HJ Kim

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On November 27, 2017, HJ Kim commented on Outsourcery: Will Infosys lose its magic? :

It’s certainly not an easy business to play in today. On one hand, you have the pressing need to constantly innovate and provide low-cost but effective products to your customers. On the other hand, you have to balance fluctuating labor costs and regulatory pressure from governments all across the globe.

I don’t know enough to get into the moral dilemma of paying someone in India significantly less than in the US, but from a consumer’s perspective, if I can get the same service for a much lower price, I’d take it every single time, especially if I’m a business that relies heavily on IT (which is pretty much every business now). We call ourselves a global economy, but the recent push towards protectionism, especially in the current administration, goes against so much of how businesses have been built in the US for the past few decades. I’d echo Alona’s comment that Infosys should enter into emerging markets; however, this feels too little, too late – what stops those emerging nations from doing it themselves for even lower prices?

A couple of thoughts I had after reading:

1) What would be the impact on general quality by shifting production from Korea over to the US? I think we’ve seen cases throughout the semester of companies going both ways. Will Hyundai be able to maintain its customer promise with such a drastic shift in its manufacturing origin? I’d also assume a shift to production in the US comes with significantly higher costs, specifically in labor. While I certainly think a more globalized supply chain is necessary for any business to continue growing, I question whether the timing is now, given the uncertainty in both the US and in Korea.

2) I also wonder how such changes would be received by the South Korean government and public. Koreans are proud folks, and I think it’s safe to say that a major shift in production to China would be met by significant media resistance, especially given recent tensions between the two countries.

On November 27, 2017, HJ Kim commented on Delhi, my grandmother cannot breathe! :

This was certainly not a topic I knew much about, so thank you for the interesting prompt. I thought your first recommendation on temporarily banning private cars was very interesting. It definitely sounds like a solution with far-reaching benefits beyond the current issue with pollution. A concern, however, would be on the business side – how would the auto industry react and deal with such a drastic change? In the Reuters article below, it’s mentioned that Tata Motors’ market value fell nearly 5% after the initial trial was announced. Couple that with the fact that Delhi alone makes 7% of total Indian auto sales, and you have a fairly significant investment issue. Auto companies require a ton of upfront capital and certainly cannot react quickly to regulatory change – business plans and investment decisions are usually made years in advance. What would be the magnitude of such a ban on Delhi’s labor market? How would automakers and lobbyists react, and is the government prepared to face that challenge?


On November 27, 2017, HJ Kim commented on El Niño Food Crisis in Southern Africa :

Super interesting read, and I found your short-term recommendation to be insightful. I wonder how much of a country or community’s culture plays into such issues. How easily can we plant new crops (that are more sustainable) and convince people to consume them? It obviously makes a ton of logical sense – having some food is better than having no food at all. However, in communities where resources are already limited and communication is challenged, such large-scale changes feel difficult. Also, foreign aid is helpful, but the correct allocation of such aid is vital. Should aid be used to build up infrastructure rather than to solve short-term issues?

On November 27, 2017, HJ Kim commented on For AT&T, It’s (DirecTV) Now Or Never :

This is a super interesting issue. At the core, AT&T and Time Warner don’t compete, since AT&T is a communications company whereas TW is a content business. Such a suit as the one proposed by the DOJ is pretty uncommon for this kind of merger. I think a lot of the pushback, however, is directly tied to what you refer to frequently throughout the prompt: DirecTV. If AT&T and TW were to merge, that gives the company tremendous leverage in programming – both in content and distribution. Having said that, I wonder if this deal is even worth it for AT&T. The markets didn’t react all that well to the announcement as investors thought the price was too high. Couple that with a legal battle with the DOJ, and you’ve got a very expensive (and arguably overvalued) transaction as well as an extremely levered company (~$180bn of debt). Why not, as you suggest, use the capital elsewhere in its digital video business to better compete with direct-to-consumer players?

On November 27, 2017, HJ Kim commented on Can Colombia’s one-stop App become profitable? :

This was interesting – thanks for the unique topic. Though the idea of “instant” or “fast” delivery is still fairly new even in the US, it actually hasn’t been all that ingenious in other parts of the world for quite some time now. For instance, in South Korea, it is very common for product deliveries to happen on the same-day; I certainly don’t think the public would be open to a standard 5-business-day delivery, like the ones we’ve had in US retail. It’s obviously much easier to provide such fast delivery in Korea than in the US because the country is so much smaller; it’d be the equivalent of deliveries occurring only in New Jersey. Having said that, I find myself wondering how Colombia’s infrastructure will allow for the expansion of a business like Rappi. How expensive would it be for Rappi to expand? Would they have to target very urban markets first?

Also, there were several references to Instacart, which I found interesting. Instacart has always been highly valued, and I think a lot of that has to do with investors feeling like they missed out on businesses like Uber and betting on the momentum on-demand business brings. That has a lot of risks – Instacart, as far as I know, isn’t profitable, and at a certain point, investors aren’t going to love shedding cash with the hopes of one day expanding. I’d be curious to see how expansion unfolds for Rappi.