Problems in Business
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Over the last few years, Egypt’s reputation as a global business hotspot has greatly increased. Large and medium businesses have expanded their capital involvement in the country to have a share of its lucrative market. This rush for Egypt’s market can be attributed to steady economic growth, favorable business environment, relatively low production costs, and sound economic policies. However, since the resignation of Hosni Mubarak due to public revolts, the country has never been the same for investors. I would like to draw your attention to the fact that the prospects of doing business in a particular region may be very attractive, but investing in such a region could be disastrous if the region is characterized by political uncertainties. Political environment has a big impact on distribution, sales, and promotion of a company’s products (Saber 102). Therefore, every company that desires to invest in a foreign country must keenly monitor the political climate of the country and consider the possible effects of change in government. This is because business policies and attitude towards foreign investors change with a change in government. These changes can be either in favor of foreign investment thereby offering attractive opportunities or against it thereby introducing stringent measures such as import quotas and increased taxes. A host country’s political stability plays the biggest role in investment decision. Any threatening political activity may push investors out of a country’s market. Political instability indicators include continued demonstrations, violence, labor disruptions, and frequent regime change, which are now all characteristic of Egypt.
I must acknowledge that our water solution products such as Desalination, Water Recycling, Potable Water Treatment, and Wastewater Treatment have been posting impressive financial results over the last few years. Our projections for the next five years are equally impressive. Attaining these positive results has not been an easy task. It took us over 10 years to establish ourselves in this country. With public good will and support, we can proudly say we are now the leaders in water solution in this region. It is a fact that no business can be successful in any region without public support. Even though municipal councils, town councils, and the national government form the bedrock of our customer base, our household customer support has been on a steady increase over the last five years. Today, our household products such as water pitcher, RO Drinking Water System RM18, and Gurgle Tap Filter generate 20% of the company’s revenue.
If the violence meted against the public is not stopped, the company stands to loss in many ways if we continue operating. First, if sanctions are imposed, government’s earnings will definitely drop. Considering that the government and its local counties comprise 80% of our customer base, our earnings will be absolutely interrupted. Secondly, sanctions will hinder us from importing raw materials from other countries, which will absolutely affect our production process. Additionally, we may loss the public goodwill, which has propelled us to these heights. If it could get worse, our premises could even be torched or vandalized by angry mobs.
Halting operations could also have its implications. By halting our operations, we shall have sent a strong message to the government that we do not support its policies and actions. Considering that, the government formulates policies and regulations guiding businesses operating in any country, and that the government issued our license of operation, we will be putting our business in the firing line. Worst still, we will be risking our 80% earnings from the government and its counties. Mot importantly, being the leading water solution provider in the country halting our operations could lead to wide spread suffering of innocent citizens. Water is essential and denying over 70% of the country’s population who we serve with water, water services, is both unacceptable and unreasonable. Businesswise, our withdrawal may see our competitors gain a considerable market share, which could be hard to recover when normal operations resume.
Making a decision on such a matter is not an easy task. However, a time comes when regardless of what is morally right; we have to do what must be done. In this situation, the only viable and reasonable thing to do is to continue with our operations for as long as possible. This is the only way of averting another crisis by denying the public water solution services, which they absolutely need, while at the same time keeping our company on the right books with the government.