Sumit Malik

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I appreciate the thoughtful article. The author raises an interesting point about the macroeconomic consequences of isolationism; I’d note that in addition to impacting JP Morgan, the implications of such macroeconomic headwinds are broadly generalizable to global businesses across industries. Uncertainty regarding protectionism has impeded investment in certain industries in the US (e.g., solar); it similarly has influenced companies to defer strategic transactions and large-scale investments in the UK in the wake of Brexit.

Isolationist policies have the potential to considerably weigh on economic growth. Persistent protectionism compresses economic growth, interfering with countries’ ability to specialize in their comparative advantage. Combined with the author’s concerns regarding increased transaction costs and reduced consumer spending, the result is that businesses with the greatest reliance on frictionless international markets have much to lose [1].


1. Zandy M, Lafakis C, White D, Ozimek A. The Macroeconomic Consequences of Mr. Trump’s Economic Policies.; 2016.

On December 1, 2017, Sumit Malik commented on Personalized Medicine, Personalized Supply Chain? :

The supply chain challenges that plague CAR T cell therapies are an example of how manufacturing and logistical constraints can fundamentally impact the focus of research and development. In this case, a high-functioning supply chain is not simply a question of system optimization; it’s a gating issue for sustainable commercialization. If Novartis is unable to maintain an efficient supply chain at a large scale, as the author suggests, this has the potential to shift research at the company toward more easily deliverable alternatives.

Despite the challenges that Novartis faces in developing the infrastructure to support novel therapies, the pharmaceutical industry is broadly seeing rapid digitalization and increases in supply chain efficiency that will benefit the company. Heightened expectations of responsiveness from patients, medical specialists, and suppliers alike have increased interconnectedness and transparency across the supply chain. This provides the groundwork for the high-functioning system that Novartis demands [1].

1. Champagne D, Hung A, Leclerc O. The Road to Digital Success in Pharma.; 2015.

Great article. To respond to your question on implications of Axis’ incumbent status, from my perspective Axis faces increasing competitive pressure as certain barriers to entry in India’s banking system erode due to digitalization; at the same time, the company maintains other competitive advantages that are outside of the scope of digital platforms.

Whereas physical branch networks once served as a substantial moat that deterred potentially competitive entrants, this impediment has significantly diminished. Consumers are increasingly relying on online banking and increasing touchpoints with financial institutions through mobile devices. That said, customer acquisition is still costly for technology-enabled entrants, and the brand recognition afforded by a branch network has considerable value [1].

As financial services increasingly leverage technology, physical branch networks and online-only banks share in the benefits of unprecedented access to customer data. This enables greater cross-selling of financial products, increased ability to create loyalty with customers, and more effective underwriting.


1. International Finance Corporation. Mobile Financial Services: Its Role in Banks and the Market. Washington, DC; 2014.

On December 1, 2017, Sumit Malik commented on Kellogg’s Leadership in Fighting Climate Change :

Thanks for the great article. I agree that Kellogg is moving in the right direction through its initiatives to reduce its GHG emissions, carbon footprint, and environmental impact, but it is challenging to hold the company accountable on its progress. The data collection on carbon emissions would benefit from greater sophistication to more accurately quantify the environmental benefit of Kellogg’s initiatives, and the range and complexity of sources of environmental impact can be difficult for the company to manage.

The methodologies widely used in industry to estimate emissions are often quite simplistic, failing to take into consideration idiosyncratic factors that affect environmental impact. Importantly, Kellogg and its peers, such as General Mills, have taken the additional step of welcoming public scrutiny and engaging with non-governmental organizations, leveraging work from CDP, the World Resources Institute, and others [1,2].

Kellogg can continue to further sustainability goals by setting clear internal accountability targets, developing more thorough measurement methods, and maintaining transparency. By passing best practices to suppliers and setting ongoing, achievable, near-term targets, the company can further push the frontier of environmental impact in its industry [1].


1. Winston A. How General Mills and Kellogg Are Tackling Greenhouse Gas Emissions. Harv Bus Rev. June 2016.
2. Gowdy J, Winston A. Evaluation of General Mills’ and Kellogg’s GHG Emissions Targets and Plans: Independent Assessment Conducted by Winston Eco-Strategies for Oxfam’s behind the Brands Initiative. Oxford, UK; 2016.

On December 1, 2017, Sumit Malik commented on Nissan after Brexit: Driving Manufacturing out of the UK? :

Very interesting article. While tempting to assume that the UK government will take the necessary steps to ensure that Nissan keeps its manufacturing operations in the country, due to the importance of the UK automotive industry and the negative publicity that would ensue from a departure, Nissan would do well to be cautious and maintain its optionality [1]. In addition to continuing to make its case that the government provide adequate relief and support local parts suppliers, Nissan in the near term should be cautious about making high-value, long-term domestic capital investments until it has more clarity on the direction of public policy [2].

The UK automotive industry more broadly has reined in domestic capital investments to reduce downside exposure to a hard Brexit. The aggregate £1.66 billion invested in the sector last year represented a 30 percent reduction relative to 2015, reflecting deferral of non-essential capital expenditures following the June 2016 referendum [3]. In light of the magnitude of the fixed, upfront investments that Nissan requires to build out manufacturing operations, planning for the future means taking definitive actions to adjust its spending today.


1. Fraser D. EU Trade “Linked to 134,000 Scots Jobs.” BBC News. Published November 29, 2017.
2. Campbell P. Investment in UK Car Industry Plummets amid Brexit Uncertainty. Financial Times. Published July 2, 2017.
3. Campbell P. Car Industry Faces £4.5Bn Bill without Brexit Deal. Financial Times. Published November 28, 2017.

Thanks for sharing your insight into an important topic. I agree that a lack of preparation for disruptions from natural disasters in the pharmaceutical supply chain is highly problematic, but I question the viability of stockpiling inventory. In addition to capital costs of carrying heavy inventory, drug stockpiles have a finite shelf-life, and an excess of unused inventory exclusively set aside for emergencies can become wasteful. I would argue that regulatory policy intended to minimize manufacturing downtime of drugs that lack viable substitutes has the potential to be more effective, even if it means weakening property rights for patentholders in extreme scenarios.

Long-term storage of drugs can threaten their chemical integrity, which beyond reducing their effectiveness can result in the formation of toxic byproducts. That said, there is considerable variability in the shelf-life of medicines, which can make a strategy of building inventory more or less effective depending on the product in question [1].

In geographically concentrated drug manufacturing, downtime for a single facility resulting from local challenges can cause medicine shortages for the entire industry because intellectual property rights inhibit competition. Strong intellectual property rights incentivize medical innovations, but they prevent alternative manufacturers from stepping in to meet demand when the patentholder falters, with potentially severe implications on the wellbeing of the population. A policy position to reduce patent protections when disasters occur could keep the market from grinding to a halt when unexpected challenges arise [2].


1. Wan Po AL, Farndon P, Palmer N. Maximizing the Value of Drug Stockpiles for Pandemic Influenza. Emerg Infect Dis. 2009;15(10):1686-1687.
2. Allen E. Prosecution Benefits: A New HOPE for Bridging the Patent Law Access Gap. Seattle J Soc Justice. 2011;10(1).