RM's Profile

A really interesting essay. I was shocked by the stats on the proportion of medicine that is corrupted by the point of delivery, which clearly demonstrates market potential.

I thought there were two particularly important questions here which your article addressed well – first, how can DHL use technology to improve it’s offer in the cold chain sector; and second, how can it do so in a way that creates barriers to entry for other potential market participants.

In the context of the first question, I thought exploring use of the blockchain and internet of things were both really good suggestions. I wondered if it might also make sense to explore drone usage for cold chain deliveries before competitors do – as you suggest they will – in particular if it allows a reduction in corruption rates for harder to reach clients.

In terms of creating barriers to entry – if DHL moves quickly it may be able to establish scale, client relationships and technological leadership (perhaps using some of the ideas above) which will make it harder for competitors to enter the market. I also wondered if it might seek to sign long term supply contracts with its customers, linked to the delivery of new technologies.

I thought this was a really interesting essay, providing a powerful example of the fact that no industry is immune from the impacts of digitalisation. I had a couple of thoughts as I read it.

First, beyond modular home construction, innovation in home building technology may permit other forms of construction on-site, such as with robotic brick-layers:

https://www.youtube.com/watch?v=2-VR4IcDhX0

And using 3d printing:
https://www.youtube.com/watch?v=GUdnrtnjT5Q

While this wouldn’t permit the same economies of scale and output as factory based production, it might allow more bespoke designs in harder to reach locations.

Second, the impact of labour-eliminating technology in the construction industry has the potential to have a profound and negative social impact at the bottom of the labour market. Whereas when many agricultural jobs were destroyed through the mechanisation of farming people were able to find employment in cities/factories as part of the industrial revolution, it’s not clear that equivalent opportunities will exist for manual workers in today’s economy. Governments and businesses will need to think hard about how they manage this transition.

I thought this was a fascinating essay and captured the current political risk outlook facing a global/diversified firm such as GE very well.

I was reminded as I read the analysis of the breakdown of risks between ‘firm specific’ and ‘market wide’ events that we have discussed in FIN – and wondered whether it might be possible to argue that these two types of risk begin to converge the larger and more global a firm becomes, e.g. if the US withdraws from trade agreements that may harm the profitability of individual GE product lines, but also reduce overall demand for all of it’s products if the economy slows. With that in mind (and in the context of your great depression example) I wondered if an additional way GE could mitigate market-wide political risk might be to invest in product lines that might experience ‘counter-cyclical’ demand. One possible example might be thinking about what sorts of machinery/equipment the government might need to procure if it wanted to implement a fiscal stimulus during a recession, e.g. to build new infrastructure.

I also thought your suggestion that GE could consider how it would redesign supply chains to rely more on domestic parts was very sensible. As further risk mitigation, I wondered if it might make sense for it to think about how/whether it could become a supplier of those parts itself.

Based on the company’s assessment of the level of risk, your question of ‘what cost to the bottom line of preparing for potential disruptions is acceptable?’ seems to be the key issue across both these points.

A really interesting article, highlighting a bold gamble on the part of Cessna which I hope succeeds. In response to your first question, concern would be that the value proposition of a business jet for corporate customers is very different to that of a commercial airliner for individual travellers.

Whereas I do think individual passengers would be willing to pay for a flight on a slightly slower plane if they thought it was cheaper and better for the environment, I’m not sure the same incentives would operate for high-flying (no pun intended) business executives.

Specifically, once a company has crossed the threshold of flying it’s C-suite round in private jets, is it really much easier from a PR perspective for that company to explain to the public that it’s jets are 15% more fuel efficient and 40% better for the environment than other companies? Perhaps. But given how precious most senior executives time is, in the absence of a public scandal I think they will take some persuading that the marginal mitigation of reputational risk is worth arriving later than their competitors for the same meetings.

A fascinating article and well researched article. Recognising that climate change overall is a huge issue overall, it’s refreshing to hear a case for some of the accompanying opportunities.

One thought that struck me is that it might not be just the pace of climate change (and so reduction in ice levels) that Rusatom needs to plan for uncertainty around – if demand rises for shipping via northern routes, then presumably: a). New competitors could enter the market (e.g. large freight companies might procure their own icebreakers), and b). Transport ship design might adapt so that, for example, large freight ships are fitted with their own icebreakers, negating the need for Rusatom’s service offer.

With this in mind, I wonder whether it might make sense for companies like Rusatom to begin thinking about R&D/joint ventures with large shipbuilders, while they still have a comparative advantage in the icebreaking field?

I also thought this was a great article. Luke Anusha, I agree it is hard to see US companies competing with low-cost Asian producers of low cost, standardised, high-volume equipment (although if PV unit costs fall far enough, then presumably transportation costs will come to represent a larger relative cost per unit, and so source of competitiveness for domestic manufacturers).

In the meantime, perhaps US companies could look to develop or acquire their own manufacturing capability in Asia to increase their competitiveness? Either way though, I agree with the suggestion in your essay that it makes sense to double down on the sources of US comparative advantage, e.g. R&D, in order to position for success in the long run.

More fundamentally though, there seems to be a trade-off between protecting US domestic producers (e.g. through tariffs) and minimising the cost of renewable energy for businesses and households overall – exposing a key tension at the heart of efforts to roll back globalisation.