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On December 1, 2017, Ragnar commented on Boeing Navigates Nationalist Winds :

It’s ironic that while the US government is tilting towards protectionism, its flagship companies have to pursue globalization to stay competitive. It may seem concerning that Boeing, a company intricately tied to US national security interest, is moving some of its intellectual properties and manufacturing capabilities to a foreign country, but it’s a case of plain economics triumphing over narrow-minded protectionism. Finding lower costs and easier access to markets leads to better business and greater shareholder values – Boeing is simply pursuing a compelling business rationale. So long as US national defense secrets and capabilities are not leaked to the Indian government, I don’t see why the starting manufacturing in India for a fairly old model of fighter planes should be a big concern for US national security. It may actually also be better for US national security because if Boeing, domiciled and accountable to the US government, doesn’t step up to fill in the Indian market demand, Airbus may, which would a loss for US economy and potentially for US national security. Alternatively, Boeing not being in India might also give an unchecked space for local manufacturer to experiment and develop competitive capabilities, not a positive news for US’s relative defense capabilities.

Fascinating read! While there is no question that AR improves the efficiency of a human working in a warehouse, I question whether AR+human in a warehouse will be obsolete even before it gets widely adopted. If AR can generate such great savings by making a mistake prone and inefficient human more efficient, complete automation could eliminate the need for human involvement and drive greater efficiency and accuracy and thus even great savings. Robots and full-scale automation are already being deployed in warehouses(1). Therefore, use of robots and automation appears to be a more compelling investment than AR+human for any warehouse operators making an investment to optimize their operations.
(1) https://qz.com/952240/righthand-robotics-has-automated-a-new-type-of-warehouse-work-that-could-help-amazon-amzn/

The essay does an excellent job of recognizing the impact of climate change on Nestle’s supply chain as well as actions Nestle has taken and needs to take to help its suppliers be sustainable. Nestle working with coffees farmers is a great example of where sustainability and good longer term business objectives go hand in hand, and it’s even a bigger win because in the process some of the most vulnerable members of Nestle’s the supply chain, smallholder farmers, are getting the resources to adapt to the consequences of climate change. However, I question whether Nestle is doing adequately given its vast and far reaching supply chain and whether Nestle doing these coffee related projects more as a PR stunt for their coffee drinkers, who tend to be inquisitive about ultimate sourcing of their coffee. For instance, there are reports of how Nestle’s suppliers are engaged in vast deforestation to plant new palm trees so they can keep up with Nestle’s demand for palm oil (1). Since palm oil is used as one of many ingredients in many CPG products without direct attribution to a specific final products, Nestle doesn’t seem to take any responsibility for the sustainability of its palm oil supply chain. I would love to see Nestle take an even handed across all of its supply chains as opposed just those that are most visible.
(1) http://www.greenpeace.org/international/en/campaigns/climate-change/kitkat/

The essay poses an interesting question of whether an incumbent Indian bank trying to be a digital banking pioneer should continue with its branch expansion along with its aggressive digital expansion. I think the answer is yes. The context is important – digital banking is relatively new product in India and largely ushered in by government’s push for digitalization of paper currencies a year or so ago. The technical ecosystem and and internet/digital penetration, while growing, aren’t necessarily mature. The change in consumer behavior to easily accept digital-only banking might take time given the novelty of the technology and issues such as security for service as sensitive as banking.
The other consideration is that digital and physical expansions are not mutually exclusive – in fact they should be quite synergistic. Branches raise brand awareness and serve as customer acquisition vehicles. Those customers can then be easily transferred onto the digital platform. Many customers may also view the physical branch as the troubleshooting center for the digital banking and thus be more likely to sign up for the service online. I also wonder question whether the third largest bank can remain third largest if it stops physical expansion at 3,300 branches for 1.3bn people to focus just on digital expansion.

On November 26, 2017, Ragnar commented on Bringing Mortgages into the 21st Century :

While the transformational power of digital notary services is undeniable, I worry whether an institution such as Wells Fargo is best suited to be an early adopter of such services. First is the concern for security. The product is new and relatively untested. Wells Fargo, who handles millions of closing, could put many of its customer to risk if the service somehow gets compromised. Second is the question of adoption – it’s not just enough that Wells Fargo provides the digital notary service, it will have to convince customers to also be an early adopter. While doing so could differentiate Wells Fargo from the competitor, it will require dedicating significant resources, perhaps away from the in-person notary they are currently providing.

May Wells Fargo can segment the roll-out to first target the digitally savvy customers, who have Wells Fargo mobile app, deposit checks online, etc. and phase-in other customers as the services gets more mature and use (and abuse) cases more fully played out.

On November 26, 2017, Ragnar commented on Protectionism Threatens to Cripple US Solar: Spotlight on Sunrun :

Because the tariff indubitably reduces the customer economics for installing rooftop solar and consequently the aggregate demand for new solar installations, it is only logical that Sunrun rationalize current the organization and the cost structure that were built for a bigger market opportunity.
However, the suggestion regarding Sunrun to go on the offensive with regards to market share and opportunistic acquisitions even as the broader market shrinks is not without significant risks. First, Sunrun’s core business is highly capital consumptive and thus requires capital markets to continually finance the new portfolio of its customer contracts. However, capital markets get affected by a number of macroeconomic variables, resulting, sometimes, in freeze in financing available. Thus Sunrun, if were to go aggressive on market share and acquisitions, will need to have a deeper war chest and longer capital plans in place. Second, Sunrun’s margin is tied to not only what it chargers to the customers but also how the capital market values its customer contracts. Margin, especially if the residential solar industry is in distress, needs to be managed on both sides. Third, it’s unclear what buying small installers in the US will give to Sunrun that it already doesn’t have. Most small installers are regional sales and marketing organizations that routinely sell off the customer contracts they generate. So acquiring those players won’t give much operating leverage as the customer contracts would likely have been monetized. Additionally, Sunrun, being a national player, already has a sales and marketing presence in most of the attractive regional markets.