Focus determines success of business strategy

Tariff war as a phenomenon has done something remarkable. It has forced the headlights on this forgotten factor in formulating business strategy, which is FOCUS. Here is a list of focus centres that determine the success of business strategy especially when navigating against uncertainty:

1. Do not show that you are retreating at the outset but exhibit a trend of re-thinking, re-aligning using delaying tactics.

2. Shift the onus of response for an eventuality either upon opponent or his allies. Here you are good cop and enemy and his allies become badass.

3. Remain calm throughout the pendency of challenge mounted by the enemy without coming out openly and fight him head-on like what the bulls do. Instead use your own narrative in a subtle and subdued manner such that you forecast a message befitting an adult in the room to him and his allies that your primary enemy uses force & power as his base concept in fighting you unjustly.

4. In intense business warfare you concede little here and there without harming your strategic focus of bringing him to his senses. Remember any forceful counter measure generally turns out to be counter-productive where the buyers of your products have the chance of shifting alliances.

5. Navigating against uncertainty requires a paramount vector: Diversify your trading partners in three grades; viz: large medium and low volumes of order. For example, if you face stiffer competition from your opponent in the high-end product line concentrate on medium & low-end to compensate for loss of revenue derived from the high-end market.

6. When the enemy tries to isolate you do not fall prey to his business manoeuvre. Isolation is something you can easily get into but difficult to get out if such isolation persists for quite some time. By any chance, if you see this threat, then encourages the opponent to open few more fronts similar to you to fight on along with you. The idea is to tire him out of competing with you alone as he has to face multitude of other firms.

7. If your opponent is bent upon the concept of “forcing trading partners to choose one against the other” do not fall onto this trap. As far as it is feasible fund & support your allies and his enemies to continue countering his onslaught.

8. When your enemy escalates and get you to fight him in business warfare, which he has unleashed do not defy him neither surrenders to him. Instead motivate and encourage partners & associates to understand his posture and wean them away from him towards your side fostering fear in their psyche that once you are clobbered the opponent would add them for his next slaughter one by one.

9. Where the enemy’s hand is stronger an you have weak hand the best business manoeuvre, is give in momentarily or extend him partial success in outsmarting you for the time being. As and when the intensity of business warfare wanes you go for his jugular and finish him once and for all.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

Ursula von der Leyen must leave now

Strategically speaking, the President of European Commission, Ursula von der Leyen has messed up EU-China relationship during the recent meet up with Chinese bigwigs including Xi Jinping President, Prime Minister Li Qiang and Foreign Minister Wang Yi. Here is my rationale:

The President of the European Commission, Ursula von der Leyen, and the President of the European Council, António Costa, took part in EU-China Summit in 25^th July that incidentally marked the 50th anniversary of establishment of diplomatic relations between the Union and China. Moreover, it is the 25th consecutive annual parley between China and EU. What kind of diplomacy emerged during their travel?  Obviously the commission members expected diplomatic protocol of lavish travel arrangements. What they got was the entire team being herded into a bus, something the EU would have never imagined.

Secondly, when the EU raised concerns of Chinese support for Russia they were expecting a submissive and perhaps apologetic reply from China. What came out, shocked them. Chinese gave it back in their characteristic style, In so many words of politeness that is none of EU’s business.

Next point that was hugely contentious is the balancing of trade volume which at present stands deficit to the tune of € 309 Billion towards the Commission. When the EU team took up for discussion the ever chanting complaint of Chinese overcapacity not only it failed to budge the Chinese negotiators but highlighted the stark truth of European incompetence in manufacturing where the finished cost is almost twice the amount of Chinese products.

Two more criticism levelled at China by the EU team met with once again nonchalance from the Chinese side. These two related to supply chain domineering by China and restrictions imposed on the export of Rare Earth Elements.

Earlier the EU imposed 45% tariff on the import of Chinese Electric cars into 27 member countries of the EU. Chinese side was not even bothered to discuss this matter as they were right to point out that China commands less than 10% of the EV demand in EU.

Finally when Ursula was speaking about democracy and minority rights Foreign Minister Wang Yi was visibly angry and irritated shot back stating China does not interfere in the domestic affairs of EU countries and expect the Commission to reciprocate that stance. The culmination that demolished RU was the decision made by President Xi Jinping to cut short the meet between EU and China, a diplomatic slap on the face of EU as a whole.

Confronting hard truths is not in the psyche of the EU Commission and their stirrings just fell on the way side. The bottom line was very clear. China is now a superpower militarily, economically, diplomatically and also as a moral bastion of the global south.

What is needed now is that EU has to over-haul her business strategy navigating prevailing geoeconomics situation. That demands this arrogant lady Ursula von der Leyen be axed from the Presidency of EU Commission ASAP.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

NATO 5% of GDP pledge for defence, does Europe stands to benefit?

A lot of noise is generated as regards to the NATO pledge to allocate 5% of the GDP for defense purposes. Whether the members of EU can afford to do this is another matter. What is important is whether Europe stands to benefit from this move or it is simply grandstanding.

While navigating strategy amid geoeconomics, I found that Europe as a whole does not stand a chance to get any boon but only bane. True enough, few countries would benefit such as France at the expense of the weaklings. Yet overall there is no tangible benefit, despite this pledge being illogical.

The stats are terribly arraigned against this move. For example, the EU's total GDP in constant prices is € 3,575 Billion. Five percent of it works out as € 178.75 Billion. Defense expenditure incurred by member states is estimated as € 326 Billion, much above the threshold of the called for pledge.

Now let me turn to the arms exports profile of the EU. The main suppliers of arms & ammunition from Europe are France, Germany Italy, UK and Spain. France tops the list in Europe as global supplier of military related items at 9.6% of the global demand. Germany comes second at 5.6%, Italy follows suit at 4.8%. Then comes UK at 3.6% trailed closely by Spain which accounts for 3.0%. Roughly EU as a whole account for nearly 24% of the global supply of military stuff leaving out UK which left the European Union few years ago.

The sticking point is Europe as a whole is not self-sufficient in manufacturing arms and ammunition for her domestic use. EU relies on USA to cover the deficiency. For example, US exports of military hardware & software to Europe is around 30% of the continent’s requirements. This 30% is just the surface scratching it one finds that there is an added item known as dual-purpose exports from US to Europe around 8.5%. Put it other way, Europe depends on America much more for her military needs than it is shown.

So on paper it appears that the NATO pledge is sound but in practice it is just superficial. The unescapable fact is that USA being the largest supplier of global arms requirements at 43%. Therefore, US is going to be the net beneficiary because EU would not be able to absorb the increased defense allocation for her needs. The elephant in the room is not America though. China controls the supply chain as regards to the Rare Earth Elements which is sine quo non for manufacturing most arms and ammunition that EU turns out. Hence, Europe befriend China for her military profile.

The catch 22 situation faced by EU is summarised as: either imports more from USA or cut her own exports of arms to the globe in order to implement the NATO pledge. Either of the business strategy is bound to fail in the long run. Trust saner counsel prevails in EU and a viable strategy is worked out

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist