What. An. Article. The blockchain is fascinating and I fully believe this is one of those “internet-like” change coming to a theater near you, not some passing fad like fidget spinners. I agree with you that many firms will have a trouble switching to a fully transparent platform such as the blockchain. This will require a transformational push to disclose much information; however, I believe this can be accomplished by siloing certain parts of the business that are sensitive and changing their comfort level on information disclose. This technology will become increasingly important in counterterrorism efforts on their digital platforms so, in the long run, it will provide multiple benefits.
Additionally, the combination of the blockchain platform with autonomous ships (1) could help set Maersk far in front of the competition given their scale and subsequently larger upsides from these technologies.
The conditions that will incentivize a move to transparency will be the cost savings, efficiencies, counterterrorism assurance, and further integration to digital platforms. While this may be a difficult decision to make given that no one has made much progress in this space. The potential benefit is too large to leave on the table for another firm to capitalize on.
As a former Greek yogurt fan turned Skyr fan, I have a deep appreciation for this product. I didn’t realize the challenges Chobani underwent but had I heard about them my money wouldn’t have been on supply chain issues. The move to digital seems intuitive in this ever connected, digital, competitive world we operate in yet it took Chobani a few years to figure out the solution.
To you your question on the tension between predictive analytics and flexibility, I think there is definitely an optimal solution which will vary depending on the market. For mature saturated markets, predictability becomes key as consumer habits become well known and easier to project and fulfill. In new markets, I don’t believe predictive analytics will have much impact initially as the market is being developed but it will be a tool which can be deployed in the future. Furthermore, once the digital capabilities are in place coming into a new market and deploying predictive analytics shouldn’t be difficult. Therefore, I believe the tension between flexibility and prediction is a small one with the impact of analytics far outweighing any restrictions on flexibility.
Your first question is much harder to answer (hence saving it for last) since many firms across all industries are grappling with this same issue. What gives me hope is new technologies such as Blockchain, can help combat the issue of security due to the transparent nature of its system. Additionally, private industry and government are both investing large amounts of resources and human capital in combating counterterrorism, which will ultimately benefit all organizations (1). Chobani should invest measures in ensuring their information remains secure; however, they should actively partner with other organizations which are dealing with the same issues to combat this problem together (2).
While the benefits in the short-term appear to be positive for ArcelorMittal (AM), I would proceed with caution when setting prices due to negative impacts down the supply chain. Depending on who the major purchasers of steel are I would be concerned with where they have their manufacturing facilities and whether they are considering offshoring their sites in order to access lower cost raw materials and labor. As you pointed out, the auto industry would bear the brunt of these price increases which would then likely be passed on to consumers. These consumers, in turn, could switch to foreign car manufacturers, which ultimately is a net negative for US consumers.
AM should also be wary of overinvestment in the US as these policies are subject to change depending on the administration. I fully endorse investing in equipment and technology that makes you more competitive; however, if these same gains can be captured in another country with lower investment requirements then I would focus on offshoring. For the executives at AM, I would focus on a balance between offshore and onshore investments.
In my mind, Exxon embodies capitalism and maximizing shareholder value since its inception in the mid-1800’s as Standard Oil. However, as the world begins to shift to stakeholder value and climate change effects I believe companies like Exxon will be forced to change. Unfortunately, besides some regulations on emissions from federal and state agencies, such as the EPA, O&G companies do not have a legal responsibility to the environment. The irony is the same system (capitalism) which has propelled Exxon to be the world’s largest public O&G company are now working against it. The price of PV’s has fallen over 70% in the last five years and efficiencies in other renewable energies will keep on competing with Exxon for the foreseeable future. The largest threat will be electric vehicles, yet even with double-digit growth rates EV’s do not pose a material threat in the near term.
What Exxon should do is exactly what you mentioned – take a cue from its peers (BP, Shell, Statoil) and begin to invest in alternative energies and transform into an Energy company.
In general, isolationist policies impede firms from operating at the lowest cost around the globe. For GM, trade restrictions may mean more “onshoring’ but as you rightly mentioned with increasing labor (and likely material) costs, which then get passed to the consumer. Even with greater investment in the US by GM, the increased jobs will not make a material difference in employment given the ~130 million person workforce. I believe more will be lost than gained through these policies and these restrictions will serve to make GM less competitive domestically and globally.
One way firms like GM can insulate themselves from higher labor costs is to keep investing in automation. This tactic, however, detracts from the goal of US policy to create more jobs.
Given the current shortfalls of renewables (intermittency/storage/costs(depending on region)), I believe gas has at a minimum a couple of decades of assured growth. Its prospects are a lot brighter than its liquid cousin. The reason for this is due to the current energy mix and future energy demand. As it stands coal, oil, and gas each constitute approximately 1/3 of the energy consumption worldwide, while nuclear and renewables provide the rest. Coal’s share of the pie will keep shrinking and gas will offset this growth as it is cheaper and a base-load (reliable) form of energy. Most agencies (EIA, IEA, New Energy Finance, BP Outlook 2040) all seem to agree that by 2040 gas will likely have the largest share of energy production worldwide.
I agree that the investment in renewables energy will continue to outpace convention energy; however, even with fast-paced growth rates, it will be a few decades before they can provide even 50% of the energy needed (assuming batteries or intermittency is solved).
I wholeheartedly agree with both of your long-term suggestions for Cheniere. These two strategies should provide them the flexibility needed to provide gas to countries/regions in need.