globalEDGE Blog Archive October 2010

Doug Barry, of the U.S. Commercial Services, recently sat down with Jim Blasingame on “The Small Business Advocate Show” to discuss potential ways to make a small business more competitive in an increasingly global marketplace. The first suggestion that both Mr. Barry and Mr. Blasingame had was to go to one of the 108 offices for the United States Commercial Services to get advice, which is usually free. However, Mr. Barry quickly brought up another alternative that he feels is better: attending trade shows.

What is the first thing that comes to mind when you think fashion? Glamorous shows? A plethora of famous names? How about an international business?

The fashion industry is hard to get into and just as hard to keep up with. Trends are constantly changing which creates the need for extensive research which in the fashion industry is known as fashion forecasting. It is the process of analyzing past buying patterns and using them to make projections about the future. This is what defines the new trend for the season. It is presented to critics and customers in what is the most significant event in the industry - fashion week.

Restaurants providing local and organic foods are growing in popularity as worldwide consumers have responded favorably to sustainable options. Local foods are typically fresher, healthier, and have less of an impact on the environment. As this trend grows in popularity, the newest businesses to join the sustainable food bandwagon are actually in the Hospitality and Travel industry.

The global travel industry has been hit hard by the recent economic downturn. Hotels all over the world have experienced a drop in occupancy rates due to this decline. So renovations and sprucing up rooms seems like it would be last on their priority list now, right? Not necessarily. Some hotel chains have decided that it is worth their investment to improve rooms, lobbies and other facilities to make them more modern and up to date and appealing to travelers.

At a large annual conference of marketing, the words “tweet”, “fans” and “like” were used almost as often as “touch points”, “benchmark” and “prioritize.” Why? The reason for this is rather simple: The importance of social media is expanding considerably in today’s modern business world. Holding its 100th anniversary meeting, the Association of National Advertising discussed marketing gains by companies that are using social media to amplify their brand name and advertise more effectively.

Recently, France has been experiencing protests of epic proportions that have disrupted public transit systems, educational systems, and shortages in necessary commodities such as petroleum. There must be a good reason for an entire country to deal with strikes that are so disruptive, and there is: French President Nicolas Sarkozy has called for the government to raise the legal retirement age from 60 to 62. Who wants to work for two more years before their pension kicks in? That question explains the reason for the strikes, but I feel that it is worth exploring the reasons why the minimum retirement age should be raised.

Discussion about the BRIC countries, Brazil, Russia, India, and China, has become widespread as global trade continues to see growth in the near future. Doug Barry, the Director of Marketing and Communication at the United States Commercial Service was able to emphasize this growth in his article Building with BRICS. These countries are on everyone's radar when looking for potential market growth and investment. They have proved their worth so far in the past couple years and there doesn't seem to be much slow down in the next decade. Now the only question is where to focus the most attention and what actions are being made to ensure we don't miss out on a great opportunity.

Global water usage has exploded in recent years. This has been led by emerging markets demanding increasing amounts of clean water for consumption, and the agriculture industry needing more water to produce the food required to meet their new demand. These two increases in demand combined with the shrinking supply of clean water have led many to predict a water shortage sometime in the future. To fight this problem there are two options: decrease demand or increase supply. The globalEDGE October Newsletter addresses the option of increasing supply while this post will discuss efforts to decrease demand.

So how exactly to you advance from a frontier market to an emerging market? Some people classify frontier markets as a subset of emerging markets, but there is a clear distinction. We’ve talked in previous posts about systematic risk and political instability as huge factors to impeding growth. Once a country can overcome many of these risks, and grow a more stable infrastructure, it is well on its way to becoming a developed economy.

Despite the tendency to think otherwise, it is possible for businesses of any size to have a successful strategy centered on exporting products overseas. While many entrepreneurs and small business owners may believe that they cannot possibly develop a successful international business strategy due to a lack of knowledge about foreign customers, poor foreign language skills, or size constraints, experts in the field of international business would urge them to push those doubts aside. 

As globalEDGE has discussed in the previous posts for this month’s blog series, not only are frontier markets growing extremely fast, they also have a lot of systematic risks. These risks can range from extremely prohibitive government regulations to a communist run government that feels it’s appropriate to expropriate private assets when it deems necessary. To transition to a stable growing economy these countries must remove these risks and increase its population’s education and consumption. These will create sustainable investment opportunities and the increase in consumer spending will continue to fuel economic growth.

As a result of the economic crisis, countries around the world are attacking their own debt problems with austerity measures. A mixture of culture, value systems and tradition play a role in how these measures actually are received by the citizens. Based on the fact that both the U.K. and France have adopted changes in their pension systems, how are these changes being received in the context of each country’s cultural values?

There has been a debate going on for many years, the true value of investing in frontier markets. The results of investing in frontier markets seem inherently leveraged when compared to the results of investing in the more steady paced developed markets. While people with safety as the forefront of their current investment philosophy may not have any desire to invest in these markets, the intelligent investor with the time and knowledge to invest for the long run can benefit greatly from investing in the frontier. I believe that right now is a good time to put money down for the long run in these growing markets.

With all of the talk about how frontier markets are growing so rapidly and returning investors very handsomely, it can be easy to forget about the negative side of these markets. When people hear that they can make a 159% return on their money in 12 months (as Sri Lanka is estimated to do according to Thompson Reuters: Frontier Markets), they tend to overlook the risks that must be taken in order to invest in such a country. This blog post is here to gently remind readers why frontier markets are not yet a standard investing destination yet, and why they are considered a step below emerging markets.

Although somewhat unknown in everyday international business language, a new term is being coined by investors everywhere: Frontier Markets. Most of us have heard of emerging markets, which are known to be very promising markets where investments carry great potential, but are not quite as stable as in developed countries. There are many articles being published about this relatively new category of market investments.  But what are frontier markets? This week’s blog series will not only establish what they are, but also provide some insight into their implications on the future.

In the world today, clean energy sources are becoming more valuable each day with the growing concerns to protect our environment. The energy industry includes many different variations of these renewable energies including: wind power, hydropower, solar power, geothermal power, and biomass power. Nowadays, renewable energy businesses can be found in countries all around the world.

If you watched the news recently, you would have probably noticed a huge event happening in Chile. In case you haven’t heard, 33 miners went to work in the San Jose Mine (used for the mining of raw copper) for what was supposed to be a ten hour shift. The roof of the mine ended up collapsing on them. Fortunately, after spending 69 days underground, all of the miners have been rescued from their earthen prison safe and sound. Now that this saga has finished its final chapter, perhaps the greatest impact experts in the Mining, Minerals, and Metals industry hope it has was best summed up by Alonso Contreras (a cousin of one of the trapped miners): “Hopefully no one ever again has to do anything like this.”

“Never waste a good crisis…” Many politicians have said these words touting the benefits of the hysteria and urgency introduced by difficult situations. When people are under extraordinary pressure or panic, decisions are made quickly and with less resistance than under normal circumstances. In Chile, miners had been trapped a half mile below the surface for 69 days, thanks to a collapse in one of the mining shafts. This has generated news coverage around the world and over 1,000 reporters on the scene to share updates to their audiences. For some, this real-life drama demonstrates the human ability to endure difficult circumstances. For others, this creates a commercial opportunity.

A new provision in Section 815 of the United States Senate’s National Defense Authorization Act is very concerning to businesses competing for large government defense contracts. The defense contractors are focused on loosening provisions that would effectively blacklist global suppliers from being included in government contracts.

The world is continuously changing with new markets, international trade and political movements as well as educational and cultural fluctuations. The only question is where exactly is all this change occurring? A new study by A.T. Kearney has just come out with the Top Global Cities of 2010.

Let’s begin by contrasting two different medical experiences intended to diagnose heartburn: 1) A catheter is inserted into your body through the nasal cavity and left there for several hours while a measure of acidity is taken or 2) You swallow a pill and wait two hours while a measure of acidity is taken. Although the results of these different procedures are the same, the comfort of the patient and skills required to administer the tests vary significantly. Welcome to the age of wireless health!

A new study by Aon Consulting determined that Toronto is the most desirable city in the world for corporations to recruit and hire employees. The research included 90 cities world-wide, and compared cities based on demographics, education, government regulations, and employment practices.

Many small business owners in the United States struggle to successfully export products to global markets. Without expertise in dealing with international markets, it may be challenging to develop a business plan that is well-suited for customers around the world. Doug Barry of the Trade Information Center at the United States Department of Commerce recently interviewed one man who set an example for other small business leaders to follow.

India, being known as a country inclined to new technology, has added yet another innovation to its inventory—a talking newspaper advertisement. When readers opened to the last page of a popular Indian newspaper, a voice began to talk resembling a radio commercial. The source for this surprising advertisement was a light-sensitive, voice activated chip that encouraged readers and listeners alike to buy a new Volkswagen sedan. Weighing only one ounce, this paper-thin chip is a groundbreaking design. This “talking newspaper” can change the way print media is viewed and provides businesses a new way to communicate their messages with customers.

Just two years ago the second worst depression in history hit us. Recently we have started pulling ourselves out of it, albeit slowly. Looking around at the depression’s results, the question is almost begging to be asked, did we learn anything from the first one?

The issue of euro-area governments exceeding standards for allowable debt has led to calls for tighter regulations and sanctions against nations that do not exhibit fiscal responsibility. While it is difficult for a large and diverse organization such as the European Central Bank to reach a consensus on any major policy, recent scares have opened the discussion of proposed regulatory changes.