Currency market volatility and SME's

Back in early September, one of the businesses I work with was building a business plan which included purchases from China. We were quoted in Euros, and were aiming to sell the finished product in another international currency. The numbers were relatively small, but the impact of currency swings on the plans were high, although we felt they were fairly unlikely. Wind forward six months and those currency swings are in full flow - if we had gone ahead we could have seen a major impact. We would probably have gone ahead without a treasury operation, after all we were an SME and buying forward is for bigger companies, isn't it?

Just another example of the risks that face SME's venturing into international waters. Currency changes can be an opportunity as well as a risk, but either way, business owners need to be aware of the capacity of the markets to make life more difficult.

Brand vs promotion

In my blog "The Future of Marketing" I talked about the need to place the brand at the forefront of planning and execution, and that in the current economic conditions, marketers should look at long term brand growth as against short term promotional campaigns.

Interestingly today, the outgoing Chief Executive of Asda Andy Bond, told 'The Times' that;

"Our brand works best when we have less promotions....We got sucked into a very aggressive promotional battle at the end of last year. That was wrong for our brand"

One of the strengths of Wal-Mart, Asda's parent company, has been its almost religious adherence to its strategic principle which is indelibly linked to its brand. Asda is now going back to its own principle of "everyday low pricing" - a simple and clear statement that says to consumers what the brand of Asda is all about. It will be interesting to see what happens in the second half of the year as the prospect of the new government's austerity measures kick in.