I think natural gas exports will be prioritized by the US government during NAFTA renegotiation talks, as the industry brings considerable trade surplus with Mexico. Additionally, US natural gas might be the best option for Mexico, as existing infrastructure and proximity to the US proves to be more cost efficient than other current alternatives. In the case of NAFTA breakdown, it is possible for both US and Mexico to engage in a trade war, yet it is highly unlikely for Mexico to impose a tariff on natural gas, as demand for energy is growing at a steady pace and a shock in natural gas price will cause a ripple effect through the economy (increase in inflation). Furthermore, Mexico’s natural gas production is declining at a rate of 10 percent this past year alone, which signifies the importance of gas imports for Mexico. Although unlikely, it is important for the US to not initiate any actions that could result in retaliatory actions by Mexico, as tariffs imposed to the industry will likely hurt US gas industry as it will substantially decrease demand and prices.
The Center of Automotive Research concludes that “any move by the United States to withdraw from NAFTA or to otherwise restrict automotive vehicle parts and components trade within North America will result in higher costs to producers, lower returns for investors, fewer choices for consumers, and a less competitive U.S. automotive and supplier industry”. Broadly speaking, free trade agreements should be beneficial to all parties involved since it promotes countries to recognize and maximize their competitive advantage, where the market allocates industries across countries in order to take advantage the resources each country brings. As a result, companies benefit from lower costs of production, which could trickle down to customers in the form of lower prices. Yes, jobs may be lost in a specific industry, however “for each of those jobs lost, the economy gains roughly $450,000 in the form of higher productivity and lower consumer prices”.
I agree wholeheartedly that Ford should focus on the long-term instead of short-term gains, yet Ford’s latest move is understandable because any large investment in new factories at this point (in mexico or USA) is inherently very risky due to uncertain near-future trade policies. As such, Ford’s decision to maximize profits on its existing factories is a ‘wait-and-see’ move until the long-term feasibility of a new investment is certain.
The cheapest form of RFID tag, passive RFID costs around 10 cents USD, which means that annual additional costs amounts to ~US$10 billion (with the assumption of 100 billion products sold in convenience stores per year). Additionally, considerable amount of capital investment is required to install RFID readers in-store (around US$10,000-20,000 per checkout kiosk).
However, I believe that the implementation of RFID system in-store has significant potential to bring immediate value to companies. The most crucial advantage is that convenience stores will be able to associate specific purchases to individuals and track individual user behavior in-store. Through RFID usage, stores may be able to utilize specific data to create personalized promotions through online medium such as email newsletter. Additionally, stores can install a more advanced version of RFID tracker which could analyze the movement of goods and customers in-store, which can bring insight to specific products’ placement in-store to maximize basket size of each customer. All in all, implementation of RFID may be costly, but it also brings potentially game-changing advantages in the industry.
It is true that there is a significant issue in whether electric vehicle (EV) is truly “green”, in that it does not solve the problem of fossil-fuel usage but rather shifts it to centralized power plants. However, studies have shown that compared to diesel cars, EVs still generate less GHG no matter how dirty the national grid looks like. In the EU, it is estimated that an EV is expected to produce 55% less CO2 compared to an equivalent diesel-powered vehicle. The study further shows that even in countries that still relies heavily on non-renewable electricity production such as Poland, EVs would produce 25% less CO2. Although EVs does not provide a 100% reduction in GHG generation, it is a step forward towards a better future, and serves as an interim solution before the world reaches fully renewable electricity generation.
Tropical and sub-tropical climate is ideal for coffee cultivation. As such, coffee cultivation is a significant part of Indonesia’s economy and its contribution to the world (the word ‘Java’ comes from Indonesia’s island of Java). In 2016-2017, Indonesia is the 4th largest coffee producer and exporter in the world, with 90% of farms owned and operated by small-scale farmers (2-5 acres of farm area). Hence, for these farmers, it needs to make sense economically to implement sustainability programs such as C.A.F.E. and it may not be viable for Starbucks to launch a hands-on educational program due to sheer number of farmers. Fortunately, other big companies such as McDonald’s, Keurig, Nespresso and Walmart have made commitments in the sustainable sourcing of coffee. This movement by big companies shifts the majority of demand to sustainable coffee, which pressured farmers to follow the trend or risk losing revenue. Ultimately, Starbuck’s best pathway in ensuring sustainable coffee is by partnering with other major companies to shift demand, as the market will signal to farmers that the era of unsustainable coffee is at its end.
I think it would be very difficult for GameStop (at least when its traditional brick-and-mortar video game retail business is concerned) to fight back against the tide of digitization, as per the increasing trend towards digital as you described. However, GameStop reports 2% increase of same-store sales this quarter, coupled with a very high 9% dividend yield. But, this 2% increase can be attributed to the increase in console and new software sales, which are least profitable for GameStop.
I believe there is little reason for customers to specifically prefer physical over digital copy of video games. In fact, many of today’s newest physical releases does not include discs at all inside the boxes; they only include a piece of paper with download code printed. At this point, there are two possible solutions to this problem. One is to invest heavily on its own .com channel and to provide better deals than its competitors, coupled with special editions and bonus in-game items. Another solution would be to focus its retail locations on video game arts and collectibles as Ryan described, which can only be obtained physically. Specifically, GameStop can form strategic partnership with game publishers to create and obtain exclusive distribution rights for collector’s edition video game titles (which often includes physical boxes, statues and artbooks).