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On December 1, 2017, GR commented on Foxconn in the Age of Isolationism :

Interesting article – I think one thing that’s often missed discussion isolationist policies is the range of benefits from foreign production beyond just cost. For example, Apple executives (see article linked below) claim that “overseas production facilities offer scale, flexibility, diligence and skilled workers that U.S. factories are no longer able to match”. In other words, when companies are forced or encouraged to produce locally, they give up not just lower costs, but also expertise and flexibility, so the costs to local production are higher than most think.

Great article. I agree with you that countries are unlikely to reduce local content requirements. In fact, I expect the opposite. For example, countries like Saudi Arabia (see link below) are working on increasing not just the percentage of Saudi nationals employed in foreign companies, but also the percentage of specific Saudi groups like women. Part of the reason for this is optics. Local residents aren’t generally aware of studies demonstrating the ineffectiveness of local content policies, but they most definitely are aware of policies require local hiring. Because of this, policy makers have every incentive to maintain the policies.–saudi-arabia-delays-implementation-of-third-phase-of-nitaqat–saudization–program

Interesting article – I like your point about GAFA, but am not particularly worried about the threat those companies represent for insurers. I agree that their cash piles and data strengths are formidable, but insurance is so far outside of their core business that I don’t think they can be successful in the industry. Companies that extend outside their core generally don’t succeed. For example, the HBR article linked below notes that three-fourth of expansion efforts outside a core competency failed. Additionally, the GAFA companies enjoy considerable brand power, and entering the insurance business puts the brand at risk, since people consistently hate their insurance provider.

HBR Article:
Bain Article on insurance loyalty – see figure 3 on net promoter scores and how low they are:

On December 1, 2017, GR commented on Syngenta: feeding future generations? :

Interesting article, and I agree with your assessment that the company is shirking its commitments a bit by not setting goals and evaluating progress for supplier sustainability and distribution emissions. I wonder how much of this issue is a result of the difficulty of measuring sustainability metrics for these two factors, since these exist outside of the company. For example, the link below is a research paper on sustainability in supply chains, and notes that a “large proportion of firms studied did not (or could not) accurately measure the mass of materials flowing through their production processes.”. Nevertheless, this only reinforces your point – if the company were more committed to those two metrics they would invest the resources needed to evaluate itself by them.

On December 1, 2017, GR commented on Maple, a restaurant without walls :

As others have mentioned, I also like your suggestion to limit the menu. However, I’m not sure that would have been enough. I would advise them to pick a focus. It’s hard enough to succeed as either a stand-alone restaurant or a food delivery business, but this company was trying to do both, which is an extremely complex and challenging undertaking, so I’m not surprised the idea failed.

Going back to the idea of simplifying the menu – there’s a company called Peach that does just that – though their business model is a bit different (see link to website below) because they don’t handle the food preparation, they just source the food from different restaurants. Every day, Peach sends out a text message to subscribers, and asks them to pick one of three options for lunch, from a different restaurant every day. At lunch time, the company makes mass deliveries to everyone at the company that placed an order. They also set a minimum order threshold for delivery at a specific company. The limited menu and the minimum order sizes help them cut down on the high costs that were Maple’s downfall.

On December 1, 2017, GR commented on Amazon’s Response to the OTT Universe :

I agree with you that Amazon’s core competence is outside of video analytics, and that Netflix has a substantial lead in this space, but I’m not so sure it matters. For example, Amazon’s CFO said on a recent earnings call (link below) that the video unit drives higher engagement for the rest of the Prime business, including higher conversion of free trials, and higher Prime renewal rates. This gives Amazon a huge advantage in that its video business doesn’t have to make money so long as it’s making up the losses throughout the rest of the Prime ecosystem. This could theoretically allow Amazon to overbid on content without negative consequences, diminishing Netflix’s ability to secure the content for itself.