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On November 30, 2017, T commented on Could isolationism be a drag on H&M’s fast fashion? :

Great write up. I do believe that H&M has to think about the increase in isolationist movement and decline in global trade, however, I believe that H&M has a few things going for it. First of which, is that clothing is such a staple good with a ton of production coming from Asia. For a country to put a tariff on clothing products, I believe, is less likely than for other products (i.e. automobiles). In addition, labor costs in Asia for clothes production are so much cheaper than in Western Europe and the United States that even with tariffs, I don’t believe that building facilities in the local market would be warranted. The real threat that I see is not from the cost side but an effect on H&M’s value proposition. If the company is unable to swap in fashion trends quickly, customers will be less inclined to shop there and this will open the market for competition.

On November 30, 2017, T commented on Can Protectionism Save Auto Jobs in the US? :

Awesome write up. I do believe that Ford made the right decision in moving production to China and in essence, calling President Trump’s bluff. One thing that wasn’t mentioned was that if Ford’s costs increase it will be reflected in their price which is then cost passed on to the U.S. consumer. This is lies in the essence of capitalism, find the most efficient way to do business to win over consumers. If Ford kept manufacturing for smaller cars in the U.S. they would have higher costs and would have to have a higher retail price. This would also be the case if Trump implied a tariff on them for producing in China. As such a large and critical company, I believe that Ford knows that the government won’t do anything to increase their costs because millions of Americans will get effected by higher prices.

A fascinating piece!

I really applaud Tesco’s vision. I cannot fathom the idea of fresh food in landfills while people are hungry. However, addressing your question, I see a huge issue that will arise from suppliers. If Tesco is more efficient in their ordering that means less demand from their suppliers who may push back on this change. In addition, suppliers know that if they are unable to satisfy the orders from a large account like Tesco, they may lose all of their business. If Tesco implements more dynamic ordering to match demand trends that they are seeing, which could continually change, it will incentivize their suppliers to overproduce, resulting in huge amounts of waste. I fear that with less sophisticated digital relationships with charities, the waste from suppliers will be more prone to going to landfills.

On November 30, 2017, T commented on Big Missiles + Big Data = Small(er) Price Tags? :

Very interesting topic, thanks for sharing!

I did the complex financial analysis and realized that, yes 70% of Raytheon’s costs coming from materials is a HUGE amount. With such a large fragmented group of suppliers, I think that the work Raytheon is doing with big data systems and improving communication tools are worthwhile investments that can really boost the firm’s bottom line. As you mentioned, there is an increased demand for defense with the increasing tensions in the global political climate, so I believe that although revenues have been relatively flat recently, the industry will continue to adapt.

Something I thought throughout all of this was – what is the competition doing? With a lot of the revenues from these firms come from long-term and very large contracts from the government, I would suggest that Raytheon work with its competitors in sharing big data analytics to make all their suppliers more efficient. I assume that many of their suppliers also work with other large defense companies and with a growing overall pie, it could be beneficial for them to work together in sharing big data and innovation to reduce all of their costs more than they would be able to on their own.

On November 30, 2017, T commented on Enjoy that cup of coffee, it may be your last… :

I think you hit the nail on the head when mentioning that, although a noble mission, Nestle’s reduction of emissions and use of renewable energy is not enough to save the industry. The coffee industry has a ton of players and has a massive global market. The key for Nestle is definitely in their R&D efforts to create more sustainable farming practices or even new coffee harvesting techniques altogether. I am curious to learn more about what kind of R&D breakthroughs there have been in the past and to find out what Nestle is currently working on.

As a concerned consumer I was intrigued by Exhibit 1 where it shows the three things consumers can do to help – most of which point to demanding more out of coffee brands to promote sustainable practices and support smallholder farmers. Have any initiatives like these already happened? I don’t believe the average consumer today understands the risks facing the coffee industry and it will be interesting to see how they react (because I know coffee drinkers need their coffee) when they learn about the threats ahead.

As a public company, I believe AB InBev’s primary goal lies in its fiduciary duty to its shareholders – to maximize profit and returns on its share price. Now, sustainability for a massive company like AB InBev is clearly a huge issue for society at large, however, I don’t believe the company will feel any of the effects from water scarcity on its bottom line in the near future. As a result, I believe the duty to push AB InBev towards a more sustainable model should come from government regulation, shareholders, and consumer boycotts, in order to incentivize the firm to truly make a push towards sustainable water consumption. Until that happens, I do not believe the firm is truly trying to do much. Yes, we have seen some initiatives, however, to me, it seems more like green marketing, as most of the initiatives haven’t yielded much return. Reducing water consumption by 6% over the next 4 years is far less than many other companies are doing and the “Buy a Lady a Drink” initiative has only raised $3M – a drop in the bucket for a company with a market capitalization of $190 billion.

I think this is a very interesting topic and thank you for sharing!