Global Markets Sunny Side Up

The key question for investors going forward is will the current financial turmoil work itself out like the savings and loan problem of the 1990s or will it spread to the real economy. Another issue is whether the U.S. grown financial problems will spread to international markets or will they lead to ETF investors increasing their exposure to overseas markets.

There is little doubt that real estate markets are weaker than expected. The backlogs of existing unsold houses rose to 16-year high and average prices in America’s ten main cities fell by 4.1% this year to June. JPMorgan expects average house prices to fall between 7.5% and 15% by the end of 2008.

There are several ways that real estate problems could hurt the real economy. The first is consumer sales. Across the world, household spending has been supported by both property and equity prices. If the US housing slump deepens and markets continue to be weak, consumption growth will likely slow. Then there is the spillover effect whereby homeowners having mortgage payment problems, start having credit card payment problems and so on down the line.

In addition, there is the negative effect of rising borrowing costs on companies’ capital spending and hiring. Global business spending has been supported by record cash flows, as well as by debt funded investment. While expenditures in these areas may slow gradually as companies adapt to the new environment, there is already some evidence that equipment spending is softening in the US.

Watch for signs that indicate what is happening to the real economy: jobs, spending and capital expenditures. But keep in mind that despite the steady drumbeat of negative stories on TV business channels, the record of the American and global economy in weathering challenges is actually quite extraordinary. Take a look at the “sunny side” before going to cash and hibernating for the winter.
Here is the big picture which you can find in the American Funds mountain chart. The S&P 500’s total return has exceeded the return on “risk-free” Treasury long-term bonds in all but four of the ten-year periods — the ones ending in 1974, 1977, 1978, and 2002.

Despite wars, inflation, recessions, gasoline shortages and housing crashes in various parts of the nation, the S&P 500, with dividends reinvested, has yielded an average ten-year return of 243% vs. 86% for the highest-grade bonds. Since 1959, there has only been one year, 1980, when consumer spending fell.
Here are some more reasons to be optimistic that the U.S. and global markets will again be resilient.
First, consumer spending will likely stay strong because the top 20% of income earners account for a higher percentage of total consumer spending than the lower 60%.

Second, share buybacks from a broad range of firms may help soften the blow of weaker share prices. Some of the companies with sizable pending buyback programs are P&G, Home Depot, Nestle, Wal-Mart, ConocoPhillips, UBS, Bank of America Johnson & Johnson, JP Morgan and Walt Disney.

Third, corporate earnings seem to be rather firm. According to data from Thomson Financial, earnings per share for S&P 500 companies in aggregate are expected to rise 8.1% in 2007 and 11.5% in 2008. For the MSCI World index companies, the number is 13.2% for 2007 and MSCI Asia is even stronger at just over 18%.

Fourth, corporate balance sheets in aggregate have improved. The net debt of S&P 500 companies has fallen 11% since 2001.

Fifth, there is now a wide expectation that the Federal Reserve will cut interest rates next month and central banks around the world have demonstrated their willingness to take actions to inject liquidity and calm markets.

Sixth, valuations in the U.S. and around the world do not seem overdone to me. The S&P 500 is trading at 16 times earnings and international markets, with the exception of Indonesia and India, appear undervalued. Ireland, Germany and the UK are trading at 11 times, the Netherlands at 10 times, Sweden and Singapore at 12 times and Mexico is trading at 13 times earnings.

Lastly, many global companies are increasing the proportion of their total sales to emerging market countries and economic growth in these fast-growing markets seems to be alive and kicking. The major themes driving this growth which has averaged well over 7% in annual terms over the past five years seem clear.

Economic market reforms, openness to foreign capital, better balance sheets and fiscal discipline leading to higher credit ratings and bulging FX reserves, urbanization leading to higher productivity, and the ability to catch up more rapidly due to breakthroughs in technology and communications have all helped emerging market countries catch up fast. The world is truly filling in leading to tens of millions moving from poverty to the middle class.

Indeed it appears that sophisticated global ETF investors are not backing away from international and emerging markets.

While the S&P 500 Index is up 11% this year, Chartwell ETF Advisor picks have done much better. Brazil (EWZ) is up 62%, South Korea (EWY) is up 36%, Germany, up 32, and Singapore (EWS) is up 35%.

Bottom line: Keep healthy cash positions for flexibility and use dips in markets to accumulate shares in high quality U.S. and global ETFs that have strong currencies and that have demonstrated fiscal discipline and a commitment to market reforms.

Translation Industry and the Evolving Global Marketing Scenario

Have a look at some interesting figures that the recent past has doled out. An assessment from research firm Common Sense Advisory has observed that 63 percent of global brands have reached more customers lately through an increase in the number of languages on their websites.

Localization has turned up as the 4th fastest-growing industry in the United States, according to the Centre for Next Generation Localisation.

If we look at what the US Census Bureau has gathered – a minimum of 350 languages are spoken in US homes. This is just a hint of the influx of a multi-lingual impact that other regions in the world have been embracing.

How can a brand not employ a translator for English to Spanish when targeting a Spanish customer who is looking for a product in the SEO list? Wouldn’t this user walk right past the brand if it doesn’t appear in a multilingual format across mobile devices, websites, and SEO lists?

Why does a brand tap services for translation from French to English? To make sure that a potential user doesn’t dissolve in the air just because the branding content was not served in a more comfortable language? Yet, today, despite these multi-lingual winds, about 53.6 percent of web content stays in English.

Brands have to adapt to this new multi-lingual, truly global world. And some of the smart ones are very well adapting it already.

The rise in the number of LSPs (Language Service Providers) – as many as 18,000 firms worldwide, as per Common Sense Advisory – is indication enough.

These language translation services can either offer specific segment or service like translation, localization or interpreting or they can bring a slew of accessory features as full-service providers. These LSPs would cover everything, right from translation, interpretation, web content, audio-video content features, publishing, and narration to machine translation, transcreation, localization, localization engineering, etc.

Powered with a rich pool of professionals, instead of just freelancers; and assisted with advanced technology and offerings that emerged from innovation; these LSPs are charting a new path of solutions that brands tap with outstanding results.

Overall, the translation industry has seen a clip of 6.46 percent growth recently and the journey is becoming more interesting every quarter.

Brands and businesses are coming up with new needs and potentially huge opportunities in many areas. Mobile devices, video content, subtitles, instruction manuals, app localization, software interfaces and many other upcoming areas are bursting with a new degree of demand and appetite.

It’s a time of ample opportunities but also the time for the right set of services to come and play. Shallow and sub-standard work can serve a small segment with no precise strategy but for a multitude of brands or marketers, what is needed is a full-spectrum offering equipped with deep expertise. The use of professional language translation services will make translation truly worth the effort.

It’s a global world and not just brands in the existing mediums of the web, branding collateral and advertising need the support of translation expertise but also brands that are nascent or about to incorporate extensions like apps, mobility or IoT in an unprecedented way.

Language translation service providers with the right resources, skills and experience can push the lever in the right direction. They can bridge the distance between businesses and new age customers, no matter where they are – on a website, on a road, in an aisle, on a mobile app, or simply, on Google looking for a rival brand.

Translation is not a quick fix but a deep and overarching strategy about branding for the new millennium. There is no way to cut corners or do it in a lazy way. Get it done from the best in the industry as this could define the future of your brand in overseas markets.

Business Globalization

Globalization is the ever-increasing process of integration of local and regional markets into one unitary market of products, services and capital. The main results of this process have been an increase in the interdependence of traditionally national markets on the macroeconomic level and the internationalization of corporate processes, especially production, distribution, and marketing, as well as the adoption of international business strategies on the microeconomic level.

Economists recognize the early signs of globalization in historical phenomena, such as the increased economic activity in the Age of Discovery in the 16th and 17th centuries, which led to the founding of the British and Dutch east India companies; and the new economic opportunities enabled by the scientific discoveriesof the 18th and 19th centuries, followed by the 20th century’s breaking ground on the Information Age. The World Bank identifies three waves of globalization, which happened between 1870 and the 21st century. The origins of the process are attributed to the falling costs of transport and the lowering of the politically-driven trade barriers. Trade in commodities developed into trade in manufactured goods. Initially land intensive production became labor intensive. Mass migrations for work became an everyday phenomenon, traveling becoming easier with the development of the more advanced transport technologies. The telegraph allowed more distant countries to benefit from the capital available on the stock exchanges, as stock exchange institutions were brought to new locations, contributing to the growth of financial markets. Two world wars blocked international trade as individual countries turned protectionist. The situation persisted up till the 1980s, by which time the international exchange between the developed countries was largely freed from the barriers, leaving the developing world outside of the free trade market. It was during the second phase of globalization, when the countries started to specialize in production and the businesses started to function around agglomerations and clusters, that economies of scale started to matter. A discussion on the wealth inequality and the rising poverty in the developing countries started, resulting in the postulates to allow all the nations to participate in the benefit of a free trade. Interestingly enough, the inequalities of the early globalization era in the 19th century were largely related to the ownership of the land, crucial both for the commodity trade and for the manufactures. However, the inequalities during the second phase of globalization showed a more systemic nature, being driven by the protectionist policies of the developed world. The third wave of globalization brings the “death of distance” in a traditional geographical sense. It does not matter any more whether the whole business process is situated at the same location, as the service and non-core functions, thanks to communication technologies, can be successfully performed even on different continents. The third wave of globalization created off-shoring locations in central and eastern Europe and the new, previously developing, economic empires of India and China. Although some of the former developing countries broke their way to the free market and compete successfully for the investments, others remained marginalized and are becoming even more excluded from the benefits of the world economic growth, than ever before. One of the most striking examples of poverty levels and inequality are in the region of sub-Saharan Africa.

The relationship between economic, social, political and cultural aspects of globalization is visible in the main determinants of globalization, which can be attributed to various spheres of human activity. They include but are not limited to digitization, which enables easy distribution of data, information and knowledge paired with a parallel advancement and accessibility of communication channels, especially the Internet; development and internationalization of mass media, which creates certain convergence of consumer patterns (e.g., mass accessibility of TV such as MTV makes the icons of contemporary pop culture such as McDonald’s or Barbie the symbols of capitalist world, which developing societies demand, aspiring to the Western style of life; moreover increasing capital consolidation in the sector of media enables the formation of media empires, like Rupert Murdoch’s, which allow a relatively small group of opinion-makers to influence whole societies); increasing cross-border and overseas migration trends, caused by people’s urge to improve their lives and economic standing; longing for freedom in those countries, which suffer internal oppression either from the ruling class or from any other form of political or economic regime; this enables the democratization political systems and in consequence the introduction of economic liberalization and popularization of the free market philosophy (e.g., the spectacular transformation of central and eastern Europe countries from centrally planned economies to the free market); advancing skills of global management allowing entrepreneurs to operate in the wider geographical scale (a new category of companies, called transnational corporations, is both a consequence of globalization processes and a response to increasingly tighter competition, stimulating global dispersion of corporate influence, management methods, production patterns and technologies); convergence of various economic orders toward a free market and liberal economy and, in consequence, a creation of the unified economic model-the only acceptable economic philosophy; technological advancement and dynamics of innovations with their net effects such as a quicker use up of limited Earth resources; this in consequence creates new organizational behavior patterns (i.e., business sustainability, where business models are created on the basis of energy savings and social responsibility); new rules of international labor division and, in consequence, creation of geographical competence centers (e.g., information technology [IT] services in India); centralization of purchasing by global clients and the economy of scale, which is a direct motivation for global expansion (unit production costs are significantly decreasing with a growing share of B&R, marketing and promotion costs in a total cost of production); standardization of production and services being a consequence of adopting certain strategies on the global market (a classical example of such standardization is presented by the quality measurement norms-series ISO-certified by independent bodies such as TUV; getting a certificate, which is determined by adopting standard procedures in the organization, often determines whether the company can obtain good contracts as the big companies with large international networks of suppliers and distributors often select partners for co-operation on the basis of quality certificates possessed); less restrictive trade tariffs; strategies adopted by transnational corporations, which aim at gaining more competitiveness on a wider market and which change the rules of labor division as well as internationalization of production process as a result of the complex network of relations between corporate branches in many countries.

Among the strategic decisions of enterprises, two have significant gravity in terms of their ability to force further globalization. First, mergers and acquisitions that contribute to enlargement of organizations per se. Second, off-shoring, or locating some business functions and processes in countries that offer cost reductions without compromising on the quality of the service. Enterprises forced to compete in a tighter and more challenging market seek strategic assets, which are often purchased through takeovers of other companies or through various forms of mergers. Increased mergers and acquisitions activity can be characterized not only by an increased volume of transactions, but also by its significant dynamics (measured by scale of change as compared to the previous year). It is one of the main stimulators of globalization and a response to more demanding and challenging conditions for competition (companies are looking for foreign markets, which are often less saturated than those of the enterprises’ origin, however, as foreign markets accept more players and in due course become a global market, entrepreneurs must compete through taking over the strategic assets). In 2006 the value of assets acquired by purchase or through takeovers reached $88.5 billion globally in almost 7,000 transactions. Off-shoring (or near-shoring in the case of locating operations in the countries in a close proximity to the home country) is a strategic trend stimulating foreign direct investments. Enterprises are largely driven by a paradigm of cost reductions these days. They can achieve it by locating their service functions and non-core activities in the countries that offer significantly lower labor costs and a decent level of skills at the same time. Key criteria used in making such decisions are: local economic and political stability, infrastructure, labor market and the level of education, language attainment, and the real estate market. A typical off-shored operation includes call centers and shared services centers, hosting mostly the IT, administration and accounting functions. As such investments bring many new jobs, they contribute to the growth of local economies.

The most competitive locations, in terms of labor costs and overall investment climate, attract great numbers of investments and as the local market saturates, wages start to increase in a natural way- stimulated by the demand-supply situation. At the same time, local governments tend to encourage the investments i the more complex and sophisticated processes to benefit from a transfer of knowledge and perhaps technologies as well. More sophisticated jobs require higher wages and as the local markets develop toward maturity, as the hosts for off-shoring operations, enterprises move on to the new, less-saturated locations, where they can benefit from the lower costs again. This specific form of colonization is also a part of the globalization loop, where transnational corporations are the reason and the result of the process at the same time. Last but not least, a change in the very nature of competition remains to be mentioned as a key driver of globalization. Geographic regions compete for resources, for example for the capital and external financing opportunities on the global market. Together with liberalization of capital transfers, new opportunities for obtaining external financing for the projects became available. Companies do not need to apply to banks anymore; they can raise the capital directly on the market, for example through the emission of stock. This phenomena changed the core role of the banks as the sole capital providers. Banking institutions now need to diversify their activity in order to stay competitive. Regions also compete for the investments, specifically foreign direct investments (FDIs), which bring new technologies and jobs. Globalization should be analyzed in the macroeconomic context-as an aggregated phenomena taking place in the global scale, and in its microeconomic context-at the level of individual enterprises, adopting certain development strategies and making strategic decisions (e.g., locating elements of a value chain in the countries with local advantages or centralizing them in one location). Economic globalization stimulates a significant institutional evolution. Global institutions are set up to manage certain aspects of activity in the global marketplace. They are equipped with both political and economic tools to control and influence the global market players. The most important include the World Bank, International Monetary Fund, and World Trade Organization.

Use VoIP As Marketing Tool

IP-Telephony literally changed the way we communicate. Traditional telecommunications companies like pressed the panic button and forced to launch their own voice over ip service. Internet telephony is no longer the cautiously protected secret of computer freaks it was before. With voip it is easy to bring your business confidently to the global market.

Initially Voip was launched as an IM PC tool with voice as an added feature. Within a very short time it became popular for making calls over the net.

In consequence Voip providers, e.g. like Skype, Vonage and Lingo, build a communication network of thousands of PCs connected to each other owned by people like you and me.

The purchase of Skype Technologies by the Internet auction leader eBay for an incredible amount of $2.6 billion unveils the potential of the power of this technology.

How do I benefit when using Internet telephony

You only need a microphone and speakers to call. The call quality is of high quality in most situations.
Most people are sure they know what Internet telephony is.
They know how to make free calls with a PDA, PC, iPhone or laptop over the net.
But voip is much more than to call over the Internet.
With additional software tools it becomes a powerful marketing tool.

VoIP services has some value added features like

  • call waiting,
  • call routing,
  • three way calling,
  • teleconferencing,
  • videoconferencing,
  • fax capabilities,
  • call filter options,
  • return call

Voip provides you with the facility of forwarding the call to a particular telephone number and gives you a busy tone and play a message.

Redirect your calls to your voip number no matter where you are. Than redirect the call to your landline phone or your cellular phone.
Sell your ebooks e.g. in Australia and ask for a local number. When you answer the call with Voip on your cellular phone no one will know that your are sitting on the porch in your garden in Chicago.

The real power of voip lies in the additional software tools.
Voip makes a phone a versatile tool not only for business owners.

Export Your Services Overseas: Compete Globally and Grow Your Market

While following up on a trade lead recently, I was reminded of how American products and services are viewed by most countries in the world as being of first-rate quality and consistency. A buyer submitted a request to purchase baking ovens in the next two to six months. The manufacturer who I procured to fulfill the order needed clarification on how the ovens will be used and where in the world the items will be shipped.

I called the buyer to verify the kind of ovens, how many shipments per year, etc. After providing the requested information, the buyer went on to say that while their company often imports from China, shipments can be unreliable, delayed, or of poor quality. In contrast, the buyer says that American products are known for their dependability, performance, and consistent delivery of their products and often meets or exceeds expected quality. I don’t know about you, but I was very proud to hear that. So I challenge all America small businesses to: Compete Globally. This one phone call was an affirmation of American products and skills – at least in my eyes – on the global market place. As a matter of fact, when it comes to exporting quality services overseas, America is second to none. The service sector is where many small businesses seeking to expand its market base, may find success.

While exporting your company’s service maybe more difficult than exporting a product, America is known for its leadership in technological advancement, banking and insurance, as well as broadcasting and entertainment. Exporting a service is more difficult due to services being an intangible product. It’s more difficult because overseas buyers may find it more challenging to secure loans to purchase services. But difficult or challenging in this context means doable, it does not mean impossible. If you have a website, then your service is already available to global customers. A website gives you the possibility to take and process orders from customers in Canada, Australia and the United Kingdom, to name a few. Translating your website to another language nowadays is easy, making it possible to enable your Webstore to interact with customers’ in their native language.

Here are Five Service Exports with Potential for Success

•Green and Environmental Services: Green goods and services have taken off here in the US, and therefore, there will be an increase in demand abroad for services related to renewable energy and energy efficiency (RE&EE). Providing your technological know-how and expertise to global economies is a great way to broaden your horizons, and at the same time increase your customer base, which of course increases your company’s bottom line.

•Banking, Financial and Insurance Services: According to the A Basic Guide to Exporting, companies operating in this market segment exported $52 billion in 2006. Some of the areas where your company can provide services and compete effectively are account management, credit collections, underwriting, risk evaluation, and insurance.

•Travel and Tourism: Is the largest market for the United States service sector, with earnings of $86 billion in 2006. Your company can provide recreational services, lodging, transportation, and refreshments to tourist.

•Education and Training Services: If your company provides management training, then you can provide these services to overseas companies. English Language training services should also do well due to the English being the International Language of businesses world-wide.

•Professional and Technical Services: Globally, American companies are looked at as pioneers and leaders in this sector. Services such as: Accounting, management consulting, legal should be able to expand their services successfully to a global market place.

In conclusion, competing globally puts your business at an advantage, not only domestically, but internationally as well. Forcing overseas companies to compete in their own backyard, translates into less competition from them here in the U.S. But also, be proud of your expertise and knowledge, export your talent; your small business is still the standard barer of excellence and quality world wide.