Strategy for international business

I

ishankelvalkar

Ishan Kelvalkar
Suppose you are a CEO which deals with exports business..Currently 50% of revenue is generated by exports from India to Pakistan.With the current scenario of tension between the nation what will you do to avoid huge potential losses...??
 
I believe this is more of a Risk Management problem.

Firstly, as a CEO (Assuming he is an Indian) would already be aware of the political instability between the two countries.

Secondly, there are plenty of strategies that could be employed,

1. Diversify the business to countries with similar demand for your products. (Possibly Afghanistan)
2. If you are getting into Afghanistan, you could explore the possibilities of importing your goods into Pakistan via the Afghan border through your entity registered in Afghanistan. Of-course the commercial and legal aspects would need to be evaluated. However, a lot would depend on the profit margins you get from your exports to Pakistan and the impact of denting your margins in your biggest export market on other international businesses.
 
Rightly mentioned Meheer..
A CEO should have planned business with strong foresight,
The organisation should start looking for new other countries like middle east nations...
Otherwise just hope for "Aman ki Asha"..:)
 
Sometimes you need to cut your losses instead of finding ways to avoid potential losses.

Diversification is the key. The CEO has to find markets with similar taste and cultures as Pakistan, study the cost structures of exports to those countries and expand to those markets.

Aside, there has to be some product diversification to cater to other markets with a glocal strategy.
 
I completely agree with above comments as CEO of Export Import Company. You always think of new alternative to diversify & expand the business . If your 50%u0025 revenue is generated from Pakistan & sociopolitical condition are not safe then i would explore more middle east countries & try to hit new International markets with some other products.
 
Some businesses are area specific and can only be profitable if done between specific two countries..Like India sells tomatos to Pakistan at very higher price than domestic market as demand there is more.
 
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