4 Counterintuitive Trends

One of the simplest ways to choose an investment and business focus is to identify a trend and simply ride the wave.

Here are four counterintuitive trends that can be a source of profitable investments and business developments, particularly as the gfc continues.   Consider these 4 counterintuitive trends as ways to turn Crisis to Profit.

Oil, Gas, and Electricity.

No matter how the price of oil fluctuates on a month-by-month basis, energy will generally be less cheap and plentiful a commodity during the next five years.

There are three well-known reasons for this: first, the political tensions rife in the Middle East (and in such oil-producing nations as Venezuela, Russia, and Nigeria); second, the growing demand in emerging economies such as China and India; and third, the dwindling supply of "cheap and easy" oil and natural gas. Likewise, electric power producers will feel pressure to move away from coal, which is plentiful and relatively inexpensive, because countries around the world — even the coal-prolific United States and China — are increasingly likely to regulate greenhouse gas emissions.

A Shift in Supply Chain Practices.

Suppliers, which produce the components of the cars sold by mainstream manufacturers, are in trouble.Even suppliers with a long track record of success have been squeezed, with profit margins often below the cost of capital.

Why have suppliers been facing so much difficulty?

First, prices for many key commodities — for example, oil, steel, energy, and plastics — have risen dramatically.

Second, many companies are still following strategies they pursued in the 1990s. In the automotive industry, suppliers continue to focus on winning as much business as they can, whatever the cost; then they figure out the details of profitability later. Today, however, it makes more sense for most suppliers to reject business where they can't make a profit.

Third, the supplier base is going global.

Consumer Packaged Goods: Reorganizing for Growth.

During the last 20 years, many manufacturers have struggled to grow their businesses in the sophisticated consumer markets of North America and Europe.

some of the most successful companies have started to seek a new approach to growth. They face a difficult challenge: finding the right balance between large and profitable global brands on one hand, and, on the other, locally customized and tailored products.

Consumers will see this play out in the form of products that vary more from one region to the next, for example, or change more rapidly on the shelves.

Not every consumer products company will figure out how to become an effective global, execution-driven enterprise but those that can't make the switch will probably not survive.

On behalf of The Global FC Zone,

Crisis to Profit.

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