Uncertainty to opportunity

We are at Kenzo Estate in beautiful Napa Valley where the food comes from all over the planet—a perfect setting to discuss globalization, tax reform and other changes happening in our world right now.   

William Lovallo

William Lovallo

Partner, Financial Due Diligence, KPMG US

+1 973-912-4864
Brett Weaver

Brett Weaver

Partner, International Tax, KPMG US

+1 206-913-6697

Video transcript

Brett Weaver: 
Tax reform on its face is great for most companies in the US but on the flip side it's really just a chapter in this bigger novel about what’s happening around global trade.

Joie Chen: Why did we choose Kenzo Estate for this meal? Well, it’s not only one of the most beautiful vineyards in Napa Valley. The food on our table today, it’s come from all over the globe. This really does go to the heart of globalization, tax reform, and the kinds of change that are happening in our world now.

Bill Lovallo: If you look at how the food got here, global trade and tax pretty much affects everybody, everywhere. Every time you move something across a border, you interject tariffs and regulation into that process.

Brett Weaver: We are moving into a post-globalism era. The point is the uncertainty and how do you react to that?

Terry Howerton: Yes, we focus most of our attention on some of the entrepreneurial class and innovation which today is in every corner of the world.

Laura Behrens Wu: I think what we are seeing is that it is easier than ever to start a business. All of these infrastructure pieces are readily available. You’re able to just innovate and adapt so much faster.

Joie Chen: So, when you have big changes in tax code, that can actually lead to bold opportunity.

Brett Weaver: Yes, absolutely. I would suggest looking at supply chain. If you had greater visibility into your supply chain, you can meet some of those customer demands but you also then have visibility in how you can flex the supply chain in a changing global environment.

Laura Behrens Wu: Supply chain is front and center. At Shippo, we’ve seen that with more visibility, companies can also adapt and keep cutting away inefficiencies and then increase customer expectations.

Terry Howerton: Large corporations can extract value from building smarter partnerships with a supply chain that they otherwise wouldn’t have access to.

Bill Lovallo: One of the inevitable consequences is acquisition. It’s an easy way for companies to grow. It is 18 months most of the time from when you shake someone’s hand until the time that they are thinking about allowing you to buy from them.

Laura Behrens Wu: We can’t wait 18 months to have revenue coming in. It has forced us in a good way to do business with small to mid-sized stores that are more adaptable.

Terry Howerton: So, it is not necessarily traditional acquisitions. Too many large companies really focus still on earnings. They are hesitant to spend that capital on R&D. Part of our focus at TechNexus is helping them figure out how to leverage that balance sheet into inventing your future for your business.

Brett Weaver: There will continue to be this faster and faster pace around the adoption of technologies that can really create a competitive advantage. Those are the things that, strategically, companies should focus on.

Terry Howerton: Seventy percent of the Fortune 1000 that were on the list a decade ago, aren’t on the list today because they just can’t adapt.

Joie Chen: And, so how do you keep companies from disappearing?

Brett Weaver: Invest. Start to think about your supply chain and just how you do business around the globe.

Bill Lovallo: At KPMG, we’ve had to turn our deal business on its side in order to be able to meet the needs of our clients which have changing very quickly. Strategy, analytics, and speed, which gave them competitive advantage at auction and that is what this is about.