Juan Torres

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On December 1, 2017, Juan Torres commented on Holy Guacamole! Your Super-Bowl snack is about to get pricey. :

AF, this was a very insightful post! Thank you for sharing!

I agree with your assessment that tariffs in the US will lead Mexico to do business with new partners. Although they were expensive, avocados from Mexico were available at many supermarkets in Japan, and to agree with Iturbide, they were of better quality and taste than those imported from the Philippines, even though the transportation involved was much longer. I am not sure if the avocados were from Michoacan, but I can tell you that they were popular.

I am extremely curious to see not only the effects on American purchases of Mexican agricultural goods, but also to see whether Mexico could retaliate to the tariffs by placing similar restrictions on American agricultural goods. Mexico is one of the biggest purchasers of American corn [1]. Cooling relations with the neighbor to the North will increase the possibility of trade agreements with China as well – an undesirable outcome for the American economy.

[1] http://www.businessinsider.com/mexico-corn-buying-response-retaliation-trump-immigration-border-wall-2017-3
[2] http://money.cnn.com/2017/07/05/news/economy/mexico-china-trade-deal/index.html

On December 1, 2017, Juan Torres commented on Magazine Luiza 4.0: the Brazilian Amazon? :

FC, thanks for a very insightful look at a fascinating emerging market.

In my opinion, Magazine Luiza should take the actions that you recommended, but they also need to leverage their best competitive advantage – their retail locations. Wal-Mart’s recent successes in their fight with Amazon in the American market have provided a blueprint for how an omnichannel retailer can successfully alter its business model to incorporate digital capabilities. In addition, Magazine Luiza has another enormous advantage, their knowledge of the local market and its associated demand.

In addition to the players that you highlighted, I wonder how both Amazon and Magazine Luiza perceive local e-commerce platforms. One that jumps to my mind is B2W digital. B2W Digital is currently engaged in research collaborations with American institutions (such as MIT) and other e-commerce platforms around the world in building high-resolution models for solving urban last-mile delivery operations [1] and forecasting, learning, and price optimization [2]. In Southeast Asia, Zalora has been able to withstand Amazon’s assault by leveraging their local advantages.

[1] https://sloanreview.mit.edu/article/remapping-the-last-mile-of-the-urban-supply-chain/
[2] https://sloanreview.mit.edu/article/the-new-frontier-of-price-optimization/

On December 1, 2017, Juan Torres commented on Danone: Operating within the Tragedy of the Commons :

A fascinating post!

I agree that incumbent companies can derive value by lobbying for greater environmental sustainability standards, which raises the costs of production for everyone in the industry and raises barriers to entry. Maersk, the world’s leader in shipping, has adopted this as a competitive strategy in some markets. [1]

In addition, I support your initiative for Danone to actively cooperate with their smaller suppliers. A different post (Nikhil’s) discussed how Starbucks is experimenting and developing more heat and pest-resistant strains of coffee plants to face the changing current conditions. I do not see why Danone could not engage in a similar program. [2]

[1] http://www.presstelegram.com/2016/11/07/maersk-deal-to-reduce-emissions-a-quantum-leap-in-environmental-progress-port-officials-say/
[2] http://www.ticotimes.net/2017/01/26/starbucks-coffee-costa-rica

On December 1, 2017, Juan Torres commented on “Making every pill exactly right” :

Amy, thank you for the wonderful post!

As we discussed in the Embril case, another challenge for the pharmaceutical industry is the uncertainty in initial demand when bringing a drug to market, as forecasting in this early stage is very difficult. A faster process allows the companies to respond more rapidly to changes in demand while shielding them if the demand remains low. This digitization also helps companies cut costs because these processes involve smaller facilities, less energy, and less raw materials. [1] As costs become lower, the medicines can be commercialized more effectively in international markets. [2] This yields an optimum outcome: cheaper, more effective drugs for the people who need them.

[1] https://www.technologyreview.com/s/506511/breakthrough-offers-a-better-way-to-make-drugs/
[2] https://communities.acs.org/community/science/sustainability/green-chemistry-nexus-blog/blog/2017/06/22/continuous-flow-chemistry-s-role-in-providing-greater-access-to-medication-around-the-world

Nikhil, thank you for the great post! As an avid coffee drinker, it is interesting to see what challenges lie in the future for the coffee industry.

Another impact we are seeing from global warming comes in the quality of the coffee produced. When coffee is allowed to grow in colder temperatures, the beans ripen in a slower fashion – allowing complex flavors to develop. However, as the weather turns warmer, the beans ripen faster and yield a more plainly tasting coffee. Global warming also affects crops by creating droughts and extreme weather events. [1]

I completely agree that Starbucks needs to prepare for the future by experimenting with more heat and plague-resistant strains of the coffee plant and providing the results to their current growers, as well as by anticipating which new areas will become suitable for growing coffee in the future.

I also support the idea of installing energy-efficient refrigerators in the stores. I think that the Starbucks customer base, in general, would be receptive to the change if the chain explained the purpose behind it. The customer promise would not be altered by these changes.

[1] http://www.cnn.com/2017/06/21/world/coffee-climate-change-trnd/index.html

On December 1, 2017, Juan Torres commented on Blockchain for Shipping -Is it Really Revolutionary?- :

Toshi, this was a very interesting post!

In my opinion, the biggest barrier to implementation that I can see for a technology like this involves adoption by government agencies, especially in emerging markets. While the U.S. Customs and Border Protection agency is currently researching the use of blockchain technology in its future operations [1], and the potentials of blockchain as a leap-frogging technological agent for emerging markets has been explored by leading scholars [2], my own experience working with government agencies in countries in the Middle East and Southeast Asia has shown me that the institutional barriers to new technology adoption by government agencies are difficult to overcome.

From Maersk’s perspective, I can see why focusing on these new technologies makes sense. Similar to our IKEA discussion, Maersk was a leader in the environmental regulation reforms in the worldwide shipping industry over the last 20 years. In addition to the benefits to the environment, Maersk in effect raised the barrier to entry into the shipping business for potential competitors and the cost of operation for existing ones. I think that this technology will provide them with another competitive advantage.

[1] https://www.coindesk.com/us-customs-border-patrol-advisors-form-blockchain-research-effort/
[2] https://hbr.org/2017/05/how-blockchain-could-help-emerging-markets-leap-ahead