性视界

Really cool topic and analysis, Alison! Uber鈥檚 investment in new services is very exciting. Time will tell whether they can create a reinforcing product ecosystem that shields them from competition.

While investment in autonomous cars may be merited today, we will probably not see the benefits of those investments for decades to come. Simply put, it seems that widescale adoption of autonomous technologies may be far into the future. By 2035, autonomous cars are expected to capture 25% of the new car market [1]. This will represent a smaller portion of overall cars on the road, which means overall public adoption or approval may be somewhat low.

Some industry observers believe that adoption may come down to societal factors rather than the underlying technology. A recent Fortune article on driverless cars proposed that 鈥淸societal] friction will delay full autonomy for at least a decade, or however long it takes for the tech community (which hasn鈥檛 always been particularly empathetic) to collaborate with policymakers, regulators, insurance providers, and consumer advocates to address the significant social, regulatory, and legal challenges AVs will create鈥� [2].

Eventually, Uber may face operational difficulty and growing pains in transitioning its 鈥渇leet鈥� to driverless cars. My primary concern on this topic is that the public may not be comfortable with using autonomous car services as a method of transportation. Also, as you noted, Uber has shown that it is susceptible to negative PR and public backlash. I鈥檓 concerned about how the public might react to Uber essentially 鈥渓aying off鈥� hundreds of thousands of drivers by shifting to autonomous cars. With this technology several years down the road, I鈥檓 excited to see how digitally enabled driving and delivery services will change in the short term.

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Really interesting profile, Christine! Having spent a few months in Saudi Arabia, the supply chain of fresh foods and produce is a very real issue. Many expats and Saudi nationals join self-organized co-ops that fly in food from Europe, Africa, or Asia to gain access to high quality produce. Certain fine-dining restaurants in urban areas like Riyadh and Jeddah fly in high quality groceries daily.

A few thoughts on Almarai’s supply chain strategy. First, it makes sense that Almarai has looked to diversify its international supply chain, but how much control do they have over the distribution/delivery of their raw materials? Regulators in Argentina and the U.S. might be willing to keep trade relations open with Saudi businesses and Almarai, but what would happen in the case of regional conflict blocking the best ports for Almarai? Finding alternate ways of delivering the raw materials through less-than-ideal ports may prove costly.

I also wonder what sort of contingency plans Almarai has to mitigate supply chain concerns. With long lead times to ship supply from the Americas, I would imagine they need to hold high levels of raw materials inventory at each farm or a centralized warehouse, increasing inventory and holding costs. It may also be important to have emergency suppliers closer to Saudi Arabia in the case that the supply chain breaks down in the short term. With climate change and regional tensions, global supply chain management may become increasingly more important and complex for Almarai.

Awesome perspective, Kyle! I had a few thoughts on Walmart鈥檚 omni-channel strategy and competitive positioning over Amazon. Over the past few years, it鈥檚 clear that Walmart has made strides in expanding its omni-channel strategy. However, it doesn鈥檛 seem clear to me that Walmart鈥檚 rural presence has been an operational asset in directly enabling that growth. While this may be changing, I suspect most of Walmart鈥檚 eCommerce orders are still fulfilled by its central distribution centers. Potentially there is some level of brand recognition generated by physical stores that adds incremental value. Lastly, a good chunk of Walmart鈥檚 digital growth surely comes from its acquisition of Jet.com in 2016.

Amazon seems to be chipping away at some of the brick-and-mortar advantages through growth and acquisition. As recently as two years ago, Walmart was piloting a curbside grocery pickup service as well as grocery delivery鈥攂oth of which were digital-enabled. With Amazon鈥檚 acquisition of Whole Foods, this in-person service would now be easier to match. Whole Foods is also quickly becoming a digital asset to Amazon as well, with Amazon offering hundreds of Whole Foods pantry and dry goods to its Prime members.

Amazon is aggressively opening new fulfillment centers as well. They recently announced 23 new centers, including center expansion projects, across the US [1]. Many of these projects involve buying old shopping malls to convert into fulfillment centers. At the moment there is no shortage of vacant malls, so Amazon鈥檚 conversion strategy could be viable in the medium to long-term, depending on the density of centers they are targeting.

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Great article, Bruce! I completely agree that precision agriculture technologies will play a big part in reducing the environmental impact of agriculture and improving operations/profitability for growers.

A few years back, I worked with one of John Deere鈥檚 competitors on the issue of increasing adoption of precision agriculture. While adoption continues to rise, it remains below 25% for most technologies in most applications. Adoption rates vary widely by farm size, crop, and region. There are several reasons for slow adoption of technology that is鈥攁t least theoretically鈥攑ositive NPV in the near term. Some of the reasons, of course, pertain to growers themselves. Surprisingly, the fragmented network of ag equipment dealers is, to some extent, restricting the adoption of equipment as well. Dealers often play a consultative and trusted role in helping growers navigate capital-intensive purchases and evaluate ever-changing technology.

For dealers, a recent survey shows the top three reasons for not selling precision ag equipment are [1]:
-Precision equipment changes too quickly and increases cost
-The fees charged for precision aren鈥檛 high enough
-Demonstrating value to growers is a problem

For growers, the top three reasons for non-adoption are [1]:
-Farm income pressure limits use of precision services
-Cost of precision services to customers greater than benefits
-Lack confidence in site-specific recommendations

Conversion will not be simple. John Deere must need a robust marketing plan to address concerns and painpoints across the supply chain. This may include communication and promotion, grower/dealer financing programs, long-term profitability analysis, grower/dealer training programs, etc. In the end, growers may be hesitant to adopt such technologies until they are in the midst of skyrocketing input costs鈥攚e are not quite there yet.
Also, it鈥檚 worth noting that John Deere won鈥檛 be alone in the fight to convert growers into precision agriculture customers鈥攖he competition will be steep. AGCO, DuPont, Syngenta, and others are racing to snap up agtech start-ups [2].

1. 鈥淧recision Farming Adoption Trends and Analysis.鈥� CLIMMAR Congress. Purdue Agriculture. October 2016. Accessed November 2017.
2. Johnson, Ben. 鈥淚s the Agtech Startup Boom Over?鈥� PrecisionAg. November 13, 2017. Accessed November 29, 2017.

Really interesting topic! As a lapsed fan of Manchester City, I hope the effects of Brexit on the EPL are limited in nature.
I especially liked your take on strategies to broaden the talent pipeline. Still, as more teams in the EPL look abroad to develop and transfer talent, they should beware that newer football markets are looking to develop, retain, or acquire their own talent. China is investing heavily in national football development programs for children and Chinese teams are paying top yuan for foreign players [1]. Likewise, as football grows in popularity in the US, the MLS looks to grow its number of teams and share of national attention [2]. U.S. teams are increasing rapidly in value, from an average of $37M in 2008 to $185M in 2016, which is a strong signal that their spending power is increasing as well [3].

Without knowing the specifics of the U.K. foreign visa process, developed countries generally require countries to prove that similar talent could not have been found otherwise domestically before approving a foreign visa (a process commonly referred to as a labor market check). It seems English football teams will be able to easily navigate a labor market check, but I would agree that there may still be a significant impact on compensation and benefits, due to financial complexities resulting from Brexit. Teams will either not be able to offer the same compensation level to an individual player, or their player budget will not go as far.
My other concern is that access to the EPL鈥攊n terms of game attendance of foreign fans (i.e. becoming more costly/difficult to travel to the U.K. for games) and broadcasting rights鈥攎ay be at risk to some extent.

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Great piece! As a big fan of Amazon Prime, I鈥檓 excited to see how this will play out over the next few years. I really liked your take on which part of the pharmacy value chain Amazon will target, and I鈥檝e included a few thoughts below:

In the short term, I think Amazon will ultimately favor other expansion efforts over pharmacy (e.g. Amazon Fresh, Whole Foods integration, expanded Prime Now delivery). However, in the long-term I think this could be an attractive growth opportunity for an increasingly diversified Amazon Prime offering. As Amazon considers their entry strategy, it seems to me they should lean more toward entering through a strategic partnership with an upstream provider, such as a pharmacy wholesaler or pharmacy benefit manager (PBM). This would allow Amazon to more easily navigate a complicated legal environment and offer its robust distribution network to a mid- to large-size partner. Indeed, analysts at Goldman Sachs have declared that, for Amazon, 鈥減artnership may be what the Dr. ordered鈥� [1]. The analysts go on to say, 鈥淚n such a partnership, AMZN could manage the customer experience while the PBM processes, adjudicates, and fills the claim, still giving AMZN access to patient data and the potential to cross-sell related products鈥� [1]. It seems that Amazon is already testing potential pharmacy partnerships鈥攕ince November 2016, Amazon has partnered with a drugstore in the greater Seattle area to sell non-prescription drugstore products (including over the counter drugs) to Prime members in the area.

If Amazon chooses to pursue another part of the value chain, it may consider leveraging its expertise in logistics and growing B2B presence to more efficiently serve wholesalers and PBMs. In its first year of operation, Amazon surpassed $1B in B2B sales through its Amazon Business platform [2]. If able to effectively manage the complex legal requirements of distributing and selling pharmaceuticals, Amazon may be able to add value to small and independent drugstore chains by offering higher service levels. Still, this seems like a niche play, and I would tend to agree that Amazon鈥檚 greatest sustainable value-add in pharmacy appears to be derived from its consumer-facing operations.

1. Jones, Robert et al. 鈥淎lexa, refill my Lipitor.鈥� Goldman Sachs. August 10, 2017. Accessed November 27, 2017.
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