Once upon a time, many years ago, the traditional wisdom was that war was good for business. In today?s increasingly global economy, however, this saying is for the most part outdated and downright fool hearty. Particularly if you have -- or are considering -- expanding your business overseas, or have extensive holdings in foreign companies either through investments or direct partnerships, the current conflicts going on all over the world ? and in the Middle East in particular ? have the potential to negatively impact your profits, if they haven?t already done so. Regardless of who is right or wrong in the various wars going on around the globe ? or where you personally stand on the issues behind them ? it is impossible to ignore their potential impact on your ability to profit from your international business ventures. Even if you have no holdings or business anywhere near a war zone, the potential for negative impact is still very real.
There really is no way to completely insulate your overseas business or investments from the negative impacts caused by war ? any more than you can completely protect your own home from the damage that can be caused by a flood or a hurricane. The simple fact is that as you have no control over geopolitical events and conflicts, you are in many ways at their mercy. However, by identifying those things that can be potentially damaging to your business and taking steps to guard against them, it is possible to significantly limit your damage, and decrease your business? exposure.
A quick trip to the local gas station will show you perhaps the most readily visible impact these wars are having. In the United States, as we all know, gas prices have risen dramatically in the last 12 months ? but the increases you see at your local gas station are nothing compared to the increases that have been seen in some parts of Europe, Asia and Australia. In Europe in particular ? where petrol has traditionally been more expensive than it is in the United States ? the effects are particularly ominous. Substantially higher gas and ? with winter just around the corner ? heating costs means less disposable income in the hands of the citizens which, in turn, will very likely mean a slowing in some segments of the economy. True, the same can certainly be said for the US economy as well, but it is important to remember that the United States has a higher per capita income than most European nations, and so the economic impact of higher oil prices will, in all likelihood, hit them harder. While quality generally has always ? and in the long run probably will always ? be more important to the average European customer than price, in the short term price is very likely to become a major issue in many of the European markets. Remaining aware of and updated on general consumer buying trends in the specific nations you are doing business in is a critical indicator for what direction you may be required to take your business in that country.
Another impact the wars around the globe can have on your business revolves around the political climate that exists in the country where you are doing business or have invested. As a quick look at CNN will likely point out, all the world does not share the United States? views on international matters ? particularly wars. Particularly in Asia, South America, and some parts of Eastern Europe it is important to keep a close eye on the stands that the various governments are taking on the various wars, and remain very aware of any dramatic growth in anti-American Governmental sentiment. While certainly large segments of the governments of the European Union nations agree with US policies, it is also important to make certain that you understand how the people in the nations you are doing business in feel ? as this is quite likely to be the same way that your partners there feel. Any major shift in feelings about the US as a whole by the population of a nation where you are doing business can dramatically effect the way you will need to conduct your business there.
As I write this article, all carry on luggage and liquids have been banned on all domestic and European flights from the United States, and Airline security stands at an unprecedented level of high alert. In the United States, it is suggested that you arrive at the airport four hours early for any overseas flight. The days when your travel time overseas could be combined with productive work time via your laptop and satellite internet connection are over for now and, while these restrictions are sure to be removed at some point, they will almost equally surely come back again. The simple fact is, international travel is becoming increasingly time consuming, inconvenient, unproductive and, in some cases, dangerous. Sad to say terrorism ? and the threat of terrorist attacks particularly on Americans abroad ? is a very real concern. Where it was once both practical and economical ? and even a perk ? to have your senior people travel to overseas operations, this is no longer always the case. Time, money, and peace of mind can be saved by either installing or upgrading computer networking platforms with your overseas offices and/or partners so that the majority of your business with them can take place via the internet. In the future, there is every reason to believe that the occasional trip to Rome, or London, or Paris will go back to being a ?perk? for your top performers. However, until the world situation stabilizes again, in most cases your people?s productive time can be better used at home rather than sitting for hours in an airport or on a plane.
There is nothing good about war, but history has taught us that wars always end ? and the current conflicts raging around the globe will end as well. They can best be viewed ? from a business standpoint at any rate ? as a tragic inconvenience that needs to be analyzed, and then dealt with. By watching how trends change on a weekly ? if not day by day ? basis in the nations you are doing business with, as well having a finger on the pulse of the feelings of both the governments and the people of these areas, you will have the information you need to make informed decisions and limit your business? exposure. You do not have the ability to change the various geopolitical paradigms that account for wars, but you do have the ability to protect your business from the damage that those wars can cause!
Short note about the author
Steve McLaughlin is available for consultation and can be contacted directly by Email: smclaughlin@gmi.lu or Phone: 352-26364921. Additional information is located on his website: http://www.gmi.lu.
Author: Stephen McLaughlin