As I pen this note, the financial world and the global economy are in the throes of the worst crisis of our times. The global financial bubble has now burst, some of the largest financial institutions have collapsed , liquidity has dried up, wealth has shrunk to unimaginable level and investor confidence is wiped out,
Recession, starting from US, has shaken the nerves of many a countries. This has dampened the exports and the profits. Experts say the situation is likely to remain so in the near future, but it looks the worst is still to come
When everything was looking so handsome world over, why did it suddenly collapse? Detailed diagnosis by the experts is important so that we do not fall prey to the same problem again.
India too witnessed the meltdown. Look at the way the stock markets are bleeding. . India, in comparison, to even many advanced countries has stronger internal drivers for growth, robust financial system, excellent regulatory mechanism, and pro-active and pre-emptive monitoring of the situations. Therefore let us not panic
There are many favourable factors which can help us in facing this global storm
Oil prices have dropped down practically to 1/3, Inflation has dropped down to below 9% compared to high of 13% couple of months back. Raw material prices have dropped down to almost half or even less.
Economies of most of the other countries are worse and this is expected to work in our favour. Rapid inflation in China and other countries which are India‘s competitors has and will bring business in India’s way.
Our Government also appears to be in a supportive mood. Loan interest rates have been lowered, loans are liberalized and liquidity is being improved. They are striving to improve these factor further. We can certain suggest that upgrading the list of Focus products to include stainless steel utensils and cutlery will certainly help the Stainless Steel industry from the status of seriously illness.
Though Rupee exchange rate has changed to the advantage of Exporters, the impact is still to be reflected in the accounts of exports as they were forced to go for forward booking earlier, when the Rupee was appreciating at a very fast rate. Considering the very wide currency fluctuations, the exporters are confused to quote the prices as the adverse rate fluctuation could ruin him whereas safer rate may mean losing the order to the competitors. The Government and RBI may have to interfere to maintain stable currency rate. Till such time, the exporters could still hedge their requirements to their advantage at present.
While the government does its part of duty, we have to question ourselves, ‘Do I change my strategies based on the current global scenario and thrive in future, or do I carry on with my age-old strategies and just watch to survive?’ It is time to take a decision…a decision that will decide the future. I believe that those who can face the present challenge are the winners for future.
Every crisis carries an opportunity with it and we should accept this opportunity to our advantage.
Exporters now need to find other alternatives to remain in business.
- Look for the alternative destinations to USA market. Diversify to Latin America and ASEAN regions, the European Union, Middle East and African countries can be the next best market options to counter the shortfall.
- Both manufacturers and exporters need to sit together, see where every penny can be saved and revamp their product catalog and their price tags. They need to integrate in their operations
- Multiple price options can be offered to the customers. If a buyer finds the price of a product beyond his target price, offer an alternative product which suits to his range.
- Different prices for different geographical locations can help exporters to balance their p their profit margins.
- Dealing in difference currencies for different countries could help in protecting heavy fluctuation in one currency
- Plan and shorten delivery time. This will protect, to certain extent, any possible loss arising out of cancellation of orders due to changes in the economy of the importing country.
- Change in marketing strategy by negotiating more on E-commerce media could reduce the overseas travel expenses
The nation today expects from us much more than ever before. Well, let us try, if we can get the change in our business.