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On December 1, 2017, John commented on Associated British Foods: Mmmmm…Brexit :

While the consequences of Brexit remain unknown (and at the moment, troublesome for many companies with UK exposure), Brexit might actually be a useful catalyst for ABF to pursue the value-maximizing strategies you outlined (reducing operating costs, going deeper into retail, DTC, integration with suppliers), which seem to be reasonable in any economic environment. Regardless of the political outcome, these seem like sensible decisions to make.

Your questions are very thought provoking. Regarding your question on lobbying, as significant tax payers, I think businesses should have a stake in the allocation of government resources. The magnitude of their voice, however, should be restricted (in terms of a cap on dollars donated and/or access to politicians) as a way to preserve the voice of private individuals, who cannot wield the same resources to advocate their agendas.

As ABF considers reorganizing its supply chain, I think ABF is being put in a really tough situation by the UK government with respect to its current employees. It´s unfortunate that shareholder friendly actions may require moving jobs away from the UK. Ultimately, I think the government should be held responsible for the consequences of such a move, and hopefully such behaviors will be an awakening to those who voted against inclusiveness and the free flow of capital, people, and ideas in Europe.

On December 1, 2017, John commented on Ice, Cold Corona – Get it here for a 35% higher price! :

Very insightful piece, Cindy. This is a particularly interesting industry to analyze because it has become so consolidated (ABI acquiring Modelo, SAB, etc), so as we think about JVs, acquisitions, etc., the universe of potential partners is not very large. This is because there are few remaining players of scale, but more importantly, because antitrust laws restrict ABI from interacting with many of the remaining players. In fact, the ceding of control of the Corona unit to Constellation was imposed on ABI by regulators in evaluating the competitiveness of the Modelo acquisition.

I’m hopeful that in the weeks leading up to the NAFTA renegotiation, independent analyses come out that highlight the pricing consequences of U.S. tariff imposition on importers, across industries. If the general public were to learn that the price of a bottle of Corona will go up 40%, perhaps some of Trump´s base might actually appreciate what this strategy of isolationism means for U.S. consumers.

The impact of climate change seems to be the existential question concerning the long-term sustainability of this business and industry. A broader question I have for TSF and competitors is: is it even worthwhile to incur higher capital expenditures and expenses in the near-term to combat this change (through experimentation with new types of oysters, new equipment, etc.), or is it wiser to invest more heavily in geographies that are expected to be more resilient to climate change over the long-term? I think it’s unreasonable to expect the U.S. and other governments to coordinate in a way that will quickly reverse the impact of climate change on water acidity in the next 20 years.

Consequently, TSF is putting a lot of pressure on technologists and marine biologists to develop mitigants / adaptations to survive, in a short period of time.

It seems wise for TSF to acquire assets in Hawaii. Why not take the “big bath” now and relocate more of the business to geographies like Hawaii. It will be disruptive in the near-term but will probably maximize shareholder value over the long-term.

Thanks for sharing this post. I had never heard of a B Corp before, but after researching this, I hope companies like Fetzer create more momentum (and pressure on other companies) to receive this designation.

After reading our cases on Indigo in TOM and Apeel in Marketing, I’m intrigued by the potential for agricultural technology companies to meaningfully improve crop yields and resiliency to climate change. Do you have any idea how advanced seed treatments / coatings are in this industry, and if they are commercially viable, how expensive treatments to improve grape yields might be? It would seem to me that the only real way for this industry to survive long-term (in existing geographies) is to embrace new technology like this.

On November 28, 2017, John commented on Scan that drug! :

This is a fascinating company, and I did not realize that there were real regulatory tailwinds behind the adoption of digital tracking in the pharma supply chain. While managing the opioid crisis is an immediate and useful application of this technology, I would think that the ability to track & monitor drugs could also have enormous consequences on patients´ medication adherence (post-Rx) more generally, which would also have a positive societal impact, though would bring a host of patient privacy concerns.

Do you worry that the current administration will take measures to reverse the legislative momentum that supports this digitization? The level of accountability brought about by this new supply chain requirement seems high and potentially onerous to pharma companies (and other value chain participants). Said otherwise, this doesn’t seem “incumbent friendly” (big pharma). I’m curious to hear your thoughts on where various stakeholders stand on this emerging technology (AMA, PhRMA, etc.).

Very thoughtful article, Chris, and I assume somewhat scary for educational administrators at traditional universities to read. I wouldn’t be surprised if you see schools responding to programs like Udacity’s with more bespoke degree offerings (e.g., similar to MIT’s 10 month masters program in supply chain management). I worry about the steps these universities will take to undermine the credibility of new programs such as Udacity’s, and poach potential candidates.

I’m curious to see how i) job placement rates among Udacity graduates actually fare and ii) employers evaluate the competence of those graduates. Given the tightness of these markets, I would expect the placement is quite strong today. If I was Udacity I´d continually focus on those specialties for which the labor market is tightest and try to remain ahead of the universities in terms of their ability to go-to-market with degree program(s).

Over time, I also wouldn’t be surprised to see companies like the FANGs starting internal universities like this to better control the market for advanced talent. Perhaps Udacity could migrate to an employer-based training offering over time if they are looking to get more leverage out of their existing intellectual capital.