Thomas C. Cranberry IV
o This article shows one of the biggest trade-offs of entering the Chinese market – the ability to reach one of the largest consumer bases, but in a country where the government has significant power to affect industry. Lotte is in a particularly bad position as they do not have as much retaliatory power as a larger, multinational company or a company in a larger global economy would have to prevent China from taking these measures. In that way, one alternative solution could be trying to get the involvement of the South Korean and/or US governments in combatting these measures. Lotte may not have the size or lobbying expertise to do this effectively, but China’s reactions to the South Korean military exercise could have a significant impact on the broader South Korean economy, not just Lotte. Because of the economic impact, South Korea could begin to rethink specific military moves. This likely causes concerns with the US government as South Korea serves a strategic role in the US military’s operations. With that, the US government should be incented to support companies, like Lotte, that are facing retaliatory measures from the Chinese government. These actions are likely more long-term though and in the meantime, Lotte should to embed itself more in the Chinese economy as the author described.
I agree with MC that media exposure describing the implications of a restructured deal would likely be ineffective. Any media strategy would have to be sure that the lobbyists have already received favorable reactions from the current administration. Because the message to maintain this agreement would likely be targeted toward the lower income Republican base, it would be immediately counteracted by any counter-messaging by the administration. Furthermore, throughout the campaign the Iran deal was commonly associated with negative language, so it would be difficult for Boeing to overcome that consistent messaging. Additionally, the populace is often more able to sympathize for the loss of American jobs for products purchased by America, rather than products being sold to other countries, least of all one that is not an ally (which is a whole other challenge to combating isolationist tendencies). For these reasons, I think the best strategy is to rely on the lobbyists in Washington to get the job done, however, the outlook does not look good based on the administration’s current view of the Iran deal.
I think the biggest burden for change sits with government institutions and large private corporations. As Cissy mentioned, the industry does not seem to be feeling the pains of the drought they are causing. With this, growers are not incentivized to change as their near-term prospects are not put in jeopardy. To make the change required, the government either needs to set regulations as they likely have the biggest incentive to reduce the economic impact of rising temperatures. By setting certain standards for water retention or use, the government could force organizations like Famoso to make more significant investments in curbing the effect of their operations. Otherwise, unless Famoso begins to see that the demand cannot be met by the current grower’s supply, which does not seem to be evident, they will likely not make the investments required.
While I agree with Shooter that private corporations are not incentivized to make the changes required to develop responsible supply chain practices (they just source somewhere else), governments may be able to drive the change required. For a country like the DRC, I imagine the investment of mining companies in their natural resources is critical to the country’s economy and growth. If mining companies continue to pull out of the country, then the government could be forced by its constituents to raise industry standards and develop new regulations. While this may be an optimistic view for the chaotic DRC political situation, if investment in the country is halted industry-wide it could result in more sustainable supply chain practices.
I am not entirely surprised by the fact that the current digital supply chain for the US Navy is ineffective. The government has to balance the tradeoff between control and innovation, while minimizing disruption to the current processes. While I am not concerned about the consolidation of the systems from a cyberattack perspective – I think the innovation likely helps create a more robust system – my major concern was that the USN is working with the Naval Warfare Systems Command to develop the system, rather than partnering with a private corporation. While security clearances would be an issue in a public/private partnership, the Navy could likely get a more state of the art, secure system. There are companies that specialize in developing large, secure ERP (enterprise resource planning) systems that I can’t help but think would be more prepared to take on the challenges than a government organization. A partnership like this could also help reduce the timeline for the system’s launch and provide assurance that the technology has been effective in the past (both when launched and when ‘attacked’).
I absolutely agree with the author that the digitization of the food label is not nearly enough to drive different behavior by Big Food. The blockchain technology is a step toward the right direction, however, as Justine mentioned in her comment, I think this is still inherently difficult to understand as a consumer as there is just too much information to sort through. It is helpful from an accountability perspective as Big Food will have to think more deeply about their supplier selection knowing consumers have such easy access. Nevertheless, I think the biggest competitive advantage that this initiative could drive would be from a cost perspective. Big Food likely spends significant amounts of money on ensuring their products are approved by the FDA. Through the creation of the blockchain database, Big Food could significantly reduce the administrative burden of the FDA’s auditing process and shift or reduce the resources related to regulatory compliance.