You know, it’s crazy that Jaguar is even still considered a British car company! Despite its UK HQ, Jaguar was acquired by Ford, an American company, before some of us were even born, in 1990, Tata, an Indian company, has owned Jaguar since 2008, and its controlling Board is Indian. If it’s still considered a British car company despite this, the notion that its building factories and R&D centers outside the UK will hurt the brand, you rightly suggest, is baloney.
Sometimes in the risk management process it’s best to accept the likelihood and impact of the risk and identify new opportunities to mitigate losses. I think this is one such case. I’d like to better understand where Jaguar’s growth and profit have been coming since 2008. Jaguar notably never turned a profit when owned by Ford. I suspect growth has been fueled by Asia’s rise. And while the West is increasingly ambivalent about vehicle ownership, the car continues to be an aspirational tool for many in Asia, especially in India. Long term automobile growth and profits will anyway be seen in Asia. I wonder if Jaguar should see this as a politically expedient opportunity to publicly shift operating focus to the East.
Curtis, this is SO interesting!
Rocket technology has to be one of the most expensive, slowest to develop, highest risk, and guarded technologies out there, and of course I can’t imagine there are many companies out there developing new engines! Given how state-run the space industry was and how mistrusting the United States is becoming of Russia, would you know if there are other aspects threatened by global isolationism? Given the high cost of products and few number of players, how has isolationism impacted pricing for these parts in the space industry? Would love to learn more.
You do a great job connecting the larger problems that climate change will bring to the coffee industry: incentivized, continued deforestation; the degradation of farmers’ livelihoods as coffee-arable locations shift. I find myself reflecting on whether the rush to continue coffee production will really result in deforestation. After all, the coffee bean / tree demands shade – in fact, rain forest filled with biodiversity. Nevertheless, you make the case strongly and convincingly that the risk of disrupted coffee production on account of climate change will have much greater ramifications than just on our palettes or wallets.
Reading the article, I remain unconvinced that coffee bean yield will halve. As climate changes, coffee bean production will shift to new lands – and slowly. This will be expensive for existing companies, as they will need to secure new assets. But the shift will replace, not reduce, the lands with new lands on which coffee is produced. Illy is mitigating immediate climate change risk admirably: working with suppliers and working to engineer new strains of coffee beans. For long-term, moonshot type stuff, I wonder what role they see for vertical farming or lab engineering to meet increasing demand of the coffee bean.
Fascinating take on an extremely relevant topic that I think all of us, myself included, need to educate ourselves on. Blockchain is a buzzword around here today, and businesses remain unclear on what role it will play in their strategies and operations. However, I have read that the transportation and logistics industry is one expected to benefit most from the technology.  I think you accurately point out the potential benefits: decentralized management of contracts (reduced costs for all players), accelerated and simplified contract exchanges (increased productivity for all players), reduced regulatory cost. I suspect blockchain transparency would benefit companies as well by helping resolve legal disputes. Anonymization and standardization, emblematic of blockchain technology, protect company trade secrets and create enforceable arbitration rules. While I agree that Maersk may not be approaching the technology in the most thoughtful way, I am impressed that in a slow-evolving industry they do recognize the potential benefits and have begun to experiment. I’ll be really curious to see how the blockchain develops over our time at HBS.
D makes a convincing argument that blockchain technology can address a real problem in the wine collecting industry. D also raises a good and fair question: will the new technology be adopted by a conservative industry?
The wine auction industry is, relatively speaking, small. We learned in Chateau Margaux that the wine industry is a $100 billion one. The wine auction industry, on the other hand, is a comparatively smaller one at just over $300 million a year.  Given its insular, small reach, adoption of blockchain technology has the potential to be rapid. However, given the lack of general penetration for blockchain technology today, I suspect that it will take some time. One reason may be the price fluctuations one can expect with the adoption of the technology. Today, vintage wines can expect to sell for more the more they age. Verified wines, D notes, will sell for more than unverified wines. Which is to say, blockchain technology may disrupt the pricing model for the entire industry. I suspect the wine collectors who own old vintages and acquire blockchain-verifiable new vintages will hold off until this potential volatility is better understood.
Mr Chen accurately points out the supply-side manufacturing hurdles Tesla must overcome to meet demand for its vehicles. Given supply constraints for cobalt, its inexperience with the politics involved in procuring commodities on so massive a scale, and price fluctuations for lithium, Tesla will struggle to meet demand for Model 3 vehicles. It is worth noting as well that Tesla has delivered at most 47,000 vehicles in any year (this year), and it would struggle to meet production demand (roughly 500,000 Model 3s) even without supply constraints.
I commend Mr Chen’s higher level argument that Tesla’s cobalt and lithium supplies are not only procurement problems but also a potential, brewing and stewing PR problem: petrol car engines take less CO2 to produce than do batteries and their motors , cobalt is procured in a contested area of the world and is destructive to procure, and the commitment to the Gigafactory may reduce impact but marries Tesla to li-ion technology that consumes cobalt. I have not read this insight, and it is interesting.
What Mr Chen seems to miss is the extent to which there are electric vehicle manufacturers already in play around the world. Some of these OEMs are far more successful than Tesla, or have been operating longer. Here are some: REVA (India), BYD (China), SAIC (China), BAIC (China, soon US), FAW Group (China), ProTerra (USA). Others that are coming: Lucid Motors, Faraday, etc. For these OEMs to succeed, and for new ones to enter, two critical things must happen: (1) battery prices must drop, and (2) efficient charging infrastructure must be set up.