Sarah Jewett's Profile

What say you on the anti-trust front of merging Schneider and J.B. Hunt? No concerns, Matty?

Great article, T. I agree with Jen in wondering whether YPF has enough influence to keep the Argentinian Government’s idea of isolationist tendencies at bay. Regardless of the answer, I think it would behoove YPF to engage in preventative behavior that helps grow their access to exploration, production, and development technologies of their own that they could draw upon in the event of drastic governmental actions. In fact, I think YPF’s semi-precarious situation provides an excellent opportunity to examine and implement some tactics currently used by leading US E&P companies like EOG. EOG has developed significant expertise in subsurface analysis, completion design, and sourcing capabilities and is well known for being a company that has divested from reliance on service company knowledge and technology. Replicating this type of strategy could be an interesting and perhaps less obvious use of capital that might fuel long-term productivity for the company, in both Vaca Muerta and beyond.

Austin,

Interesting article. I find it exciting and uplifting whenever large companies such as HP are willing to make significant commitments to incorporating sustainability into their supply chains. I would be curious to know what measures exactly HP plans to take and, like we discussed in sustainability at IKEA, how far they will be willing to extend their supply chain in order to ensure the quality and substance of sustainability claimed by their suppliers. I believe that as more corporations move in the direction of demanding sustainable measures of their suppliers, suppliers who are willing to provide greener sourcing alternatives will gain an increasingly competitive advantage. Those who are unwilling to comply for cost reasons or otherwise, I believe, will experience greater pressures to do so by their customers in the coming years. In the same vein, I think it will soon become a low-hanging fruit for corporations to attract green-conscious shareholders by touting green goals and actions. As a result, I think many companies will be willing to make bulk orders for servers for which they pay a premium justified by green ratings. My only question for HP’s strategy would be this: is a 15% reduction in GHG emissions enough progress to justify the premium or will HP have to shoot for something more?

Solomon,

Thanks for writing an interesting article about another type of business that is struggling to keep up with our rapid conversion to digitization. I agree with the points you made about Pfizer needing to embrace digitization in order to keep up with a changing supply chain, improve internal processes, and meet distributors’ needs. I can see how companies like Pfizer struggle to simultaneously prioritize operations optimization while maintaining their competitive advantage as manufacturers of cutting-edge pharmaceuticals. Will efficiency improvements come from hiring consultants? Building internal teams? Restructuring their organization? I think creation of a standard enterprise resource planning system is a good first step, but they will have to do much more in the coming decade to stay ahead of the curve.

I think there’s yet another big reason large pharmaceuticals will need to embrace digitization. The widespread move to digital information sharing has incited a revolution where consumers and patients are now much more aware of the types of treatments and therapies available to improve their health.[1] As people begin to want to take control of their own treatments, Pharma companies like Pfizer will be faced with the challenge of maintaining their competitive edge in a world where their consumer has access to better information on their products, prices, and competitors.

[1] David Champagne, Amy Hung, Olivier Leclerc, “How Pharma Can Win in a Digital World,” McKinsey & Company, November 29, 2017.

Kevin, I think this is a very interesting topic, though it hurts my feelings to think of children migrating away from toys to screens. It’s incredibly surprising to me that 85% of children in the US have access to tablets. Call me old fashioned, but I have this wild fantasy that Newton’s Third Law (every action has an equal and opposite reaction) will apply even in this case of the most rapid introduction of technology in history. Sherry Turk, a science professor from MIT, expressed the kind of concern I would imagine might become prevalent in the decade to come in saying she “fear[ed] that children who do not learn real interactions, which often have flaws and imperfections, will come to know a world where perfect, shiny screens give them a false sense of intimacy without risk.” [1]

Because of this, and because of the way some millennials have seemed to become sensitive to limiting their technology usage, I have faith yet that toys will remain relevant. That said, I think it is a good idea for a company like Mattel to begin to invest in screen-centric offerings to adapt to the times. In addition, I believe that digitization of supply chain will be absolutely necessary in the coming years and it would behoove Mattel to continue this practice going forward. Nice piece, I enjoyed it.

[1] Nick Bilton, “The Child, The Tablet and the Developing Mind,” The New York Times November 29, 2017.

Helen,

Killer topic. Unfortunately I think Tesco and other UK businesses will start and continue to feel the hurt of the Brexit decision for a good while to come. This is a great example of the difficulties that occur when international suppliers of goods work with national retailers, housed in countries with varying degrees of political stability and economic regulation. I think your suggestion that retailers might move towards localizing their suppliers in order to ease price fluctuations is an agreeable one. In addition, I wonder if there exists a world where wholesalers band together in order to form a sort of monopsony for certain products in high demand such as marmite. I suppose I don’t know enough about economics to be able to stand behind such a wild idea as that.

Finally, I read an interesting article that claimed that Brexit could be a blessing in disguise for food retailers after all. The article stated that retailers like Tesco have battled for years against rampant growth of German discount brands such as Morrisons, Asda, and Sainsbury’s, causing them to significantly cut prices, like you mentioned. This price war has squeezed the food retail industry, inhibiting growth and causing persistent deflation. The article claims that, as a result of the falling value of the pound, inflation might be a good thing for retailers like Tesco’s bottom lines (as long as they can pass on some portion of the price increases to the shoppers, which is a challenging assumption). [1]

[1] Ashley Armstrong, “How Retailers Can Fashion Their Way Through Brexit,” The Telegraph: Business, http://www.telegraph.co.uk/business/2016/06/27/how-retailers-can-fashion-their-way-through-brexit/, Nov 28, 2017.

OpXYL,

Good piece and a very interesting and often controversial topic because of the significant environmental and cost implications surrounding these types of regulations. One thing needs clarification: the BLM is incentivized neither to help oil companies reduce their operating costs, nor to ensure low energy prices to US taxpayers. In fact, the mission of the BLM is “to sustain the health, diversity, and productivity of the public lands for the use and enjoyment of present and future generations.” [1] Thus, the BLM is less concerned with increased operator cost or delay in permitting and instead, more concerned with whether or not there is widespread compliance with tighter flare gas regulations. Because of this, I think your suggestion of implementing an integrated monitoring system is, conceptually, a very interesting one that will prioritize the protection of public lands. That said, I am concerned that the cost associated with researching and developing technology of this kind is likely prohibitive for a governmental organization such as the BLM.

As a side not, one cool thing that the American Association of Petroleum Geologists has been working on to ease the burden on this issue is the development of drones that monitor methane emissions for regulatory compliance purposes. Check it out right here: http://www.searchanddiscovery.com/documents/2017/70235nash/ndx_nash.pdf.

[1] Bureau of Land Management, “Our Mission”, [https://www.blm.gov/about/our-mission], 28 Nov. 2017.