The RAP and PG&E: The battle of initialisms

This commentary in the WSJ (Nov. 2019) describes how the incentives PG&E faces => rolling blackouts instead of investments designed to reduce the risk of fire. 

Kodak's failed attempt to decentralize

The post and link describe Kodak's struggle to increase innovation. Some of the blame falls on a decentralized decisions not coupled with strong incentives.

This article in the WSJ (Nov. 2019) illustrates the importance of focus. Trying to do everything => do nothing well. It also illustrates that entry => lower profits.

Will AI => Centralization?

This article in the WSJ (Nov. 2019) discusses the role that AI may have in increasing or decreasing centralization.

Is this Use of AI great or scary?

The WSJ reports that Google has teamed with Ascension to analyse personal health data for millions of people across 21 states without obtaining consent or even informing the patients. The (partial) goal is noble: "Google in this case is using the data, in part, to design new software, underpinned by advanced artificial intelligence and machine learning, that zeroes in on individual patients to suggest changes to their care." The report also states that "the Health Insurance Portability and Accountability Act of 1996, generally allows hospitals to share data with business partners without telling patients, as long as the information is used 'only to help the covered entity carry out its health care functions.'” 

How Google auctions ads

A link to a nice video.

Take a peek under Google's hood

This article in the WSJ describes how Google built its "ad machine". 

Buzz words or reality at McDonald's

The WSJ reports (Nov. 2019) that the new CEO at McDonald's is now responsible for implementing the strategy he helped craft. "[E]xecutives say [the strategy] will provide a competitive advantage over time."  The article mentions that CEOs usually have operational experience. Here are two questions.

1. Does the article describe the activities on which McDonald's will focus to create a competitive advantage?
2. Could lack of operational experience increase the ability to craft a strategy?

Will economies of scope drive more mergers in the automobile industry?

The WSJ reports that the goal of the proposed merger of Fiat Chrysler and Peugeot is to increase profit. My question is, why would the merger => more profit. I see two alternatives. One way that a merger might increase profit is the merger's impact on the 5-forces. The combined market share of the two firms might gives them more bargaining power over buyers and sellers; it could reduce rivalry within the industry and it could make entry more difficult. The second way that a merger might increase profit is because the larger firm is able to take advantage of economies of scope. The article reports some evidence that economies of scope may be important.

"But Sergio Marchionne, the legendary Fiat Chrysler chief who died last year, was a persistent advocate for deeper consolidation. He drafted a 25-page manifesto in 2015 imploring the industry to share the costs of developing parts most customers never notice, such as engines in small cars.

“'It’s duplicative, does not deliver real value to consumers and is pure economic waste," the report said."

The previous mega-merger that was supposed to herald major changes in the structure of the industry was between Daimler and Chrysler two decades ago. That merger did not end well.