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Blog 7: Ivory Coast rush to withdraw bank cash

February 17, 2011

Article title: Ivory Coast rush to withdraw bank cash

Article date: February 16, 2011

Article link: http://www.bbc.co.uk/news/business-12478846

Due Date: February 17, 2011

Summary:

Long lines are forming around the fourth closed bank in the Ivory Coast as it has been weeks since people have been able to cash a check or withdraw money. President Gbago still refuses to step down and tensions have been rising which has led to many bans and protests against the regime. The Ivory Coast exports a third of the world’s cocoa and prices are at an all time high because the cocoa exporters have stopped registering beans as a result of sanctions and a ban against the regime.

Reflection:
The closing of banks in the Ivory Coast and in the area will ultimately impact the economy. This means that spending will be down and if people pay with a check businesses may be unable to get the money that they need from the checks. With more and more banks closing the slowdown will be inevitable and will lead to more economic instability along with the unrest against the regime. Businesses who are in any way connected to the Ivory Coast whether having their business abroad or have their supply chain connected to that area will have to be especially sensitive and savvy about the issues going on. In addition, to dealing with the economic stability of the country, businesses will have to consider the rising prices of goods that were going to be exported out of the country but are now stopping because of the ban on the regime. Also it said in the article that businesses were banning other businesses that supported the regime which means that a business owner may now not be able to get certain items on time because of the ban. On the other hand, they would also have to consider that if they continue to trade with a business that supports the regime then they may encounter issues with the businesses who were banning that business.

This news article relates especially to businesses that deal with cocoa at all as their supply may need to come from other countries as the cocoa exporters of the Ivory Coast are protesting. This means higher costs as businesses try to adjust and as cocoa prices continue to rise. This is why we must always consider alternatives that may arise because of different factors in the environment (natural, political, etc).  For example, Tropicana has a supplier in Brazil who is able to get them the oranges they need if there is a hurricane or another natural disaster in Florida.

In conclusion, this article means that the unrest that started in Egypt is starting to grow in other countries as well which will most likely impact any businesses that deals or trades throughout that region or who has any ties whatsoever to that area. Even if a business is not directly or indirectly tied to the area they may still feel the impacts of higher export prices, trade barriers, banks closing, low consumer spending, etc.

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Blog 6

February 15, 2011

Golden ticket

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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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Blog 4: Proposal for cyber war rules of engagement.

February 3, 2011

Due Date: February 3, 2011

Article Sourcehttp://news.bbc.co.uk/2/hi/programmes/newsnight/9386445.stm

Article Date: February 3, 2011

Article Title: Proposal for cyber war rules of engagement

Summary:

Cyber security has become a big issue in recent times and because of this the US and Russia are pushing the topic forward, to where it has now become a topic on the Munich Security Conference for the first time. With Egypt taking advantage of cyber world to send pro-government messages to China blocking certain website it has become an international issue that they hope to see make on to the Geneva Council. Many have said that “cyber war” is just hype but there have been documented daily cyber incidents and has been seen in the recent cyber attacks on the Stock Exchanges in Britain and the US.

Reflection:

With any rules or regulations come repercussions for businesses which means that they should be keeping track of any progress made in regards to cyber security and how it will impact their business either for better or for worse. Companies may have to implement new programs in order to obligate with any cyber security laws that might come into place. This  means higher cyber security for companies which is good but takes up their two most valuable resources: time and money. In addition, this might make it harder for businesses whose products or services are sold primarily through the internet. This means that if a certain customer is unable to access their website because of security there could be problems (not exactly sure if this is accurate as I am not a technological expert). Companies should definitely be involved in the issue of cyber security because of how it might affect their business transactions, communication between overseas subsidiaries, and just getting their product transferred through countries quickly. Higher security could work as a trade barrier because of the longer process that would analyze security risks. These are all situations that would most likely come out of the cyber security rules. One major benefit is that companies do not have their business taken over by hackers or just being used inappropriately. All in all though companies should be aware of the barriers that could be raised and how it will impact the supply chain or other business transactions.

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Blog 3: Huge Protests Fan Egypt Unrest

February 1, 2011

Due Date: February 1, 2011

Article Sourcehttp://www.bbc.co.uk/news/business-12235625

Article Date: February 1, 2011

Article Title: Huge Protests Fan Egypt Unrest

Summary:

Protests in Egypt have been growing over the past few days and protestors are hoping to grow to over 1 million people. They want to see President Hoshni Mubarak 30-year’s reign come to an end. President Mubarak has said that the army will not use force against the protestors. The growing unrest has already caused a cutoff of the internet and text messaging services and it is estimated that throughout the country there has been 300 fatalities.

Reflection:

International businesses need to be very aware of the movement in Egypt so as not to offend neither the government nor the protesters. For example, if there ships are docked in Egypt they need to be aware of the unrest and make sure to be sensitive while in Egypt. Businesses already located in Egypt will have to be careful not to anger the crowd as it can lead to property damage and perhaps closure of business. Businesses whose supply channels come from Egypt or who are somehow tied to Egypt will have to understand the nature of political unrest so that they do not push too hard on suppliers who in turn push hard on those in Egypt who cannot do anything about the political unrest. Often times political situations can cause problems such as boycotts or other trade barriers that businesses must be aware. Businesses will have to be alert about this unrest so they can adjust their trade patterns, such as imports and exports, correctly to adjust to the political environment factors. Being alert can keep them from offending the country and also so that if a new leader is elected they are able to adjust if to how it will affect them. For example, if they are manufacturing in Egypt and a new leader is elected they will need to know if wages are changing or if they have to pay different taxes, etc. Additionally, if a new leader is elected and Egypt makes changes it is important for businesses who are looking for new opportunities so that they can take into consideration the political environment factors and if this will become an emerging country or not. Finally, it is important for businesses to keep in mind these political environment factors because it will help them understand where the culture and economic system may be headed.  Depending on the leader in power and the stability of the country, there may be improvements or degradation in the country. One final point: the whole political atmosphere will impact any US business because of the whole Middle Eastern situation/tension and our dependency on oil.

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Blog 2: Urgent Action Needed to Avert Global Hunger

January 25, 2011

Due Date: January 25, 2011

Article Sourcehttp://www.bbc.co.uk/news/business-12235625

Article Date: January 24, 2011

Article Title:  Report: Urgent action needed to avert global hunger

Summary:

In a two-year study, it has been found that many countries’ current system will fail if they do not bring up their food production by about 40 percent, water by 30 percent, and energy by 50 percent within the next twenty years. If they do not address these problems food prices and global hunger will continue to rise as it is predicted that in the next 20 years 65-70% of  the possible 8.3 billion people on the globe will be living in cities (therefore they will not be contributing to agriculture). According to experts, it will be necessary to face the reality in the political world so that countries can begin to help address world hunger, such as improving technology and enabling countries to increase food production.

Reflection:

This report/article means that industrialized countries’ trade deficit will increase and become even more reliant on other countries. Businesses who deal with agriculture ought to strategically plan for this and try to help improve food production rates. If they do not look ahead twenty years or so (what this study has planned for) then they will not be able to adjust properly for the supply and demand changes to come. A learning company should be able to adjust what they are doing in order to keep a steady flow of supply (for example, making sure to rotate crops). In addition, they should consider devoting more of there research and development towards this so that they can provide 40% more food by the end of the twenty years.

Other businesses who are not involved with agriculture may be affected because of the possible change in consumer spending habits if we are unable to change our reliance on other countries for food, energy, etc. This means that any company should keep this in consideration when they create strategic plans. Also, companies should understand the gravity of the situation and perhaps devote some of their philanthropic efforts towards making long term changes in agriculture and helping reduce world hunger.

Companies may have the ability to lead the way so that others will start thinking about the many aspects of this issue: global hunger, reliance on others, and the trade deficit increase that may happen.

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Blog 1: China’s Economy grew 10.3% in 2010

January 20, 2011

 

Due Date: January 20, 2011

Article Source: http://www.bbc.co.uk/news/business-12235625

Article Date: January 20, 2011

Article Title: China’s Economy grew 10.3% in 2010

Summary:

China has been taking many efforts to curb inflation and has seen some of the inflation pressure go down from 5.1% to 4.6%. They were able to accomplish this by raising loan interest rates twice in the past four months; in addition the Yuan strengthened .8% versus the dollar. Finally, with these measures and others in place they were able to see a GDP growth rate of 10.3%.

Reflection:

China has become a major source of income for companies as more and more companies outsource their production to China. This increase in GDP and the reduction in inflation should allow companies to produce products in China for better prices and it allows those who sell overseas to not have as much inflation costs. Also, having a slightly stronger Yuan allows basically anyone who trades with China, produces in China, or has stores in China to benefit so they do not lose as much when changing it back into the dollar. There is also a downside to the international business aspects of this. First, with China raising its loan rates it will cause the U.S. to pay even more as most of our debt comes from China. A lot of international business is related to China and therefore it is better for them to grow even if it includes higher loan rates. Another benefit of having lower inflation in China is that it may allow the consumers to be more at ease. This means that there may be fewer strikes against companies and possibly fewer protests or political unrest. All of this means that companies will be able to keep their employees working and not have to deal with the issues that can arise from their plants (ethical, financial, etc). Finally, it is important for companies that the economy is able to rebalance quickly and smoothly so that they are able to keep their factories running and making a profit without having to move to other countries. It is key to this rebalancing act is that there is increases in consumption over and above the total growth rate. This means that companies will have to be thinking about these two items and how their manufacturing, etc will affect them.