Friday, April 11, 2014

What Would You Do?

You are A, and your customer B, has been approached by your competitor, C.

C has told B that C will give better prices and steady supply if B will call A (you) a criminal and generally revile you.

You have been giving A very good discounts.

Now to complicate matters, your supply to your customer B crosses the territory of Customer D.  Customer D cannot and will not pay its bills, because it is a kleptocracy.  (Well, it could have, it just preferred leaders who steal anything that is not nailed down.)

Now what normally happens when a preferred customer goes bad debt is they lose their preferred prices, exactly as we have in this case, with D now being offered going market prices.

So what would you do about customer B, who has agreed to call you criminal and generally take steps to hurt you?

You'd probably cut them off, or at least require prepayment, since shipping anything to B across D territory is not likely to make it, unless A intervenes with the kleptocracy in D.

B is actually Nineteen countries, that joined the USA in unprovoked revilement and sanctions against Russia.

Customer B did not think through their acceptance of competitor C's offer.

1.  Competitor C has no product to sell.

2. Competitor C has no means to deliver the product, if it had it to sell.

3. Competitor C's supply requires a political revolution in USA to allow a dubious practice called fracking.  The offer to customer B is merely to try to tip the political scales toward oilmen in USA.

USA has told nineteen countries that USA will give better prices and steady supply if Nineteen Euro countries will revile Russia and promote sanctions.  When your product must cross nazi-ascendent Ukraine.  Those nineteen countries must be feeling a bit like the USA-backed al-qaeda forces in Syria. Abandoned!  Hoping the neocons can save them.

So you'd expect Russia to exact some serious revenge.  But no.  Supplier A is a world class leader.

In such a situation, Mr Putin said that Gazprom's contract "compelled" to supply Ukraine only with gas that has been paid for in advance.

Undoubtedly, this is an extreme measure. We fully realize that this increases the risk of siphoning off natural gas passing through Ukraine's territory and heading to European consumers  (says Putin ed.)
The letter was sent to the leaders of Moldova, Romania, Turkey, Hungary, Slovakia, Slovenia, Macedonia, the Czech republic, Poland, France, Germany, Croatia, Bosnia and Herzegovina, Greece, Serbia, Bulgaria, Austria and Italy, according to a person familiar with the matter.

Russia obviously has leaders who think things through.  It does not appear so in the 19 countries listed.  They will now be prepaying for their gas, at market rates, if they can get any at all.  In the meantime, the manpower, engineering and material to build a pipeline from Russia into China is ready to go. Russia has gas, China has massive excess construction manpower, engineering skill and pipeline production capacity. And no need to ask anyone what they think. Putin meets with the Chinese next month.

For all of our spying on every single phone call, email, skype, letter...  no one saw this coming.  Except for anyone actually running a business.    It's just business.

Feel free to forward this by email to three of your friends.


3 comments:

Anonymous said...

Hi John,

I was wanted to know if the business techniques taught in your book would work for software? Say I have an idea for a software program, but I'm not a software programming expert and would need help in writing and developing the software program. Could I approach stores, sales reps., suppliers (programmers), etc., in the same or similar way to develop and sell the software product?

John Wiley Spiers said...

Yes, get the customers first. And yes, Apple hires outside software writers... work with code writers... the main thing is customer first....

Anonymous said...

Some of the links in the blogposts are not accessible.