Global Business Development

EGS Biweekly Global Business Newsletter Issue 53, Tuesday, April 5,2022

Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)

Trends in this issue:

Inflation is up but so is international travel. The impact of the war in the Ukraine continues to cause major economic, political and policy changes in Europe and much of the rest of the world. 

For a look at the impact of the war on franchising, listen to my podcast with Larry Weinberg, a truly global franchise attorney at the link below.

First, A Few Words of Wisdom From Others

“There is no sin punished more implacably by nature, then the sin of resistance to change.”Anne Morrow Lindbergh. Compliments of Beth Adkisson

What you can do today can improve all your tomorrows.”, Ralph Marston 

“Play by the rules, but be ferocious.” – Phil Knight.

Highlights in issue #52:• Seven Themes to Define Europe• Russian invasion of Ukraine forces China-Europe rail transit to sea.• China Manufacturing Activity Slumps to Two-Year Low, Caixin PMI Shows• After 73% Collapse, Latin American Stocks Finally Start to Soar• Understanding International Franchising: Ukraine and Russia – a podcast• No one asked for a hamburger vending machine, and RoboBurger answered• 7 Mistakes That Make or Break Small Businesses• What Makes A Quality Franchise?• Brand Global News Section: Dairy Queen®, KFC® and Texas Roadhouse®

Interesting Data and Studies

Geopolitical instability is now cited as the top risk to both global and domestic economies in our latest McKinsey Global Survey on economic conditions.That’s the consensus among executives worldwide, who have cited the COVID-19 pandemic as a leading risk to growth for the past two years.

Our quarterly survey was launched four days after the invasion of Ukraine, and executives express uncertainty and concern about its impact on the economy. About three-quarters of respondents cite geopolitical conflicts as a top risk to global growth in the near term, up from one-third who said so in the previous quarter. Meanwhile, the share of respondents citing the pandemic as a top risk fell from 57 to 12 percent, as much larger percentages now identify energy prices and inflation as threats to the global economy.”, McKinsey, March 30,2022

The European member states are countries mainly in Europe, and three outside, that are part of one or more of the four major treaty groups, namely the European Union (EU), NATO, Schengen, and eurozone. Beginning with six countries in 1958, the European Economic Community has since added 21 more countries (the UK left the EU in 2020), with a primary focus on single or internal markets.”, Visual Capitalist, March 7, 2022

Global Energy

U.S. liquefied natural gas exports rise 16%, to new record – U.S. LNG is in high demand as European countries try to cut gas imports from Russia following its invasion of Ukraine while also looking to rebuild low inventories. U.S. LNG exports to all destinations were about 7.43 million tonnes (MT) last month, according to Refinitiv, up from 6.4 MT in February and topping the prior record of 7.25 MT in January. Europe was the top importer of U.S. LNG for a fourth straight month, taking about 65% of U.S. exports. About 12% of exports went to Asia, and 3% to Latin America, the data showed. About 20 vessels responsible for 20% of volumes had not signaled a destination.”, Reuters, April 1, 2022

Global Supply Chain & Trade Update

Russian invasion of Ukraine forces China-Europe rail transit to sea. Over 1 million containers scheduled to go by train between Europe and China via Russia must now find alternate routes. Exporters and logistics firms transporting goods between China and Europe are now looking to avoid land routes passing through Russia or the conflict zone in Ukraine, putting additional pressure on ports already struggling because of COVID-19.”, ExigerTrends Report, March 2022

“Stratfor 2022 Second-Quarter Forecast – During the second quarter, the world will continue to feel the impact of the war in Ukraine, high inflation, energy crunches, supply chain bottlenecks and a weakening — but still present — COVID-19 pandemic. Even if negotiations between Moscow and Kyiv make progress, the West will keep most of its sanctions against Russia in place, which will result in prolonged political and economic uncertainty. In the meantime, high energy prices will slow economic growth worldwide, negatively impacting households’ cost of living and businesses’ operating costs. Food and energy inflation will be particularly problematic because it will keep the risk of social unrest high, especially in emerging and developing countries where governments have less fiscal room to mitigate its impact.”, Stratfor, March 28, 2022

Russia’s war on Ukraine has adversely affected the Arab region, which heavily depends on wheat imports, including from these two countries. The fallout from the war varies from country to country, but it has hurt one Arab nation more than the others: Egypt. In Egypt, wheat shortages have further exacerbated supply issues precipitated by poor government planning and the country’s rapid population growth. Since the war began last month, food prices have increased 25-50 percent and are likely to keep rising.”, Geopolitical Futures, March 31, 2022

Global, Regional & Local Travel Updates

What it’s like to travel to Australia right now – Four weeks after the country opened to vaccinated visitors, international flight bookings are nearly half (49%) of pre-pandemic levels, according to the travel technology company Travelport. On average, fewer than 500 weekly international flights landed in Australia in March — down from 2,000 in March 2019 — according to Tourism Australia. However, international flights are expected to double in the next three months, mainly from Singapore, New Zealand, Indonesia and Hong Kong, according to Tourism Australia.”, CNBC, March 28, 2022

Traveling to France? Here’s what to know about booster and testing requirements – In the eyes of the French government, American travelers age 12 and older must fulfill two vaccine-related requirements to be treated as fully vaccinated. The first is that you must show proof of receipt of either two doses of the Pfizer, Moderna or AstraZeneca vaccine or one dose of the J&J vaccine.Regardless of whether you received a single- or double-dose vaccine, if nine months or more have elapsed since your final dose, you must also show proof of a booster in order to maintain a full vaccination status.”, The Points Guy, April 2, 2022

India has finally reopened its borders to international visitors – Even those countries that took a rather cautious approach to the pandemic are finally reopening their borders. New Zealand has started allowing travellers in again, South Korea is reopening next month and Thailand is scaling back its strict testing requirements. Now, after two years cut off from the world, India is also reopening to travellers. Until this week the country had only been letting in chartered flights, meaning it was essentially off-limits to most international visitors. But as of this weekend, 66 airlines from 41 countries – including the UK, US and Australia – will be allowed to fly a limited number of weekly flights to the country.”, Timeout.com, March 29, 2022

Country & Regional Updates

China

China changes audit secrecy rules in bid to stop US delistings – Watchdog will allow foreign regulators to access sensitive financial information on overseas-listed companies. Beijing has revised its audit secrecy laws in a bid to stop around 270 Chinese companies from being delisted from US exchanges, in a significant concession to pressure from Washington.

The China Securities Regulatory Commission, Beijing’s top financial watchdog, said on Saturday it would change confidentiality laws that prevent its overseas-listed companies from providing sensitive financial information to foreign regulators.”, The Financial Times, April 2, 2022

China Manufacturing Activity Slumps to Two-Year Low, Caixin PMI Shows – Activity in China’s manufacturing sector contracted at the steepest pace in 25 months in March, a Caixin-sponsored survey showed Friday, as restrictions aimed at containing a fresh wave of Covid-19 outbreaks hit supply and demand, while the war in Ukraine hurt export orders. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, fell to 48.1 from 50.4 in February.”, Caixin Global, April 1, 2022

Europe

Seven Themes to Define Europe – The Russia-Ukraine conflict will have far-reaching effects that look set to redefine many megatrends in Europe. We believe it is one of those rare events in history that will reshape geopolitics, societies and markets. Europe will transition to be more independent and redefine many of its sectors and economic paradigms. The consequences will range from the development of new industries, the acceleration of existing ones, additional infrastructure and technologies, while reaching independence and leadership for some.”, Bank Of America Study, March 22, 2022. Compliments of Steve Kwang, Vice President, Senior Financial Advisor, Merrill, Lynch Wealth Management

European Inflation Soars to Record – Euro-zone inflation surged to a record 7.5% in March from a year ago as Russia’s war in Ukraine further boosted already soaring energy costs. While that’ll cost consumers about 230 billion euros ($254 billion) this year, household savings should help cushion the blow.”, Bloomberg, April 2, 2022

Latin America

After 73% Collapse, Latin American Stocks Finally Start to Soar – Commodity rally is boosting exports and buoying weak economies Morgan Stanley favors Brazil and Chile despite political risks. The spark is the same today as it was then: a boom in global demand for the region’s exports of oil, copper, soybeans, corn and iron ore. Russia’s invasion of Ukraine only further squeezed global supplies of key commodities, pushing up prices more and generating a steady stream of dollars that is breathing life into long-stagnant economies from Mexico to Brazil. The result: The MSCI’s regional index, known as MXLA, has jumped 26% in the first quarter, its best start to a year since the early 1990s.”, Bloomberg, March 31, 2022

India

Cost of Living Rises in India as Companies Pass on Higher Prices – Inflation spike risks denting disposable incomes, consumption RBI to decide on rates April 8 amid above-target inflation. Bloomberg, April 4, 2022

Israel

Why Israel Drew 28 Times More Venture Capital Per Capita Than the U.S. – Despite the flourishing of work from anywhere during the pandemic, it still matters where a startup is located….This comes to mind in considering the flow of venture capital around the world in 2021. A striking conclusion is that on a per capita basis, capital flows into Israel were a whopping 28 times more than those in the U.S. To be sure, 2021 venture capital flow into the U.S. was way larger – up at 154 percent in 2021 to $330 billion – than to Israel – 136 percent higher to $25.4 billion, according to ‘NoCamels’. But Israel’s population of about nine million is a fraction of the U.S.’s 330 million people. Hence, Israel’s $28,000 in venture capital invested per capita in 2021 is far above the U.S.’s $1,000.”, Inc., March 29, 2022

Italy

““Italy’s Factories Feel the Economic Shocks of Ukraine War – Russia accounts for just 1.6% of Italy’s exports but in some sectors the proportion is much higher. And that’s without taking into account the impact of higher gas and power costs on energy-intensive sectors such as steel making, paper manufacturing or ceramics. Overall, according to a study by the Fim-Cisl union, more than 25,000 workers have already been affected by the economic fallout of the fighting, mostly in the highly industrial regions in the northeast of the country.”, Bloomberg, March 29, 2022

Russia

Bloomberg logs off at Moscow terminals – The parent company of Bloomberg News has suspended its operations in Russia and Belarus after President Putin’s invasion of Ukraine. Customers in the two countries will be unable to access financial products including the terminal, data licence, data feed and electronic trading platforms, the company said. Trading functions for a range of Russian securities also have been disabled in accordance with international sanctions, Bloomberg said.”, The Times of London, March 30, 2022

Singapore

Singapore Restaurants See Surge as Pandemic Early Closing Ends – At 10:31 p.m. on Tuesday, cheers went up from the crowds who had flocked to Singapore’s bars and restaurants. It wasn’t a World Cup match or the Super Bowl, but simply the first time in ages that people could still be drinking alcoholic beverages past 10:30 p.m. at food-and-beverage establishments in the city-state. The 10:30 limit, put in place as a pandemic restriction mainstay, has finally been lifted as Singapore slowly works its way back to normal.”, Bloomberg, April 1, 2022

Turkey

Turkish Inflation’s Rush Toward a New 20-Year High Leaves Lira Vulnerable – A three-month policy pause by the central bank means Turkey’s interest rates — already the world’s lowest when adjusted for prices — are set to reach new depths as the cost of everything from food to energy surges. Data due Monday will show inflation climbed to an annual 61.5% in March from 54.4% a month earlier, according to the median of 19 estimates in a Bloomberg survey.”, Bloomberg, April 4, 2022

United Kingdom

City talent hunt drives rise in visa sponsorship – Finance firms in rush for overseas recruits. City firms are sponsoring overseas recruits to come to work for them in the UK at the fastest rate since before Britain left the European Union, according to Home Office figures. About 200 foreign-based workers a week are being hired by British banks, fund managers, insurers and other City firms as the search for talent intensifies and as visa rules are relaxed.”, The Times of London, April 4, 2022

United States

The (March 2022) Future Of Everything Report – Keys to Surviving and Thriving in Post COVID-19 and BeyondWe discuss the economy, the markets, and megatrends that disrupt everything including our careers, our money, and our lifestyle”, Brian Connors, NPB Financial Group, March 30, 2022. Editor’s Note: At the start of each monthwe will include a link to this timely and comprehensive report.

No one asked for a hamburger vending machine, and RoboBurger answered – If a startup from New Jersey has its way, the next Ray Kroc will be a robot. In the last week, a company called RoboBurger installed an autonomous burger chef in Jersey City’s Newport Centre Mall. Over on its website, RoboBurger breathlessly describes its vending machine as the ‘biggest innovation in hot food vending since the invention of the microwave.’”, Engadget, March 29, 2022

Brand News

Dairy Queen Just Made Its Biggest Menu Change In Over 20 Years – The restaurant chain now plans to shake up its entire menu with the biggest revamp that the chain has seen in about 20 years. TODAY reports that Dairy Queen plans to make diners think about burgers when they walk through the door with a new line of Stackburgersthat come in five different topping combinations.”, Mashed, March 29, 2022

KFC’s first fine dining restaurant includes a gravy candle that melts into chicken fat – KFC opened its doors to an innovative fine-dining experience for one weekend only, taking their famed crunchy chicken to a whole new level. Over 200,000 people applied for tickets, but only 180 of them successfully got a place at the exclusive experience in Sydney (Australia). Luckily, TikTokuser Samantha (@samantha.khater) provided the platform with all the juicy details.”, Indy 100, April 3, 2022

Texas Roadhouse Is Growing Impressively – In 2021, the company’s sales growth and operating profitability was better than pre-covid levels…..Louisville, Kentucky based Texas Roadhouse opened its first restaurant in 1993 and since then has expanded to over 667 restaurants in 49 states and ten countries. The company’s business approach is to position each of its restaurants as a local favorite for a wide range of customers looking for quality, low-cost meals provided with a friendly, attentive service. As of December 28, 2021, the company employed around 73,300 people.”, Seeking Alpha, April 1, 2022

These Restaurant Chains Are Raising Their Prices – Be it Starbucks or Taco Bell, Dunkin’ or Domino’s, every chain seems to have felt the burn of red hot inflation, and is turning to customers to cool it down. But as we know, there is little that’s more exasperating than seeing your favorite restaurant ask you to pay more. Here’s a run-down of restaurant chains that are unfortunately asking you to do exactly that.”, The Mashed, April 1, 2022

Articles & Studies For Today And Tomorrow

Understanding International Franchising: Ukraine and Russia – In this episode (of the Franchise Voice podcast), we are discussing the impact of the war in Ukraine on franchised businesses and the decision of many to cease operations in Russia, as highly reported in the media. We will dive in to how all of this works, answer frequent questions, and address common misperceptions about the franchise business model. We have two international franchise experts who will help set the record straight about how franchising works and what this means for businesses with units in these areas.

William Edwards, CEO & Global Advisor to Senior Executives, Edwards Global Services, Inc., Larry Weinberg, Partner, Cassels, Jack Monson, Host and Bill Meierling, Host

What Makes A Quality Franchise? – The cover story of this issues ‘Franchise New Zealand’ magazine describes the ingredients that successful franchises have in common., Franchise New Zealand Autumn 2022 issue

7 Mistakes That Make or Break Small Businesses – Launching a new business is risky — learn from other’s mistakes and set yourself up for success. It is arguable that the mistakes that make or break small businesses are similar across industries and geography. Whether it’s focusing attention on places that don’t produce income or build relationships, not setting boundaries or ignoring their online reputation, I’ve watched small businesses make these mistakes that make or break them.” Entrepreneur magazine, March 31, 2022

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Our MissionInformation Sources & Who We Are

Our biweekly global business update newsletter focuses on what is happening around the world that impacts new trends, health, consumer spending, business investment, economic development and travel. We daily monitor 30+ countries, 40+ international information sources and six business sectors to keep up with what is going on in this ever-changing environment. Our GlobalTeam™ covers 43 countries and provides us with updates about what is happening in their specific countries.  Please feel free to send us your input for the biweekly report. bedwards@edwardsglobal.com

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William (Bill) Edwards, Your Newsletter Editor, has a four-decade career successfully accelerating the international growth of more than 40 brands. Bill Edwards has a four-decade career successfully accelerating the international growth of more than 40 brands. Bill is known as an international Problem Solver and Advisor. Over the years, Bill has made and/or seen most of the mistakes companies make when going global. In Bill’s role as a Global Advisor to ‘C’ level executives, his objective is to impart the wisdom he has learned over time to help them minimize costly mistakes. 

With experience in the franchise, oil and gas, information technology and management consulting sectors, he has directed projects on-site in Alaska, Asia, Europe and the Middle and Near East.  He has lived in China, the Czech Republic, Hong Kong, Indonesia, Iran and Turkey and has worked on projects in over 50 countries.

Edwards Global Services, Inc. (EGS) provides a complete International solution for companies Going Global. From initial global market research and country prioritization, to developing new international markets, providing in-country operations support and problem solving around the world. Our U.S. based executive team has experience living and working around the world. Our Team on the ground overseas covers 40+ countries.  EGS has twice received the U.S. President’s Award for Export Excellence.

www.edwardsglobal.com

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For advice on doing business successfully across 40+countries, contact Bill Edwards at bedwards@edwardsglobal.com or +1 949 224 3896.  

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