Tip number 1: Carefully consider the countries where you want to be present
The core of trading is to ensure delivery of the best possible goods at the right time as cheaply as possible – and to ensure full payment for delivery as quickly as possible. That’s why decisions have for a while focused on just-in-time supply chain management and on reducing the total costs. It works really well when you know the risks.
But with the world events we have seen over recent years, the risk picture has changed. Coronavirus lockdowns, nationalisation and international sanctions have shown how quickly market conditions can be changed by national regimes or by international political decisions.
“Geopolitics has been put on the risk agenda, and when you include the geopolitical perspective, the decision-making process now has more facets, and there are more risk parameters to consider. The just-in-time strategies are being replaced by just-in-case strategies,” says Richard Hayes, Head of Trade Solutions Denmark. Stockpiling and friendshoring where you choose to operate in countries which are allies or have the same values as your own country are two levers that are now being used.
In connection with exports and imports, there is good reason to be cautious and carefully consider where you want to operate. Perhaps you cannot predict a situation such as a pandemic, but you should always have considered whether the authorities in a given country may hamper or completely destroy business opportunities, for example in a crisis situation. If there is high uncertainty, you should team up with specialists to assess the risk so you can prepare your strategy and consider mitigating measures.