The Octopus
In the You Tube clip below a huge Octopus escapes through a ship portal the size of a coke can. https://www.youtube.com/watch?v=E3N0i_KM8cI
Looking at the Octopus, you would not have thought this was possible. But an Octopus is able to change shape so that it can fit is body through any gap the size of its beak. The Octopus is the ultimate adaptor.
McKinsey & Co – A Report on Global Trade
Global consulting firm, McKinsey & Co have just released a report on Global Trade. They conclude;
“…the tariff war did not kill global trade — in fact, against US tariff rates at their highest since the Second World War, global trade grew faster than the world economy.”
For instance;
- Germany the EU’s industrial powerhouse, imported more cars from China that it exported there for the first time in its industrial history.
- “…the US reduced smartphone sourcing from China by around 40%, dropping imports by $18bn (€15.5bn), but India increased smartphone exports to the US by $15bn (€13bn).”
Global Trade is made up of hundreds of thousands of individual businesses. What they have proven is that in the face of adversity, like the Octopus, they can quickly adapt and evolve to other places and carry on.
Is It Time to Adapt & Evolve?
The middle east, the blockades and the impact on the price of oil is starting to prolong.
At the time of writing, the wholesale oil price is coming down, but the effects of elevated oil prices likely to be with us for some time. As a country that is physically long and is import/export nation, an elevated oil price has a big impact. So, is it time to adapt and evolve?
Where Do We Adapt To
We are looking for businesses that are not affected by a higher fuel price. 4 areas emerge are;
- Healthcare, Aged Care & Medical Care – structurally protected under NZ’s Fuel Response Plan, they still need property, vehicles and equipment regardless of external conditions. All of it needs to be purchased, maintained and secured.
- Professional Services such as Accountants, Lawyers and Consultants. Their services can be in demand during times of economic disruption which provides confidence to their business. This means they will often look at purchasing other practices or doing something personally such as a commercial building purchase or home upgrade.
- Tech & Digital Services. Will grow as traditional businesses turn away from physical travel and invest in digital solutions to reduce fuel and operational costs. As they grow, they can also need equipment, fit-outs, commercial premises.
- Energy Providers, Electrical Contractors & Solar Providers – a huge growth area. Think Genesis, Meridian, Northpower and a host of smaller players. What is their eco-system around their inputs, product and outputs.
As an example; The government recently announced that it is spending $37m to replace school diesel generators with heat pumps. Who gets this work? And what happens with the waste in the form of the old equipment?
What Happens Next
At the moment, as astute business owners, we feel an obligation to watch the news each morning and night to try and understand latest developments and stay on top of things. And that becomes our world.
But with the Press “holding the microphone” we get a distorted view of reality and the positive things that are happening, and the opportunities don’t get heard about.
The reality is that some businesses are immune to oil prices and have got opportunities coming towards them.
Successfully navigating the current situation is about looking the right way and thinking the right things. At the same time, Covid taught us, that with planning, focus, speed of execution and having our teams believe in what we are doing, we can achieve the most amazing outcomes.
You never know your luck, you might end up far better off than when the oil crisis started.
Look after yourself (and your family).
Quentin