American Sino Mania leads to geoeconomics power struggle

Uncertainty in global trade and investment environment got a shot in the arm when Donald Trump started the sanctions game. Tools of macroeconomics were used by him to intensify business warfare between China & US. This transformed the seemingly innocuous trade dispute into much more potent geoeconomics power struggle.

Nobody can deny that economics is interwoven with politics and military. In fact anyone who has cursory glance would realize that politics, economics and military are the key verticals in any meaningful strategy. Wars are fought for political reasons that are in turn prodded on by economic imperative.  By the same token, war by other means also involves the uses and sometimes abuses of economic power.

While acceding to the fact that economic security of a nation must be sacrosanct and by no means could be compromised at any time, it also behoves on national leaders that a proper balance between and amongst politics, economics and military, the so called PEM, should be maintained. 

Extending this further into international relationship, rules and procedures must be developed and accepted by all the nations in the United Nations Organization. Instituting such rules in trade & investment policy and procedures as a code of conduct by every nation must be sine quo non. Of course, there is a caveat as whatever policies and procedures there are it is the market that is final arbiter and market forces of demand and supply indeed determine price and quantity of goods transacted.

The moment a particular country, for example US turns into zero-sum game stance, by placing sanctions over trade, finance and investment it not only negates the spirit of partnership, but brings forth further strain on partners in the wake of imposing such sanctions. Plainly put, sanctions are counterproductive to the essence as victim nations are emboldened and make every effort to become still stronger as in the case of Iran. For China this was a god-sent opportunity for shedding the legendary Deng Xiaoping counsel of caution and begins to face up with America as an equal challenger in geoeconomics! 

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Never let anyone know what you are thinking

 Sounds commonplace stuff! Yet this is not what an ordinary man said. It was Michael Corleone the Don of the family declared while discussing plans to take on the enemies known as the Five Families who are tough competitors in the Mafia world.

In crafting business strategy what the company must hide forever is the real intention of the company in facing business competition. Michael Corleone explains this a bit more: “Conceal your intention by never revealing the true purpose of your action”.  Here lies the triangular form of facing off with your opponents: deception, concealment and objective.

A key template is deception that is built in such manner everything appears normal from outside, yet things are getting crystalized for a frontal attack on the opponent in business competition. Google does this in its own inimical style. Recently there is lot of talk and attempt by bringing Pixel by Google to the forefront. As an electronic Telco device Pixel phone has many features that iPhone or Samsung also have. Where it differs is that it can function using both Chrome based laptop and mobiles with androids. A feature that is still not integrated in many of the products currently in the market.

The real purpose of the promotion of Pixel has not been known to the wider public. Concealment of the real purpose is camouflaged in such way none can penetrate to the inner workings of the Pixel affair. The calculation of google is changing from an instrument of mobile nature to an instrument of dual purpose with the ability to combine both laptop and android in one go.  

The point is, integrating mobile phone fully with a desk top software that too configured on the Google Chrome means that real purpose is not the phone but to market Google Chrome as the staple for internet uses. Plainly put, Google wants to be the top running horse for search engine in desk top, lap top and android mobile too. This business strategy can succeed only when the triangular lines of deception, concealment and objective are dotted.

And Google is too smart that it never lets anyone know what it is thinking. What about you folks!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Why BRI is the game changer in geoeconomics?

China plays her cards well, as BRI has so far rolled out to 138 countries with a staggering US$ 200 billion by way of investment. By 2030 China would have invested humongous amount of US$ 1.5 Trillion, a feat that makes all what US has doled out under Marshall Plan to pale out into insignificance. Thus, BRI has secured unassailable position for China in geoeconomics. 

Deep pockets are with China now more than US, which has only the printing machine that spews out fiat currency notes without internal backing for its purchasing power. In contrast, China guards her Yuan and deliberately keeps it undervalued thereby allowing US Dollar to be overvalued. 

Real value of US Dollar is on steep decline. To exacerbate China has a cash reserve of more than 3 trillion US$ whose major part of it, say, 1.25 trillion is parked in the US Treasuries.  Hence US is caught on catch 22 position where she has to safeguard the value of the US$ in the international market and at the same time avoid any chance of sovereign default. Consequently, US manoeuvring in monetary economics is severely restricted.

Then China did something unthinkable. She did not use the massive dollar resources to fund China Dream domestically. She came out with a checkmate plan in her business strategy. She invented the hen that lays the golden egg that is road and bridge initiative, BRI for short. Predictably, China did not want to import the US Dollar inflation into the country if she starts spending dollar reserves domestically necessitating printing more yuan to absorb the liquidity.

Conceivably, BRI fits the overall business strategy of making China major player in the field of geoeconomics next only to US. BRI format serves twin purposes: 

Firstly, China brings prosperity to the host country which needs whale of a lot of dollars that could be used to generate employment and consequent enhancement in production of goods and services.

Secondly, the economic growth in host country is back channelled to China by way of imports of goods from China as well as payment for services rendered in terms of construction of infra-structure and other facilities inside host country.

BRI does something great by affording a big place for China in geoeconomics. Plainly put, BRI allows China having a weighted say in the host country’s domestic affairs and international relations. The overall result is that US now finds itself in a loser’s place with fewer countries toeing her line in the Anti-China narrative!

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

Business negotiation a la Don Corleone

When Vito Corleone ascends the throne as “Don”, he is not arrogating himself with power; yet power smoothly follows to him from the way he articulates and the way he negotiates with friends and foes. 

In contrast with what Mao Tse Tung has famously said “power grows out of the barrel of the gun”, Don Corleone adopts milder business negotiation style packed with real sense of power. Here is an example!

Amerigo Bonasera is an undertaker and log time acquaintance of Don Corleone yet is unwilling to show allegiance to the Don due to his fear that he would be branded as a capo of Corleone family. One day he finds his daughter Maria brutally beaten by his boyfriend and his gang for refusing to have sex with them.  Her pitiful condition was aggravated by the fact that the perpetrators escaped from being punished by courts duly, due to their wealthy background. Incidentally, Don Corleone’s wife Carmela has previously become godmother to Maria.

Bonasera reaches out to Don Corleone on daughter’s wedding day of the Don and pleads for help from him and in the course of conversation offers him financial incentives to do justice for his stricken daughter. Don Corleone understands the perspectives of the situation and skilfully navigates in his business communication, saying:

“Bonasera!  Bonasera! What I have done to make you treat me so disrespectfully? If you’d come to me in friendship this scum who ruined your daughter would be suffering the very day.

And if by any chance any honest man like yourself made enemies they would become my enemies. And then they would fear you.

Some day and that day may never come, I will call upon you to do a service for me. Until that day accept this justice as a gift on my daughter’s wedding day”. 

Hearing this, Bonasera accepts Vito Corleone as Don and displays fealty to him. Immediately afterwards, the criminals involved in this case were given the treatment similar to what they have done to Maria and the case was closed forever. In long term Bonasera has become a great admirer and lover of Don Corleone! 

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Business warfare: Five lessons from Crusades

The Medieval Crusades were fought between 1095 till 1271 AD in intermittent manner. In all, nine such Crusades took place. Except for the First Crusade of 1096-1099 A.D all the remaining ones were either led to stalemate or total failure. The historians come out with findings why these Crusades failed. Their reasoning is summarised as five lessons for business firms as regards to conducting their business warfare.

1. Dilution of primary of purpose: In 1095 AD Pope Urban II called for the First Crusade at the council of Clermont. Presumably the goal was stated as redeeming Holy Land from the Muslim rule. However the underlying purpose is to assist Byzantine emperor Alexios I in his conflict with Seljuk Turks. Diluting primacy of the purpose led to confusion in the rank and file, who although sacked Jerusalem in July 1099 had decided to return back to Europe after establishing several Crusader States that were not contiguous and not defensible in nature.

2. Lack of planning: Subsequent eight Crusades suffered the after effects of dilution of goals as the commanders started to play their own games and started using soldiers as their pawns in achieving ulterior and selfish goals beyond the mandate of saving the Holy Land. Coincidentally, lack of planning on one part and inability to supply arms and food in time while battle was raging had severely constrained the capacity to fight a strong and motivated Muslim army.

3. In-fighting within the ranks:  As  companies of soldiers were from different regions of Europe they differ greatly as regards to ethnicity and war fighting capability that could not be bridged easily leading to disunity amongst the commanders and then frittered down to foot soldiers. Sans of motivation the desire to continue fighting collapsed after Muslim army began the onslaught.

4. Absence of motivation: Ideals are good provided that these are channelized to boost motivation as set of self-less goals. Crusader army, from the beginning of war fighting was much focussed on personal gains in terms of collecting war loot or self-glorification. Except Richard, Coeur de Lion, King of England who exhibited bravery and magnanimity many of his soldiers fell prey to greed in the Third Crusade against Saladin. 

5. Cost escalation: War fighting is not a cheap item; it is a costly affair where men, materials and machinery are to be procured and harnessed in better way while fighting is in progress. The Crusader army was recruited on the promise of better pay or sharing of war loot. On the other hand Muslim warriors were only dedicated to uphold their religious belief in fighting a holy war and the cost and rewards never mattered to them.

These five lessons from Medieval Crusades shed light on how firms must execute business warfare when they meet up with their opponents in the market place.

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist