JETRO survey points to rising confidence in European & US business for Japanese firms

October 21, 2010

Sep. 30, 2010

The Japan External Trade Organization (JETRO) today released the results of its latest surveys* on Japanese manufacturers in Europe and Turkey (hereafter “Europe”) and Japanese manufacturers in the US. Both surveys were conducted between July and August 2010, and 314 valid replies were received from firms in Europe (or 56.0% of companies sent questionnaires), while 806 replies were received for the US survey (68% of firms).
1. Outlook for 2010: about 70% of firms in both the US and Europe expect to post an operating profit
Against the backdrop of uncertainties in the US and European economies due to the euro crisis driven by Greece’s debt woes and the risk of a double-dip recession, about 70% of Japanese manufacturers in both the US and Europe expect to post an operating profit in 2010, largely on the back of increased sales.
Comparing operating profits for this year with a year earlier, the difference between ratios of firms citing “improved” and “declined” (by both firms in the US and Europe) was the largest in a decade. Looking ahead to 2011, more than 90% of firms in both regions expect profits to “improve” or “remain the same,” revealing a positive outlook for the economic situation rather than concerns over a possible double-dip recession.
Meanwhile, Japanese manufacturers and their counterparts in both the US and Europe are facing intensifying price competition. And while respondents have a more positive outlook for 2010, mainly due to increased sales, they still are planning retrenchments in personnel and management/utility costs.
2. Biggest challenges for firms in Europe: exchange rate fluctuations and price competition
More than 60% of Japanese manufacturers in Europe forecast improved business in 2010 (compared to a year earlier), showing a recovery in business confidence. Reflecting this, nearly 70% of respondents expect operating profit for 2010 (the third highest in the past decade), compared to 50% for 2009, showing that firms managed to prosper (i.e. increase sales), despite uncertain economic conditions. The majority of respondents have plans to increase local production in the next one to two years and also expand sales in neighbouring emerging countries, including Russia, which is on its way to an economic recovery.
Ranking at the top of firms’ management problems/issues were “exchange rate fluctuations” and “price competition with Korean or Chinese counterparts.” To counter these challenges, more than 40% of respondent firms plan to “expand local production,” and an increasing number are eyeing to “diversify or shift procurement source to China or other locations.” To reduce costs, a notable number of respondents said they would “hire executive-level personnel locally.”
3. While facing challenges such as price competition, manufacturers in the US are hopeful for benefits from the environment market and government policies to boost exports.
According to the survey, growth in capital investment and employment among Japanese manufactures in the US seems to be levelling off, suggesting that firms are still waiting to make their next moves, as the economic recovery gains speed. However, they feel the worst is over.
Management problems/issues cited most by firms included “lower sales due to price competition” and “cost increases due to yen rise and spike in raw material costs.” Firms expressed concerns over possible rising health care costs under the health care reform bill passed by Congress in March.
Firms seem mostly positive about the booming environment market, seeing opportunities in solar and environmentally-friendly vehicles, while others anticipate increased orders from local firms on the back of the Obama Administration’s export growth strategy.

JETRO Releases the Results of its Survey of Japanese Manufacturers in Europe & Turkey and the US – JETRO


"Social media is useless" says Telegraph – but where’s the evidence?

October 21, 2010

The Daily Telegraph recently published an article in which it claimed that the majority of small businesses found social media of no use to their business under the heading “Small Firms: Social media is useless”

A survey conducted by the Forum of Private Business (FPB) found that 52pc of respondents who use social media sites such as LinkedIn, Facebook or Twitter, regard them as ‘not useful’ or ‘useless’ to their businesses.

OK – 52% is technically a majority, but only just. What about the 48% of businesses that find social media tools useful? That’s a lot of businesses; and a lot of potential customers just waiting to be engaged.

FPB spokesman Phil McCabe said: “It’s clear that, while a lot of our members are certainly trying out social media for their businesses, many remain unconvinced of its benefits.”

That maybe true. But perhaps that has just as much to do with how effectively they’re using it, as it does the usefulness of the media itself. The same report goes on to state that nearly 20% of respondents “Didn’t have a website.” Would the Telegraph argue that this proves the internet is not a useful business tool? Social media is not the magic silver bullet of marketing, but it is a useful tool for some businesses to be able to engage with their customers.

When choosing to use social media, you should follow exactly the same evaluation criteria as you would use for any other marketing tactic: determine the target audience, the ability of your chosen medium to reach them and what you hope to achieve as a result. There’s nothing to say you have to use social media, any more than there is a rule that you have to use advertising, fly-posting or cold-calling in your marketing strategy. All these techniques will work in the right circumstances. But only you can decide whether they are appropriate for your aims.

Small firms: "Social media is useless" – Telegraph


Vote Manufacturing – supporting a worthy cause

October 19, 2010

As an industrial PR company, it is of course in our interests to support manufacturing industry. But our involvement in industry goes much further than just relying on it for our revenue. Myself and other members of the team have all spent time in industry. I myself trained as an electronics engineer originally and spent the early part of my career getting my hands dirty in a variety of engineering jobs.

Vm-3 From this experience, I consider that I have a personal connection to manufacturing and engineering, and a keen sense of its importance to the UK economy. Every year, when we work at engineering and manufacturing events in the UK and Ireland, I am continually struck by the resilience, skill and sheer enthusiasm of those still involved in industry and I make no apologies for being a staunch supporter of manufacturing industry in the UK. A strong UK manufacturing sector means not only a strong economy, but a strong market for OEM’s and manufacturers across Asia.

The outgoing administration in the UK did very little to support manufacturers. Following the election this year, a group of interested parties met at The Future of UK Manufacturing Summit in London to discuss what the government should do to support industry. The result of which was the Vote Manufacturing campaign, which I am pleased to say we have now joined. Here is an extract from the campaign website at http://www.votemanufacturing.co.uk/the-campaign.html

UK Manufacturing employs three million people directly, with two million more providing services for manufacturing. With their families, that’s 10million people – more than enough to ensure the message gets heard.

The new government will either salvage or savage UK Manufacturing. Our competitive balance versus Europe and Asia has become dangerously delicate for a nation deep in debt. The wrong decisions now could take manufacturing beyond a return to prosperity.

These are some of the stark warnings delivered by industry leaders at The Future of UK Manufacturing Summit (www.ukmanufacturingsummit.co.uk), held on 4 March at the Institution of Mechanical Engineers’ London headquarters.

The Vote Manufacturing campaign has been created to take these discussions forward. At the heart of the Vote Manufacturing campaign are five priority actions vital for manufacturing businesses and their employees.

If you are involved in industry, why not visit the site and join the campaign.

Vote Manufacturing


The care and feeding of journalists – Lesson 1

October 18, 2010

A salutary tale of why it is so important for companies to choose their PR consultants with care. But having done so, it’s also vital that the client supports their activities with timely information and co-operation, or dire consequences can result: This is a quote from a real-life journalist:

“Another point here: when things go wrong for a company, I’m rubbing my hands if their PRs have been obstructive, incompetent or rude. But the ones who have been helpful, returned my calls (even if they couldn’t help) and don’t bombard me with releases or stories I’m never going to use in a million years get the other sided of the coin. Doesn’t mean I won’t write the story, but I’ll use slightly different words a different emphasis, that tone it down and make it a problem rather than a disaster.”


A text book lesson in how to do Social Media

October 5, 2010

We’ve written before here about when Social Media goes bad: Those times when a company messes up, incurring the ire of bloggers or followers and gets torn to pieces online in a very public display of anger. But every so often, we run across the reverse – where something goes wrong, but the company concerned regains control of the agenda and turns what looks like being a sure-fire PR disaster into a triumph.

A recent thread we’ve been following on LinkedIn is a text-book example of how to deal with discontented customers and defuse a situation. The group in question was set up around a recent trade exhibition at the NEC in Birmingham. Several people had commented on the bad service they’d received from the site services company Melville – the company that rents furniture, supplies electricity etc. What started as a minor grumble quickly escalated into a major demonstration of anger as more and more people joined in to voice their anger over allegedly bad service and what were perceived to be unfair prices. Melville holds the service contract for the NEC, meaning that exhibitors do not have a choice of supplier. This further inflamed commentators as they felt they were being held to ransom.

But just a few days into the discussion, two of the most vocal critics posted messages to say they’d been contacted by Melville’s CEO and the Account Director concerned, who promised to deal with their complaints personally.

melvilles

Rather than just ignoring the gripes – as the only supplier of services at the NEC, they could have done so with no loss – Melville responded quickly and decisively, turning two vocal critics into supporters and stopping the flame war dead in its tracks. What can be learned from this incident?

1. When trouble starts – don’t ignore it. Monitor, evaluate and decide the point at which you’ll need to take action.

2. Keep senior personnel briefed on developments and agree your plan for when action becomes necessary.

3. Identify the most vocal critics, find out their grievances; decide what demands they are making and decide what you can do about them.

4. Engage your critics: connect them with senior people within the organisation, assure them their complaints are being taken seriously.

5. Act. Do everything reasonable to fix the problem. If you can’t fix the problem, explain why. It is not necessary to do this in the public domain, although it is important to be able to show that you have taken all reasonable steps to make amends for any shortcomings. If doing so doesn’t quell dissent, then at least you can demonstrate to others that you have acted reasonably and this can be used to defend your reputation against further problems.