Nike should be worried enough about Trump’s threats against China to develop contingency plans. Trump understands that many American businesses that are vital to the U.S. economy would suffer significantly if a trade war with China is realized. Many companies manufacture a majority of their products in China but sell in the U.S. If those companies were no longer granted access to China, or could not sell in the U.S., then their entire business model suffers. Instead of choosing this extreme scenario, I do believe Trump could impose significant tariffs for Chinese-manufactured goods. In this scenario, Nike must determine how to best redirect its manufacturing operations to other low-cost countries, with the goal of minimizing cost increases. Ironically, this solution only shifts manufacturing to the next low-cost country, and does not generate more American jobs, which is one outcome Trump is hoping to achieve by imposing tariffs.
Private sector companies have the responsibility to influence any public policy decisions that affect that companies triple bottom line. In the case of ViiV Healthcare, there is both a social and financial responsibility to promote globalization. As noted in the post, information flow across borders is critical to solving problems related to complex diseases. Isolationism limits information flow such as research and development, resulting in significant social consequences. Isolationism also prevents the best talent from flowing across borders to solve tough, “border-less” challenges, further suppressing innovation in this space. Financially, suppressing innovation translates to delaying or missing out on the next breakthrough drug, which could impact the financial bottom line substantially. When public policy has such potential consequences such as those described above, it is the companies obligation to do everything in its power to influence public policy decisions.
This article is very enlightening. I never realized the implications of climate change on the wine industry. What struck out most to me was the significant disadvantage regions such as South Africa and Australia are in due to geographic limitations. While other regions can expand to cooler areas, these regions are already on the coastline and cannot move any further. If other solutions cannot be adopted, such as using grapes that thrive in warmer weather, wine from these regions could reduce dramatically over the next few decades.
The steps that Statoil took to reduce emissions are impressive and should be a beacon for other oil and gas companies to follow. Statoil has demonstrated that it is possible, although costly, to remain profitable in oil and gas while honoring a commitment to reducing emissions. I do believe that the majority of oil and gas companies will require some government incentive to follow suit. This incentive could be in the form of government subsidies for companies that reduce emissions or penalties for companies that do not reduce emissions. Unfortunately, if not economically motivated, many companies will continue operating in a way that maximizes shareholder value, despite the environmental ramifications.
Offering same day and next day delivery service will be a significant value add for Uniqlo. By allowing customers to obtain their purchases the same day, this service eliminates the competitive advantage retail stores in terms of quick delivery. While this service may cannibalize sales in physical stores, there is potential for it to entice new customers to the brand, particularly ones that consider traveling to a physical store inconvenient and need their purchases quickly.
I do not think digitalization alone will propel Uniqlo to #1, as Zara and H&M can also embrace digitalization. It will take a variety of operational changes, such as just in time inventory, to compete with Zara in particular.
I agree that the oil patch is ripe for a revolution through digitalization. When it comes to well completion, for instance, petroleum engineers have made great strides to improve designs by coupling the traditional trial and error approach with advanced numerical modeling. However, the industry is not taking advantage of all of the rich data available, and in my opinion could better leverage predictive analytics and multivariate analysis to further improve completion practices.
In response to the question of whether traditional oil companies or new entrants will bring about digitilization, my money is on traditional companies. Although the oil patch is historically slow moving, we have seen that the industry can be remarkably innovative when left with no other options. For example, horizontal drilling and hydraulic fracturing were invented so that U.S. companies could reenter the oil market, and U.S. companies found innovative ways to reduce cost and increase productivity during the recent oil downturn. I believe traditional oil and gas companies will continue to innovate to remain competitive in today’s low price environment.