agree with your proposal that they should develop partnerships to solve the last-mile delivery problem. Leveraging ride-sharing platforms to make grocery deliveries would create value for all stakeholders: convenience for customers, income for delivery drivers, and more structure around online order pick-up times for grocery stores. Currently, the logistics of scaling online pick-up or delivery of groceries from a traditional retail location is a daunting task. Kroger will have to solve this problem if they intend to go down the e-commerce path, and last-mile delivery solutions could be beneficial in this regard.

[1] Diana Sheehan, “Bridging logistics and loyalty.” Kantar. August 8, 2016. https://us.kantar.com/business/retail/2016/kroger-and-analytics/. Accessed November 2017.

Great article Danny! I agree with you that labor shortages will be a key issue for Foxconn to overcome with this expansion in the US. The company will need to commit a significant amount of funding to train workers. Given the existing low unemployment level (3.1%) and the history of skilled labor shortfalls in Wisconsin, I expect Foxconn will have to look towards nontraditional channels for their recruiting. [1] In response to your comment about Wisconsin spending $250,000 to $1 million per $54,000 per year manufacturing job created, I think it is important to consider the other economic impacts associated with these tax-payer funded incentives. The facility Foxconn is building will most likely require suppliers to co-locate in Wisconsin, bringing additional jobs to the area. Restaurant, retail, and housing expansions will also bolster the economic returns of this investment. In addition, the value of an anchor employer to help with talent recruitment and retention concerns for other businesses looking to expand into Wisconsin can be significant. That being said, even if the taxpayer investment proved to be a financial boom for the state, there are those that would argue against this project. The Koch-brother backed conservative group Americans for Prosperity opposed the deal on the principle that free markets are efficient and that giving expensive “taxpayer handouts” which are not available to other local businesses would be unfair. [2] The “right balance” is sure upset people on both sides of the aisle. However, it must create value for the ultimate stakeholders: local taxpayers.

[1] CBS/AP, “Wisconsin moves one step closer to Foxconn plant,” CBS News. August 17, 2017. https://www.cbsnews.com/news/wisconsin-moves-one-step-closer-to-foxconn-plant/. Accessed November 2017.

[2] Eric Bott, “Americans for Prosperity – Wisconsin Statement on Foxconn,” Americans For Prosperity. August 3, 2017. https://americansforprosperity.org/americans-prosperity-wisconsin-statement-foxconn/. Accessed November 2017.

On November 29, 2017, Elliott commented on Land Ho! Howard Hughes Should Keep Watch for Drier Real Estate :

Fascinating article! While some aspects of an international growth strategy are certainly compelling, I would be worried about the ability of management to understand local customs and consumer behaviors well enough to win against entrenched competitors, such as Shui On Land in China. Coupled with the regulatory and legal restrictions of foreign owned/operated entities in many emerging markets, I do not think an international focus would be wise to pursue.

Given how little penetration HHC has thus far in the US market, there are plenty of domestic opportunities for the company to diversify their portfolio away from locations of high risk due to rising sea levels. Cities such as Denver, Phoenix, and Nashville are more insulated against adverse effects of climate change than coastal properties in Miami or Hawaii. I do agree with you assertion that HHC should evaluate reducing the holding period for high risk assets. However, as Matt points out above, anything deemed by customers or investors to be a fire sale today could have negative implications for future projects. In addition, with the existing high demand and thus price premium for water-front properties, I think it would be unwise for HHC to entirely abandon developing coastal properties altogether.

Fascinating article Anum! It should come as no surprise that GE is on the forefront of innovation in the oil and gas industry. Given the pressure that many public traded oil and gas companies face to hit production targets, any opportunity to reduce downtime is a chance for both operators and service providers to capture value. To address your second question, I would argue that low oil price environments are typically when companies have invested in changing their existing supply chain models. The de-bundling of hydraulic fracture services and the emergence of the self-sourced supply chain model for proppant and chemical additives over that last four years is a perfect example of this. In response to low commodity prices, operators have aggressively pursued ways to maintain margins. Now it is time for service companies to find ways to bolster their bottom line. I think GE will face significant hurdles convincing an operator to utilize 3D printed components below the surface. However, their recent combination with Baker Hughes creates an interesting dynamic, particularly given the large share of key markets they now control such as electric submersible pumps. As 3D printing technology continues to improve and reduce in price, I expect commercial applications in the oil and gas industry will grow.

On November 28, 2017, Elliott commented on Constellation Brands: does Corona have to be Made in Mexico? :

I really enjoyed your article Alex Robinson! I agree that uncertainties around trade relations create incentives to invest in production and supply chain infrastructure for CB’s portfolio of Mexican beer in the US. However, I have to side with JJFG that current economics will most likely deter management from making the capital-intensive investments necessary for mass production north of the Rio Grande.

There is a long history of imported beer brands successfully shifting production for US consumption to US-based facilities: Red Stripe, Beck’s, Foster’s, Kirin, and others. [1] However, these beers are all imports from locations with high production and transportation costs, such as Jamaica, Australia, Germany, and Japan. While most of these brands have not been been crippled by transferring production locations, it is important to note that CB will have to be careful about messaging on their packaging. A precedent was established when AB-Inbev settled a class action lawsuit related to misleading consumers around whether or not they were purchasing imported beer. [1]

[1] Brad Tuttle, “5 ‘Imported’ Beers That Are Really Brewed in the U.S.A.” January 9, 2015. http://time.com/money/3660627/fake-import-beer-kirin/. Accessed November 2017.

On November 28, 2017, Elliott commented on Adding Heat to Global Warming with Tabasco :

I agree with Austin and Eric’s comments above that Tabasco should start diversifying their production sites, as well as adding additional growing locations, as a way to ensure the company can viably continue to deliver hot pepper sauce for another 150 years. This is surely a more practical adaptation to climate change than making significant capital investments to maintain their current operating practices. The brand value from the heritage of Avery Island cannot be that significant, given that most people are unaware that it is the only production facility and primary growing location.

In addition to working with genomes to improve drought resistance and plant adaptability, improving soil management practices can be an easy win as a buffer against changing weather patterns. As storm events increase in frequency and intensity, heavy rains can accelerate soil erosion and cause flooding that is harmful to pepper production. The Food and Agriculture Organization of the United Nations recommends a variety of practices to increase organic matter in soils that can absorb high amounts of water, reducing surface run off and increasing water absorption capacity for times of extended drought. [1] I would be curious to know if Tabasco is currently going after this seemingly low-hanging fruit to adapt to climate change.

[1] Food and Agriculture Organization of the United Nations. “Adaptation to climate change in agriculture, forestry and fisheries: Perspective, framework and priorities.” Rome 2007. http://www.fao.org/nr/climpag/pub/adaptation_to_climate_change_2007.pdf. Accessed November 2017.