Competitive horizon

Strategic Direction

ISSN: 0258-0543

Article publication date: 22 May 2009

31

Citation

(2009), "Competitive horizon", Strategic Direction, Vol. 25 No. 7. https://doi.org/10.1108/sd.2009.05625gab.001

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited


Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 25, Issue 7

Indian opportunity for construction and engineering

A report by PricewaterhouseCoopers states that the Indian government’s plan to develop the country’s infrastructure offers massive opportunities for overseas construction and engineering companies. It points out that regulations have been eased to help attract foreign direct investment and that over the next three years alone $500 billion is needed for the infrastructure development plans. In spite of financial turmoil worldwide, the professional services firm still expects the Indian economy to grow by up to 7.5 percent in 2009. Growing consumer demand, expansion in the manufacturing and services sector and plans to revitalize rural industries are cited as reasons why the infrastructure needs improving. Government pledges to invest heavily in electricity, roads and railway over the next three years will considerably increase demand for construction, already the country’s second largest economic sector. The report, as published by www.economictimes.indiatimes.com notes that different companies from Europe, Australia, Canada. Korea, China and Malaysia have already made an impression in India following the simplification of rules surrounding foreign investment.

Companies alerted to the danger of bogus buyers

Legal experts believe that some companies masquerade as prospective buyers of other businesses in order to obtain sensitive information. According to an article published by Crimson Business (www.crimsonbusiness.co.uk) such companies will have no intention to see the purchase through. Instead, the real purpose of carrying out due diligence may be to access confidential information in areas like competitor’s pricing schemes, customer lists or employee data. To guard against these activities, firms are urged to implement effective screening processes to validate that the intentions of prospective buyers are honorable. Proof that funds are in place for the transaction helps in this respect. Sellers can also help protect their position by insisting that buyers sign confidentiality agreements and by checking that buyer knowledge of certain information is absolutely necessary before providing it to them.

Small EU companies face cost of new food labeling regulations

Small and medium enterprises (SMEs) in Europe will be most affected by food labeling laws if current proposals are adopted, a report published by Food Navigator (www.foodnavigator.com) warns. Figures released by the Confederation of the Food and Drink Industries of the EU (CIAA) show that 99.1 percent of food and drink businesses are SMEs and that almost half of the sector’s turnover is generated by these companies. Industry analysts estimate that complying with the proposed regulations could cost €400 for each product, with annual costs of up to €60,000 for companies with an extensive product portfolio. For SMEs, total costs could reach €6 billion each year within what is the EU’s largest manufacturing sector. The report notes that a transition period for compliance may be allowed but suggests that this facility will do little to help those companies that frequently change their products.

Measures launched to spur Latin American revival

A report published by the Tehran Times (www.tehrantimes.com) notes a range of initiatives taken by countries in Latin America to stimulate struggling economies.Brazil’s construction industry will receive a welcome boost from a national building program and the country’s government has also promised to finance credit for local businesses. Various measures have likewise been announced by the administration in Mexico. Plans to subsidize housing for the poor and to introduce unemployment insurance quickly follow the freezing of gasoline prices and higher investment on public works. Over $20 billion has been earmarked in Argentina for infrastructure, housing and education, while Cuba intends to lessen its reliance on oil imports by drilling 24 new wells. In Panama, the government plans to use international loans to shore up struggling local banks. The high self-sufficiency, plentiful resources and solid financial systems in the region are cited by analysts as grounds for expecting economic recovery to start in late 2009. Furthermore, they feel that an improved global environment should enable rapid growth to re-emerge by 2011.

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