TOM Challenge #10027

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On December 1, 2017, TOM Challenge #10027 commented on Amazon: A role model for supply chain innovation in the wake of digitalization :

Amazon will take over retail as we know it. Frankly, I think they already have. In aggregation, the three ideas you highlighted are a different business model than traditional retail. You pose a great question about localization. It’s unclear to me that local producers have the scale to keep prices as low as Amazon would like. The costs to this technological approach to retail makes the cost to the retailer (ex. raw goods) much higher at AMZN than at a typical grocery or department store. However by squeezing suppliers (national suppliers with scale and price flexibility) they’re easily able to compete on price while delivering on their core competency, convenience.

On December 1, 2017, TOM Challenge #10027 commented on Supply Chain as Source of Competitive Advantage :

This is a great write-up on P&G’s supply chain. I am particularly impressed by the choice to address the short and long-term approach. As I think about the question posed “For most of the multi-national companies, maximum growth is coming from emerging markets. Will emerging markets be able to keep pace with digitization, and that too in a cost effective way,” I wonder how different a supply chain in the developed world is than a supply chain in the emerging markets. And further, I wonder if supply chains that “end” in developed markets already have substantial emerging market operations. Globalization will require that in order to digitize a supply chain that feeds into a developed market you must digitize the emerging market component of the chain as well. Thus as business growth occurs in emerging markets, the supply chain becomes more localized and the points of initiation will already have the digital component.

As for the cyber security threat, that’s a terrifying reality that I do not have a handle on.

Great article Jordan!

I think it’s very important for WMT to consider the implications of isolationist policy on their business model. It’s an interesting question regarding how a move away from foreign manufacturing would impact the bottom line. I’d imagine protectionist policy would require companies produce goods within the trade organization that they’re sold. This would take a great number of WMT to Mexico, or result in increased cap-ex as production becomes automated in the US.

The way in which WMT chooses to absorb/pass on these costs will be interesting. The company has acquired JET and Bonobos recently, each of which reduce they firms alignment with the “EDLP” slogan. These outlets maybe a destination for a pass through of the increased costs. If not, what is the consumers alternative? Isolationist policy that impacts WMT will impact every other retailer AMZN included, even if EDLP gets more expensive, it will still be EDLP and thats all the consumer cares about.

On December 1, 2017, TOM Challenge #10027 commented on H&M Aims to be Climate Positive by 2040 :

It’s incredible that this was submitted before the IKEA case! Great write-up on the situation at hand. I think it is possible for H&M to remain competitive with Zara as they push the sustainability offering. The assumption here is that they’ve maintained market share in improving sustainability from 2015 to 2016. As they evolve to become a more sustainable/environmentally friendly business, this initiative becomes a competitive advantage. Consumers take note, and all of a sudden you have a positive feedback loop as word of mouth builds into a network effect that we can define as the “sustainable shopper.”

To your question “How can H&M directly influence other retailers to make strides in climate positive initiatives?” Simply put, a consumer response that leads to additional market share and profits will do the trick.

On December 1, 2017, TOM Challenge #10027 commented on Does a Trump presidency mean fewer free t-shirts? :

Who knew Gildan was Canadian! Great write up Brian. In response to your question “Should Gildan be investing in a full-time lobbying / regulatory team,” I believe they should. This can be justified by framing it as an integration of the supply chain. In discussing supply chains we consistently focus on reducing variability and shortening the time required for information to reach every point of the chain. To build a cross border business without taking every opportunity to influence or at least respond quickly to potential policy decisions, seems to ensure the “whiplash” effect will be exacerbated within your business.

On December 1, 2017, TOM Challenge #10027 commented on Wells Fargo: What Are The Obligations of a Financier? :

The question you pose “to what extent are financing institutions obligated to limit or cease lending to potentially non-environmentally sustainable projects and companies,” is a difficult one to answer and very much dependent on the economic climate. Today, it’d likely be difficult for Wells Fargo to have any marked impact in constraining the flow of capital to positive NPV projects that aren’t environmentally friendly. However a capital constrained economy would provide the opportunity for Wells Fargo to offer lower interest rates to projects that are aligned with their environmental objectives.

I have concerns about the “cease lending” portion of the question. In the event that Wells Fargo were to pull funding from clients with no material change in the business they initially agreed to lend to, the PR impact could have a devastating effect long-term.