Archive for the ‘Week 5’ Category

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Blog 5: Egypt government struggles to finance itself

February 8, 2011

Due Date: February 8, 2011

Article Sourcehttp://www.bbc.co.uk/news/business-12384276

Article Date: February 7, 2011

Article Title: Egypt government struggles to finance itself

Summary:

Recently the Egyptian Government has had to close down banks and the stock market; and put limits on withdrawals due to the consequences of the upheaval in Egypt. Many investors in the Egyptian stock market have withdrawn and the American dollar has risen 2.3% against the Egyptian euro after the protests started. Along with this speculations have risen about the Mubarak estate and estimates that they have a fortune of up to $70 billion.

Reflection:

Company’s should be very aware of all the financial ups and downs that Egypt is going through and how it will impact their business in Egypt. Any business who deals with Egypt or whose supply chain passes through Egypt will be impacted by the fact that their economy is very unstable. In addition, consumer spending will be at a low because of the withdrawal limit from banks. This can also impact businesses who are relying on the banks in Egypt to finance day to day operations. Companies will have to be looking at the overall picture and the overall economic situation in Egypt when moving forward. Not only do companies have to deal with the banks putting limits on withdrawals and the downfall of the stock market and the Egyptian euro; but they also have the continuing protests from the Egyptians that will continue to impact business. All in all, companies may see higher gas prices, standstill business in Egypt, and reduced spending. These may all lead companies to rethink their trade with Egypt, the flow of imports and exports, and supply and demand.

Going above and beyond the current effects on business, companies will have to look to how this will impact them in the future and what they will need to adjust. Companies may need to do additional environmental scanning in order to adjust to the shifts that are happening. They may also have to consider how these changes will impact their strategic plans, goals, and mission and vision. Finally, companies should consider what they can do to help ease things in Egypt and be socially responsible.

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