John Power's Profile
Really nice piece about agribusiness and digitalization! After reading it, the first thing that came to my mind is that Olam really needs to find how to leverage its current first mover advantage before digitalization becomes largely available not only to them but to its competitors, producers and customers. Olam’s success has relied on being the first to increase information access and foster information sharing across the different actors in the agribusiness supply chain. Now, Olam’s future challenge is to differentiate itself from the new competitors that will surely challenge its dominance in the industry. To address that, I would suggest that Olam 1) continues investing in digitalization via new technologies such as Internet of Things and drone imagery and 2) increases its customer base to benefit from the network effect, as more customers would increase its OFIS database value. To finance those investments and customer growth, Olam could look for outside “ethical” investment by leveraging its contributions to Africa’s communities and sustainable agricultural product growth.
Really nice and well-supported piece. It is interesting to see how US protectionism does not only impact international companies but also US brands with global exposure. The current protectionism also puts Nike and other US companies in a complicated dilemma: should they define their long term strategy based on the current (and limited to 4-8 years) political environment?
To address your questions, I can see Protectionism as a double edged sword for US jobs. In the short term, it may lead to reshoring and increasing local jobs. However, it will certainly accelerate automation which at some point will offset the previous job creation. That said, I also believe that Nike may have already started investing in automation, which can be supported with the information showed in Exhibit A of your article. Regardless of US protectionism, Nike knows that it will eventually face higher labor costs in the developing world and then automation will also play a key role there.
That’s a very interesting article! Coming from the aviation industry, I can confirm that high temperatures are a key issue when analyzing potential new routes. Las Vegas, for example, is a really attractive summer destination for international airlines, but they have been struggling to operate profitably due to weight limitations caused by high temperatures. Some airlines, like Norwegian , were even forced to cancel their existing Las Vegas route for this same reason.
To address your question, airlines are already committed to address climate change. The aviation industry has already set a carbon-neutral growth target by 2020, with the goal of keeping carbon emissions constant regardless of the industry’s growth. They pretend to achieve that through the use of improved fuel efficiency, lighter materials, biofuels, and carbon offsets. Despite some technological breakthroughs such as 3D Printing which will play a critical role in reducing weight and emissions, it is yet to be seen if airlines will be able to meet their target.
Exciting post, thank you for the insights! Bombardier is facing the same challenge as Airbus did some years ago before deciding to open its first US plant in Mobile, Alabama, in 2015. One of the key reasons behind Airbus’ decision was to minimize political risks in future deals, as Alan McCartor -Chairman of Airbus Americas- said: “It’s been night and day how we’re received on Capitol Hill”  pointing out that Airbus had gained some allies in Congress. That shows how hard has traditionally been for international aerospace manufacturers to deal with the US political protectionism, regardless of the party in power. However, what it is more alarming for international manufacturers and really emphasizes the current US protectionism is the fact that Bombardier, as opposed to Airbus, does not offer the same products as Boeing does. Bombardier C-series aircraft’s capacity ranges between 100-120 while Boeing’s smaller airplane has 130-160 seats, targeting different segments of the market. Given the more hostile environment for Bombardier, one can understand its decision to partner with Airbus. To address your second question, I do believe that Bombardier is still assessing the possibility to open a US plant in the long run, but they will never do that before testing the industry and having a relevant market share and solid customer relationships with US airlines.
Tesla is a really helpful example to deep dive into climate change and highlight the side effects that even environmentally-focus companies can have on the environment. Even though no one can argue against Tesla’s mission and positive alignment with reducing climate change, there is room for debating how far should Tesla go to push for further measures to minimize the impact that lithium batteries’ supply chain has on the environment. As the article points out, most of the world’s lithium reserves are located in South America, in the so-called “lithium triangle” made of Argentina, Bolivia and Chile. Chile, as the largest lithium producer among them, has seen a dramatic increase in lithium extraction due to booming demand from Tesla and other electrical car manufacturers. At the same time, the environmental impact that these activities are having on Chile’s hydric sources -such as contamination and droughts- has started to attract public attention. Proposals urging the Government to set stricter legislations to control lithium extraction have already reached the Congress. However, such proposals tend to be scarce and take years to materialize in any developing country, and Chile is not an exception. That said, I do personally believe that Tesla should leverage his purchase power and impose higher standards for its suppliers in developing countries to ensure both the long-term sustainability of lithium supply and to minimize the impact on local communities and environment. By doing that, Tesla would become a role model for the rest of car manufacturers and would fully embrace its mission of accelerating the advent of sustainable transport.