Competitive horizon

Citation

(2011), "Competitive horizon", Strategic Direction, Vol. 27 No. 10. https://doi.org/10.1108/sd.2011.05627jaa.001

Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 27, Issue 10

New global economy fears from IMF

A lack of political determination is cited by the International Monetary Fund (IMF) as a key reason to fear a new global economic downturn. The organization lacks faith in governments to tackle issues left over from the last financial crisis. In a report published by the Australian (www.theaustralian.com), particular fears exist about the failure of European rulers to properly strengthen banking systems and combat the effects of sovereign debt default. Similar worries prevail regarding ongoing government debts in Japan and the US. Another concern is that economic growth could drop suddenly in China and other emerging nations. These fears have prompted the IMF to lower its forecasts for global growth during 2011 from 4.4 to 4.3 percent. Weaker conditions in Japan and the US are cited as key reasons for this revised forecast, despite predictions of stronger US growth later in the year. The IMF does, however, note increasingly serious risks to this prediction such as ongoing links between sovereign risk and financial sector risk in Europe. Fears that capital flows into emerging markets are being destabilized by continuing low interest rates in advanced nations is also seen as a concern.

Demand for natural gas set for significant rise

According to the International Energy Agency (IEA), natural gas consumption will increase and reach 5.1 trillion cubic meters by 2035. By this time, China will be the biggest consumer in the world and will account for as much as the whole European Union (EU) does today. Russia currently accounts for the largest volume and its consumption equals that of Germany, France, Italy, Japan, China and India put together. The country exports just 30 percent of natural gas it produces and is forecast to generate 655 billion cubic meters in 2011. As reported by www.pravada.ru, the IEA predicts that 2035 will see natural gas account for between 21 and 25 percent of total energy used around the world.

New markets for Pakistan exports

Pakistan is exporting its products to a wider range of countries, a report published by Dawn (www.dawn.com) points out. Trade Development Authority of Pakistan (TDAP) states that demand for the country’s products is growing in Egypt, China, Japan, the Middle East, Africa, South East Asia and the Far East. As a result, Pakistan has become less dependent on the US and the European Union (EU) for its exports and these markets now account for 40 percent rather than 60 percent. A rise in value is reported by TDAP and significant increases in the export volume of wheat, pulses, meat, fish, vegetables, tobacco, knitwear, synthetic textile, leather and plastic material has been noted. The report also reveals TDAP intentions to increase export promotional activities around the world, with a major focus on China and Japan during 2011-2012.

Why strategic planning helps businesses to succeed

The likelihood of business success reduces in the absence of a strategic plan. It is reported by the Online Business Advisor (www.onlinebusadv.com) as a main reason why many companies fail. Without a formal plan, priorities and goals become subject to constant change and the business will usually lack direction as a result. In contrast, many of the most successful organizations develop formal strategies that are subsequently well implemented and managed. According to the report, a strategic plan functions effectively when it guides operations in a way that enables each unit to achieve both specific objectives and shared organizational goals. Without this focus, employee confusion about roles is a likely outcome. A strategic planning team ideally should include employees, managers, owners and customers, who are all strongly committed towards successfully creating and executing the plan. The report suggests that planning for between two and five years is ideal and that a core ingredient should be to clearly identify opportunities for business growth during that period.