Point72 Hirevue questions/Answers

  1. Company A sells paper coffee cups to all Costa Coffee locations in the UK. Company B sells dinner plates to all Nandos in the UK. Company A charges $1 for a pack of 100 cups and Company B charges $3 for 1 dinner plate. Tell us exactly what information you would need to determine whether Company A or Company B has higher annual revenue and explain how you would calculate these two figures.

  2. What is one industry you think will be gone in 15 years? Answer the question using the following guidelines:
    -Identify at least one company in this industry and explain why their business will not succeed over time
    -How will consumers of this product/service evolve
    -How will the competitive landscape evolve and in what time frame
    -What, if anything, could the industry do to prevent becoming obsolete?

These are the questions for the Point72 Hirevue. What could be some good answers for these?

 

Do you know when were supposed to here back after completing the hirevue? Did you receive other assessments to complete besides the hirevue?

 

Do you know when were supposed to here back after completing the hirevue? Did you receive other assessments to complete besides the hirevue?

 

1.) Seems incredibly straightforward to the point I feel like it is too simple and I’m reading it wrong

2.) Coal industry - Murray Energy - Won’t succeed because world is becoming environmentally conscious and there are cleaner substitutes for energy such as natural gas, wind and solar power. Energy mix is dominated by these substitutes - consumers are evolving by moving to cleaner fuel/energy solutions (mentioned above). - Industries competitive landscape will have to evolve into separate industry. Possible solution could be mining minerals/metals as the industries are similar and PP&E could overlap creating cost saving synergies. - Industry is hopeless as it has headwinds from US government regulations, major banks avoiding all coal investments, and consumer sentiment is anti-coal.

 

Yeah I just don’t know how one would think out of the box about gross revenue. Revenue = units sold x price so record how many packs of cups and how many dinner plates were sold and multiply by respective prices. Company A will have to sell 300x as many cups as Company B sells plates based off sales price per unit but you don’t need to know that to calculate revenue?

 

The crude oil industry – as in exploration and production? No chance.

Sure, there have been/will be a number of E&P bankruptcies due to current market conditions – oversupply and significantly limited demand – but crude oil isn't going anywhere in 15 years. It's definitely a dying industry, but we will still need jet fuel for at least 15 years.

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To number 2, the Dairy Industry, it's already failing and becoming obsolete, and nothing can or should be done to stop this. An example company may be Dairylea. Consumers will realise and are realising that they can get milk from other sources such as plant-based milks (that are more environmentally friendly, better for health, and cause no harm to animals) . Over a course of 5-10 years, many companies will close, and many will evolve to provide their own plant-based milks where possible.

 

I'd say the number of people eating the cheese and yogurt, and chocolate alternatives has certainly increased massively - even beyond vegans. Take for example Lindt and Galaxy, who have both recently released plant-based alternatives, Morrisons supermarket in UK has this year released plant-based cheese, and Flora (butter) has change ALL products to be plant-based. Beside these examples, with the number of people being aware of animal rights, so too is veganism (as people see an alternative exists without the issues- for example 2019 Veganuary had 250,000 join, and 2020 had 400,000). Not to mention with the climate crisis being irreversible by 2050 (Many say 2030 - 10 years away), the emissions of Dairy Cows (when alternatives exist) is not sustainable - may even lead to governments realizing huge dairy/meat subsidies are a bad idea (especially since the Covid Outbreak, see here: https://www.fwi.co.uk/business/markets-and-trends/dairy-markets/pressur… ). And, as the demand exponentially grows, so too do companies' plant-based efforts, creating better quality, cheaper plant-based options. In the next 15 years, i really think there'll be huge changes.

 
Most Helpful

That's the beauty of the second question. Some think Industry X will be fine, others think it will be gone. There's no right or wrong answer, it's about your thought process. Some of them are value stocks, others are value traps.

What could they do? Sometimes the easiest answer is to invest in or acquire an emerging technology company to hedge yourself. For example, Tyson foods started a plant based meat brand recently.

SAM started a seltzer brand Truly, which is crushing beer. Look at SAM stock. Nobody thinks beer will be gone in a few years, but it's done growing in the US.

 

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