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On December 1, 2017, Raffaele commented on The Climate Change Concern for PepsiCo :

Nick – great write up. Given that Scope 3 emissions represent the bulk of PepsiCo’s carbon footprint and the success of the firm’s plans to reduce emissions of this type depends on external stakeholders, what are some of the things that PepsiCo is doing to ensure the buy-in of external stakeholders?

I think that the savings on water usage are phenomenal. From a societal standpoint, it would be great if PepsiCo shared the strategy that it took to achieve this. However, given the high degree of competition in the industry, I don’t think PepsiCo’s leadership team would agree to do this.

Great article. It is striking to me that wine production is expected to drop 8% in 2017 as a result of climate change. I firmly believe that climate change is one of the most pressing issues of our time, and I applaud E & J Gallo’s efforts to promote more sustainable growing strategies in California. I am curious to know what these strategies entail.

Given the challenges that climate change presents, it seems to me that grape growing and wine making will become more of a science and less of an art in the future. With the rise of genetic engineering, do you believe traditional wine makers will be open to the idea of using GMOs as a means to cope with the threat that climate change poses?

Vijay – I enjoyed reading this article. I see Amazon as an existential threat to the current business model of CVS and other established players in the retail pharmacy industry. It seems to me that key hurdle that Amazon has to overcome is gaining traction with pharmaceutical companies and insurance providers, and if Amazon is able to do this, I can see it dominating this industry. One piece that stood out for me was the general trend towards vertical integration. If the CVS-Aetna deal goes through, I would be curios to know how this massive organization would look like from an operational standpoint.

Stefan – thanks for sharing this piece. It is great to see industry incumbents, such as Rolls-Royce, fully embracing technology to maintain their competitive advantage. I think that it is fascinating that Rolls-Royce is looking at cutting edge technology such as augmented reality, as this type of technology has the potential to streamline and improve Rolls-Royce’s servicing operations. What timeline does Rolls-Royce have in mind to start rolling out this program? I believe that a key stakeholder that Rolls-Royce’s management team needs to consider are the technicians in the field. I am quite curious to know what steps Rolls-Royce takes to secure the buy-in of experienced technicians who may be skeptical of this type of technology.

Troy – great post. Given that Mexico is one of the largest trading partners of the U.S., abandoning NAFTA altogether would cause a tectonic shift in the supply chain of many industries, especially those that significantly benefit from labor arbitrage. I believe that abandoning NAFTA would put additional pressure on industries, such as the U.S. automotive industry, that already face heavy competition and margin compression. Given the current administration’s unpredictability, it is hard to justify making material shifts, which may have material impact on the bottom line, to the business model. Nevertheless, I think that GM’s leadership must be alert and have a plan in place ready to execute in the event the Trump administration decides to pull out of NAFTA. I believe that Barra’s decision to join the business advisory forum of President Trump of was a very smart and proactive step to not only influence policy makers but also take the temperature of the White House as a means to inform GM’s strategy as fast as possible.

Maud – I enjoyed reading your post. Echoing Madeline’s comment, I found the Brexit scenarios quite enlightening. Considering the three possible scenarios, I believe that, unfortunately, the “Hard Brexit” scenario is the most likely, given the hard blow that U.K. prime minister, Theresa May, and the conservative party suffered last June, after losing a special election that May herself called. May’s goal by having this election was to gain more seats for her party in the British Parliament, with the aim to have a stronger hand in Brexit negotiations with the EU. May’s miscalculations may prove costly for the U.K. and firms, such as Airbus, that have multinational supply chains. Upon triggering article 50, the U.K. will have to renegotiate all the previous trade agreements with the EU within two years, and, if new agreements are not reached, the old agreements will default to the hardest possible scenarios. Additionally, regardless how valuable of a trading partner the EU may think the U.K. is, the EU is specially incentivized to make the negotiations as difficult as possible to dissuade any other countries from leaving the EU. In the event of a “Hard Brexit”, it will be interesting to see the path that Airbus takes. Do they relocate their operations in other EU countries? Or, do they pass the additional costs down the value chain?