Best Laid Plans
Last week we looked at the growing trend of protectionism that many countries are practicing now or are contemplating by either increasing tariffs on foreign-made goods or restricting their use entirely. Here in the U.S. we are witnessing an object lesson that shows that it is much easier to think up and enact protectionist legislation than it is to deal with the consequences. Consequences the lawmakers don’t have the expertise to consider or even imagine.
In February 2009, the U.S. Congress, as part of its Economic Stimulus Program, imposed "Buy American" provisions which bar projects from receiving federal money that buy goods or materials from abroad. The theory is that this will help U.S. businesses. In reality it has created a distributional and logistical nightmare and now has the U.S. in a polite and relatively minor dispute with our largest trading partner and very good neighbor to the North-Canada. Many products in a variety of the industries use dozens of components. Many of these are manufactured in Canada. So a company using or manufacturing products or systems that have one or two Canadian-made parts may lose or be disqualified from receiving federal contracts due to the Buy American program. Also, many products, in the process of being finished have components passing back and forth across our border with Canada. So how is it calculated if these are Made in the USA or not? Many U.S. companies are saying their businesses are suffering huge potential losses (of contracts) due to the Buy American program. They cannot change the complex and highly integrated supply chain systems already in place with Canada. This could affect over 4 billion dollars worth of business in the water and wastewater systems industries alone.
Plus these types of sanctions always provoke retaliatory measures. China has announced it will curb imports of chicken and auto parts to combat the tire tariff. President Obama and Canadian Prime Minister Harper have to sit down and work through such important issues as charter flights for sports teams. If you are a hockey or baseball fan, this is serious business.
For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.
9/22/09
9/15/09
Thought Of The Week
Market Alert: Protectionism on the Rise.
International marketers need to watch the current trend of protectionist tariffs that are increasing around the world and coming to a head just before the Group of 20Summit in Pittsburgh, September 24-25.
While no one disputes the need for global expansion and the tremendous lift and leverage it can give any company’s bottom line, trend-spotting and the proper strategic positioning that responds to these trends are critical.
The major headline here has been the tariff the U.S. government is placing upon Chinese automobile tires and China’s reaction of taking this issue before the WTO. The proposed tariff increase of 25%-35% could price out of the market 17% of all tires sold in the U.S. China says this could affect 100,000 Chinese jobs. The price of rubber on world commodity markets and share prices in certain tire companies has already been affected.
U.S. companies are coming under increasing pressure from their unions and labor forces to stem the flow of products flooding into the market from China and elsewhere. The U.S. government meanwhile is walking a tightrope as the Chinese and U.S. economies are so tightly intertwined now. China will be watching very carefully how the Obama Administration reacts as this could set the tone for the remainder of Obama's term.
It may be a hackneyed phrase but “tip of the iceberg” seems appropriate when looking at the global protectionist trend. There is much more to follow. GTA’s research indicates over 100 protectionist measures are due to be implemented around the world. Countries being targeted the most by these measures are China, U.S., Japan, Germany and France. The leading industries seeking protection are machinery, food, financial services, and agricultural goods.
If your products/services may be affected by this, it is time to pay close attention.
For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.
International marketers need to watch the current trend of protectionist tariffs that are increasing around the world and coming to a head just before the Group of 20Summit in Pittsburgh, September 24-25.
While no one disputes the need for global expansion and the tremendous lift and leverage it can give any company’s bottom line, trend-spotting and the proper strategic positioning that responds to these trends are critical.
The major headline here has been the tariff the U.S. government is placing upon Chinese automobile tires and China’s reaction of taking this issue before the WTO. The proposed tariff increase of 25%-35% could price out of the market 17% of all tires sold in the U.S. China says this could affect 100,000 Chinese jobs. The price of rubber on world commodity markets and share prices in certain tire companies has already been affected.
U.S. companies are coming under increasing pressure from their unions and labor forces to stem the flow of products flooding into the market from China and elsewhere. The U.S. government meanwhile is walking a tightrope as the Chinese and U.S. economies are so tightly intertwined now. China will be watching very carefully how the Obama Administration reacts as this could set the tone for the remainder of Obama's term.
It may be a hackneyed phrase but “tip of the iceberg” seems appropriate when looking at the global protectionist trend. There is much more to follow. GTA’s research indicates over 100 protectionist measures are due to be implemented around the world. Countries being targeted the most by these measures are China, U.S., Japan, Germany and France. The leading industries seeking protection are machinery, food, financial services, and agricultural goods.
If your products/services may be affected by this, it is time to pay close attention.
For more information on this, international marketing logistics, regulations, market entry strategies, please contact doug@focus-worldwide.com.
9/3/09
Thought Of The Week
China Marketing Update
General Motors announced yesterday that it expects its sales in China to increase by 40% this year. Ford sales have doubled in a year. And many luxury goods manufacturers and consumer goods companies are seeing that China is not as affected by the global recession as other countries.
That’s good news for manufacturers and marketers. At the same time, great strides are underway to create, enhance and improve B2B and B2C databases in China. We at Focus Worldwide are working on just such a project right now. So many factors are lining up favorably to provide greater access to, and response from, the Chinese consumer marketplace.
But like all international marketing endeavors, the road is bumpy, seldom straight and smooth. Those whose nervous systems require tranquility and few surprises beware. International marketing can be hazardous to your health.
China announced earlier this year that it is enacting greater privacy restrictions as it pertains to the access, release and use of personal data. Personal data can be defined as national ID number, mobile telephone number, email address and residential address. So B2C direct mail may need to be addressed to “Occupant.” B2B direct marketing has no such restrictions.
There may also be restrictions on the printing of direct marketing materials that have China as a final destination.
Anyone doing business in China would be advised to check with their experts there.
For more information on international data and analytical solutions, contact me at doug@focus-worldwide.com.
General Motors announced yesterday that it expects its sales in China to increase by 40% this year. Ford sales have doubled in a year. And many luxury goods manufacturers and consumer goods companies are seeing that China is not as affected by the global recession as other countries.
That’s good news for manufacturers and marketers. At the same time, great strides are underway to create, enhance and improve B2B and B2C databases in China. We at Focus Worldwide are working on just such a project right now. So many factors are lining up favorably to provide greater access to, and response from, the Chinese consumer marketplace.
But like all international marketing endeavors, the road is bumpy, seldom straight and smooth. Those whose nervous systems require tranquility and few surprises beware. International marketing can be hazardous to your health.
China announced earlier this year that it is enacting greater privacy restrictions as it pertains to the access, release and use of personal data. Personal data can be defined as national ID number, mobile telephone number, email address and residential address. So B2C direct mail may need to be addressed to “Occupant.” B2B direct marketing has no such restrictions.
There may also be restrictions on the printing of direct marketing materials that have China as a final destination.
Anyone doing business in China would be advised to check with their experts there.
For more information on international data and analytical solutions, contact me at doug@focus-worldwide.com.
8/26/09
Thought Of The Week
While working on a project in Mexico this week, I was reminded of the great cultural differences that exist between there and the U.S. Not just those that affect consumers and their buying preferences but the business culture as well and how one must adapt to how partners, vendors and suppliers go about their business everyday.
Cultural bias affects us all. Those who think they have no bias are in denial. The challenge for each of us is how to confront our own bias, determine how it affects our business relationships in other countries and then try and tame it. I don’t say eliminate it. That’s delusional. All we can do, realistically, is recognize we each have it and try and mitigate how it affects us. Everyone is different and bias is intensely personal.
In my classes at NYU before I began each semester, I gave my students bias tests just to show them, in a humorous way, how we are all affected by it and just how ingrained it is. It can be influenced by personal experience but often is more generational as how people act in a culture and how they are perceived by others changes over time. My students’ biases were not mine as there was a generation gap between us. But theirs were just as inaccurate and misleading as mine. Some things never change.
To succeed in international marketing each of us has to recognize and control our bias demons. If you are interested in testing yourself, drop me a line and I’ll send some self-tests. In a week or two I’ll post these on our website. It’s fun and doesn’t hurt! Not much anyway. My e-mail is: doug@focus-worldwide.com
Cultural bias affects us all. Those who think they have no bias are in denial. The challenge for each of us is how to confront our own bias, determine how it affects our business relationships in other countries and then try and tame it. I don’t say eliminate it. That’s delusional. All we can do, realistically, is recognize we each have it and try and mitigate how it affects us. Everyone is different and bias is intensely personal.
In my classes at NYU before I began each semester, I gave my students bias tests just to show them, in a humorous way, how we are all affected by it and just how ingrained it is. It can be influenced by personal experience but often is more generational as how people act in a culture and how they are perceived by others changes over time. My students’ biases were not mine as there was a generation gap between us. But theirs were just as inaccurate and misleading as mine. Some things never change.
To succeed in international marketing each of us has to recognize and control our bias demons. If you are interested in testing yourself, drop me a line and I’ll send some self-tests. In a week or two I’ll post these on our website. It’s fun and doesn’t hurt! Not much anyway. My e-mail is: doug@focus-worldwide.com
8/24/09
Point Systems
Following up last week's "Thought" about the French being French. Now the Brits are acting...well..very British. Let’s examine the highly protective UK environment where legislation may soon be enacted not to keep just things or institutions more British, but the actual people. "The Plan" is to tighten the requirements for citizenship by assigning a point system that all the undesirable foreign types invading the shores of the Mother country would have to score to reach the goal of British-hood. Points would be added for things like having talents that provide positive contributions to British life, being really good at football, owning Harrods, or not killing anyone for at least 5 years. Deductions would be taken for breaking the law, being anti-social (meaning not being very good at football), displaying disregard for British values, or for questioning why celebrities like Elton John receive knighthoods. OK. Some of these are my additions but I think they are good ones.
The fact that the UK would even consider such a point system is indicative of the national culture just as what the French do to try to preserve their institutions is very French. But this UK Plan may send the wrong message although I sympathize with many of the factors that have led to this rather extreme step.
Here in the U.S. I question whether every citizen really should have the right to vote. I know this sounds incendiary but if people are totally ignorant of the people and issues, on what basis are they deciding who to vote for? I don’t worry about the foreign born who have become citizens as they had to pass a Citizenship test that proves they understand issues and how our government works. I’m concerned with the native born idiots. And if this group becomes the majority of the voting public (I think it is getting there), then the candidates will become even more evasive about their stance of the issues and just run either a popularity contest or a mud-slinging negative campaign against their opponents. Neither serves our voters nor our institutions. And this ignorance crosses all social, ethnic, racial and religious lines. The uninformed are everywhere. And their voting decisions can affect us all in a very negative way. So let’s have at least a very elementary point system to determine if someone should be granted that priceless gift of being able to make an informed decision and vote. Our Founding Fathers didn’t think the average person had the brains to make informed decisions and that’s why we had Electors and the Electoral College. Maybe they were on to something.
Read entire article
The fact that the UK would even consider such a point system is indicative of the national culture just as what the French do to try to preserve their institutions is very French. But this UK Plan may send the wrong message although I sympathize with many of the factors that have led to this rather extreme step.
Here in the U.S. I question whether every citizen really should have the right to vote. I know this sounds incendiary but if people are totally ignorant of the people and issues, on what basis are they deciding who to vote for? I don’t worry about the foreign born who have become citizens as they had to pass a Citizenship test that proves they understand issues and how our government works. I’m concerned with the native born idiots. And if this group becomes the majority of the voting public (I think it is getting there), then the candidates will become even more evasive about their stance of the issues and just run either a popularity contest or a mud-slinging negative campaign against their opponents. Neither serves our voters nor our institutions. And this ignorance crosses all social, ethnic, racial and religious lines. The uninformed are everywhere. And their voting decisions can affect us all in a very negative way. So let’s have at least a very elementary point system to determine if someone should be granted that priceless gift of being able to make an informed decision and vote. Our Founding Fathers didn’t think the average person had the brains to make informed decisions and that’s why we had Electors and the Electoral College. Maybe they were on to something.
Read entire article
8/14/09
Thought Of The Week
More Support for Global Expansion.
Front page of today's (August 14, 2009) Wall Street Journal has a story on how Wal-Mart is adapting its strategy globally after failing initially. This article is directly under another saying that the EU, Asia and India are all recovering from the recession ahead of the U.S. The U.S. remains mired in consumer no-confidence due to continued job losses, tight credit and a weak housing market.
Back to Wal-Mart. What have they learned that we all eagerly wish to hear? That you can’t force ideas germinated in Bentonville, Arkansas USA on the rest of the world. Who would have thunk it? I’m shocked. The “one size fits all approach” is being scrapped in favor of adapting to local tastes. Even local infrastructures where things like chronic traffic congestion in many foreign cities make the vast big-box store model inefficient are influencing local retail marketing adaptations.
Why does Wal-Mart bother? Well, Wal-Mart and most other uber-corporations recognize that flaccid domestic sales need a dose of Viagra they can only get from expanding globally. While Wal-Mart’s U.S. sales declined 1.2% in 2nd Q 2009, overseas sales increased 11.5% and profits rose 13%. Wal-Mart has 1,300 stores in 14 countries overseas and estimates it will be spending an additional 5.3 billion dollars on foreign expansion this fiscal year..
They have found that strategies from the U.S. don’t often transplant overseas but strategies developed overseas often can be transplanted into other foreign markets. Interesting!
Front page of today's (August 14, 2009) Wall Street Journal has a story on how Wal-Mart is adapting its strategy globally after failing initially. This article is directly under another saying that the EU, Asia and India are all recovering from the recession ahead of the U.S. The U.S. remains mired in consumer no-confidence due to continued job losses, tight credit and a weak housing market.
Back to Wal-Mart. What have they learned that we all eagerly wish to hear? That you can’t force ideas germinated in Bentonville, Arkansas USA on the rest of the world. Who would have thunk it? I’m shocked. The “one size fits all approach” is being scrapped in favor of adapting to local tastes. Even local infrastructures where things like chronic traffic congestion in many foreign cities make the vast big-box store model inefficient are influencing local retail marketing adaptations.
Why does Wal-Mart bother? Well, Wal-Mart and most other uber-corporations recognize that flaccid domestic sales need a dose of Viagra they can only get from expanding globally. While Wal-Mart’s U.S. sales declined 1.2% in 2nd Q 2009, overseas sales increased 11.5% and profits rose 13%. Wal-Mart has 1,300 stores in 14 countries overseas and estimates it will be spending an additional 5.3 billion dollars on foreign expansion this fiscal year..
They have found that strategies from the U.S. don’t often transplant overseas but strategies developed overseas often can be transplanted into other foreign markets. Interesting!
8/6/09
Going Biblical
“I have been a stranger in a strange land.” I don’t think I fit in, in America, anymore. I am nearly positive that I am the only guy who hasn’t reaped mega-bucks through some form of scam, stock fraud or Ponzi scheme. OK maybe I’m exaggerating. But I am convinced that I’m the only guy who doesn’t qualify for a mortgage bailout because I didn’t buy a house I couldn’t afford or borrow so much money against the equity in my home that now I owe more than the house is worth.
Quiz time! What does it mean that a company is too big to fail? For decades America have been strong-arming the WTO and World Bank into forcing the American economic model upon hapless countries that were quite happy and prosperous with their own systems. And the fundamental tenet was a free market system. Well, in that system, competition reigns. The weak and inefficient give way to the strong and innovative. So let AIG, GM, Chrysler, monster banks and others fail. It’s what they deserve for obscene CEO payouts and only looking ahead 3 months to the next quarterly report. Let them fail! It’s the American way. Subsidizing these companies with government tax revenues and nationalizing banks. Why that’s un-American. It’s downright European!!!
Big companies are not that important to the economic health of America. The backbone of America has always been and will always be small companies, small farmers, small business owners. 99% of America’s +27 million companies have fewer than 500 employees. For the past decade small businesses have generated 60-80% of net new jobs and produce 13 times more patents per employee than large companies.
Read entire article
Quiz time! What does it mean that a company is too big to fail? For decades America have been strong-arming the WTO and World Bank into forcing the American economic model upon hapless countries that were quite happy and prosperous with their own systems. And the fundamental tenet was a free market system. Well, in that system, competition reigns. The weak and inefficient give way to the strong and innovative. So let AIG, GM, Chrysler, monster banks and others fail. It’s what they deserve for obscene CEO payouts and only looking ahead 3 months to the next quarterly report. Let them fail! It’s the American way. Subsidizing these companies with government tax revenues and nationalizing banks. Why that’s un-American. It’s downright European!!!
Big companies are not that important to the economic health of America. The backbone of America has always been and will always be small companies, small farmers, small business owners. 99% of America’s +27 million companies have fewer than 500 employees. For the past decade small businesses have generated 60-80% of net new jobs and produce 13 times more patents per employee than large companies.
Read entire article
Subscribe to:
Posts (Atom)
