learn enough of the local language to apologise for NOT speaking it

my mother should be able to understand your vision, and mission statements

The Chinese yuan is under fire from the United States and its allied world economists.

Brilliant men and women with doctorates have decided that China’s trade imbalance will get so large that the only way to control it is to let the yuan become stronger. The logic works like this:

For example, if 10 yuan equals $1, and we force the yuan to strengthen (for example, eight yuan would equal $1). Thus, an American’s dollars will purchase less yuan. A Chinese-made DVD that may cost 200 yuan could have been bought with $20. But at eight yuan to the dollar, the cost is $25.

This supposedly would make Chinese goods more expensive in the U.S. market, and give U.S. firms a chance to compete.

The converse is also true. In this model, it now only takes eight yuan to buy a dollar. So if a U.S. apple costs $1, it used to take 10 Yuan to purchase it, but now would take only eight.

This logic is flawed in so many ways.

People may remember that the same scheme was tried with Japan in the 1980s. At 260 yen to the dollar, the world pushed Japan to revalue the currency, to get close to about 100 Yen to each dollar. This made Japanese goods far more expensive in the United States.

Guess what happened? The trade deficit with Japan increased. American consumers wanted Japanese products. And if they had to pay more for them, so be it.

If U.S. drivers were sold on buying a Honda, then they still wanted that Honda. If it was $1,500 more expensive, they paid it. Interestingly, many

U.S. firms were sourcing their production to Japan. “American” products such as RCA TVs went up in price as well. And since almost all of the U.S.-made autos were half-Japanese (due to parts), those costs went up.

The converse happened, but not as the economists predicted. While American-grown apples and other consumer goods were suddenly cheaper in
Japan, the Japanese didn’t buy more of them. Japanese consumers saw the drop in U.S.-priced goods as a lowering of quality. The trade deficit with Japan got larger, not smaller.

Incidentally, Japanese consumers and businesses are notorious in their desire to have high Japanese content in their product. Didn’t anyone understand the market?

If everyone bought everything on price alone, we would all be driving Yugos. BMW wouldn’t be able to sell a single car. There would be no imported wine, Saks Fifth Avenue and Nordstrom would close, and Motel 6 would be the only acceptable place to spend a night.

There are exceptions, of course. If one is in the blind commodity businesses — such as oil, yarn, grain, cotton or salt — then price sensitivity is key, as these items are purchased by the shipload. Differences in pennies per kilo can make or break a business.

Notice how beef and other meat products aren’t on the above list? That’s because it’s easier to add value to beef and meat products.
And to a large degree, we can differentiate corn, soybeans and other common commodities by financing options, inventory control, customer service, better delivery, a more well-connected sales force, more streamlined operations and local investment in markets, to name a few.
The average CEO can prepare for currency fluctuations, and hedge their business strategies so they’re not consumed by those changes.

When buying from overseas, savvy purchasers need to hedge on long-term buys.

Buyers can establish local offshore bank accounts to protect against short-term currency risks. They can execute long-term purchasing agreements with set pricing.

International marketers should not rely on selling to just one country.

When offshoring production, it doesn’t make sense to do manufacturing at just one site. If political or financial problems develop, you’re out of business.

Planners have to be ready for China, India, Poland, Thailand and Greece. More connect points lessens the risk of any one country damaging you.
Strong relationships with factories as well as clients are essential. If the yuan, yen or bhatt changes, this should be seen as a shared problem, with solutions to come from both sides.

Of course in international marketing, CEOs really needed to learn to market their products abroad. Using price sensitivity as the sole qualifier of success is simply incorrect. Only a true understanding of the customer’s needs and motivations will lead us to the truth.

A strong investment in the relationship will pay dividends when the price has to change.

Don’t compare business to Football. It’s more like Ice Hockey. The puck is constantly in motion

This week’s one liner,
Posted by our Road Scholar

” your perfect partner: your reciprocal.”

This is this week’s one liner, posted by our Road Scholar.

How to choose right executive for overseas work

The Denver Business Journal - May 25, 2007
by Bill Decker

In organizations, doing international business often is considered a perk.
It’s perceived as exciting and even sexy to go to meetings in Paris, check out suppliers in India, negotiate with partners in Brussels and source talent in Milan. Many times, young employees enter a firm hoping to get into international business.
For those of us who actually engage in these activities, we know it can be laborious, destructive to personal and family life, time-consuming, tiring and often a health risk.

But when a company needs its executives to engage in international businesses dealings, how do they pick that employee? What criteria should be used to assess executives before asking them to conquer a market or engage a supplier?

The corporate practices of yesteryear are no longer valid.

Historically, corporations have staffed incorrectly, which helps to explain why the United States’ failure rate overseas is the world’s highest.
Selections used to focus largely on technical criteria. Firms used to think that technical success here would guarantee it abroad. It’s the typical thinking: If it worked here, it will work anywhere. This simply isn’t true.

International posts often are staffed in response to an immediate need: “We’re buying a firm in China; who will staff it?” The proper way to handle that situation would be to constantly garner and train international staff, so that when an acquisition or market entry is finalized, the firm has the personnel to deal with it.

Because international business has the caché, executives often were picked for political reasons. Bob may be the CEO’s golf buddy, but that doesn’t mean Bob can deal with Bulgaria.

Once companies chose their executives, they often compounded the error by pressuring the executive to accept, or “bribing” the executive with even more perks, such as “hardship pay” — large expense accounts or promises of future raises and promotions. The possibility for failure increases because these decisions were made in a vacuum, without expert advice, and they’re coupled with inexperienced assessors.
In looking for an international business executive, it helps to take the following into account:

First, there must be a high trust factor. We’re speaking of two types of trust: integrity and competence.
The executive serves as the eyes and ears of the corporation abroad, and could place the firm in very delicate situations, such as revealing corporate secrets, taking bribes or using the business to further his own career.

The second type of trust refers to competence. Just as the employee is the firm’s eyes and ears, they’re also the market’s eyes and ears back at headquarters.

When she imparts market intelligence, it must be acknowledged and acted on.
 Language ability always helps. Can your executive speak the language? If he can’t, can he learn? Does he possess any language skills?
 Cultural insight is essential, whether they already have it or are willing to learn it.

If Charlie is busy in operations back home, and you add Budapest, then you aren’t taking the new responsibilities seriously. Charlie must be ready to face the new challenges of the task at hand, and can’t be overcommitted.

 Hunger for the new assignment goes a long way. Once you’re trying to persuade an executive to deal with India, you’ve already lost the battle. Passion for the new challenges, desire to analyze and succeed in new opportunities, and a willingness to work hard go a long way toward getting the job done.

 Commitment to the new work also is essential. When you hear an executive building fall-back strategies and demanding guarantees about what happens to their career when they return from the assignment, then move to another candidate. For once an individual gets into the international circuit, there’s no turning back. The adventure is just beginning.

Tolerance, flexibility and acceptance are qualities the successful international executive possesses. Tolerance in religious, political, personal and cultural beliefs and rituals must be exercised. Tolerance for different business techniques, foreign foods and unusual demands placed by the host country must be ingrained in anyone who wishes to succeed abroad.

When we do business, we make assumptions: what a win is, how to communicate, ethics, society and more. When we travel, we find that many of our assumptions don’t hold true abroad. When an executive is being trained, they should discuss their assumptions, and be willing to examine and embrace other ways of thinking.

When international expatriates were interviewed, the No. 1 response they gave for success abroad was the ability to fail. Once we allow ourselves to fail, we allow ourselves to realize we can’t control everything.

The right gut feeling is key. International executives should feel at peace with the assignment, and the firm should feel at peace with the person.

Remember: If you feel that sending them is a risk in any way, it probably is.

In the USA “yes” means “I agree with you.” However, in Asia, “yes” may mean “I’ve heard you.”

” When measuring markets, we need to understand which industries are being discussed. The Cheese market in Greece (7 million people) is larger than China’s (1.3 billion) .

This is this week’s one liner, posted by our Road Scholar.