A small US manufacturer sells 60% of its products to foreign companies. If the US adopts a protectionist trade stance and increases antidumping duties on foreign countries, there's a good chance foreign countries will respond with duties of their own. [...]
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TOM Student 2017
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It鈥檚 daunting for me to think about Blue Apron taking on Amazon. I definitely agree that digitizing its supply chain to improve reliability is a good step for them to take. I wonder, however, how far they should take this.
Automation is usually most beneficial when a company has high volume and high standardization [1]. Amazon definitely has both these qualities, and therefore should benefit from maximum automation. Blue Apron, however, is a smaller player. And, to differentiate themselves against Amazon, I believe they may need to offer more customization and seasonal offers. With a smaller, more dynamic set of goods in their supply chain, I worry that their ability to digitize profitably is limited.
[1] David Allais, 鈥淎utomation in the Warehouse: Asset or Obstacle?鈥� Industry Week, July 13, 2017, [URL], accessed November 2017.
To me, this case raises an interesting strategic question for Unilever鈥檚 executives: Do they have a fiduciary duty to try to sway political policy? Your essay clearly highlights the negative impact of Brexit on Unilever. It begs the question, therefore, did Unilever鈥檚 executives appreciate the negative consequences of Brexit beforehand, and, if so, did they do enough to stop it from happening?
A review of press releases shows that Unilever executives hesitated to come out strongly on one side of the issue, with one statement saying, 鈥�”We cannot predict the consequences on the economy and subsequent impact on our operations in the UK” [1]. Moreover, Unilever executives hesitated to really rally their employees to vote against Brexit. A note to employees said, for example, 鈥淚t is not for us to suggest how people might vote… but鈥� we feel a responsibility to point out that Unilever would…, in our considered opinion, be negatively impacted鈥� [2].
Given the significant impact of Brexit on Unilever, I believe executives should have been more proactive and forceful in these public statements.
[1] 鈥淯nilever bosses say firm ‘would be hit by Brexit’,鈥� BBC News, June 16, 2016, [http://www.bbc.com/news/business-36544875], accessed November 2017.
[2] Ibid.
I think it鈥檚 interesting how you keyed in on the fact that increased trade restrictions could slow down H&M鈥檚 delivery cycle. Is it possible, though, that there is an even bigger threat to H&M: that trade restrictions shut down their delivery across borders altogether?
One of H&M鈥檚 main value props is not only that they鈥檙e fast, but also that they鈥檙e very cheap. I worry that if the US or European countries were to levy duties on Asian imports, H&M would have to lower its margins or move away from its low-cost position. This past year in the US, for example, the U.S. Commerce Department increased antidumping actions against foreign importers 61% [1]. If this trend continues and spans to other Western countries, it could be much harder for H&M to cost-effectively import apparel into these countries.
That said, I think your idea to begin sourcing more products from Western countries becomes even more attractive. The question then becomes, though, can they do that cost-competitively?
[1] 鈥淯.S. Department of Commerce Issues Affirmative Preliminary Antidumping Duty Determination on Aluminum Foil from the People鈥檚 Republic of China,鈥� press release, October 27, 2017, on US Commerce website, [https://www.commerce.gov/news/press-releases/2017/10/us-department-commerce-issues-affirmative-preliminary-antidumping-duty-3], accessed November 2017.
It鈥檚 interesting to me that Walmart is giving its suppliers access to the Data Caf茅. While I can see how this is beneficial to both Walmart and its suppliers in the short-run, I wonder if it will speed up Walmart鈥檚 disintermediation in the long-run.
Walmart is essentially training its customers to leverage technology to improve their operations. Digital technology is often the most common avenue suppliers use to disintermediate their retailers. By training their suppliers to be more tech-savvy, is Walmart essentially training them to become more independent? Right now I recognize that Walmart owns this technology and data, so it would be difficult for suppliers to go out on their own and operate without it. As customer data continues to proliferate across the economy, however, I wonder how long it will be before suppliers won鈥檛 need Walmart to provide data access or infrastructure.
Thanks for sharing. It鈥檚 scary to think that the supply and cost of an everyday, commodity product like peanut butter could be so dramatically impacted by climate change already. (The 40% jump in prices in 2011, for example, is a costly change for many Americans like myself who eat peanut butter everyday.)
Reading your writeup, I was asking myself the same question you asked at the end: does the pace of climate change merit significant investment today?
Planter鈥檚 annual sales have been as high as ~$1B, i.e., they are a meaningful revenue contribution for Kraft [1]. If Kraft therefore believes the National Climate Change Assessment that peanuts will truly be 鈥渟carce鈥� by 2030, I believe they need to take more dramatic action today. Beyond encouraging their growers to shift toward more resilient growing practices, I believe they may need to invest substantially in R&D to identify and develop breakthrough farming practices to withstand climate change. In the face of substantial risks to their supply chain, I believe this type of substantial investment is warranted.
[1] Nielsen Panel, xAOC, 52 weeks ending 2011.