TOM Student 2017
I definitely agree with you that climate change is not an issue that Nespresso can solve on its own. That said, I like your suggestion to partner with other interested parties to solve the problem. I wonder, however, if rather than partnering with competitors in the coffee space, Nespresso would be better off partnering with companies in complementary industries.
Peanuts, for example, are another product category where yields are highly dependent on stable temperatures . Growers, therefore, are facing the very real, near-term risk that climate change will make their supply “scarce” by 2030 .
It could be beneficial for Nespresso to partner with a big player in the nut industry for several reasons. One, it could increase the overall amount of R&D investment poured into developing a breakthrough farming innovation. Two, it could broaden the funnel for innovation ideas, with growers from more than one industry identifying potential solutions. Three, it could allow Nespresso to be the sole first mover in their industry any new breakthrough technology developing, giving them a substantial competitive advantage in reward for their investment.
 Michon Scott, “Climate and Peanut Butter,” National Oceanic and Atmospheric Administration, Climate.gov, November 1, 2012, [URL], accessed November 14, 2017
 National Climate Assessment and Development Advisory Committee, “National Climate Assessment Report Draft,” U.S. Global Change Research Program, January 2014 [URL], accessed November 14, 2017
It’s 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 . 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.
 David Allais, “Automation in the Warehouse: Asset or Obstacle?” Industry Week, July 13, 2017, [URL], accessed November 2017.
To me, this case raises an interesting strategic question for Unilever’s 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’s 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, “”We cannot predict the consequences on the economy and subsequent impact on our operations in the UK” . Moreover, Unilever executives hesitated to really rally their employees to vote against Brexit. A note to employees said, for example, “It is not for us to suggest how people might vote… but… we feel a responsibility to point out that Unilever would…, in our considered opinion, be negatively impacted” .
Given the significant impact of Brexit on Unilever, I believe executives should have been more proactive and forceful in these public statements.
 “Unilever bosses say firm ‘would be hit by Brexit’,” BBC News, June 16, 2016, [http://www.bbc.com/news/business-36544875], accessed November 2017.
I think it’s interesting how you keyed in on the fact that increased trade restrictions could slow down H&M’s 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’s main value props is not only that they’re fast, but also that they’re 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% . 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?
 “U.S. Department of Commerce Issues Affirmative Preliminary Antidumping Duty Determination on Aluminum Foil from the People’s Republic of China,” 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’s interesting to me that Walmart is giving its suppliers access to the Data Café. 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’s 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’t need Walmart to provide data access or infrastructure.
Thanks for sharing. It’s 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’s annual sales have been as high as ~$1B, i.e., they are a meaningful revenue contribution for Kraft . If Kraft therefore believes the National Climate Change Assessment that peanuts will truly be “scarce” 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.
 Nielsen Panel, xAOC, 52 weeks ending 2011.