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Critical Thinking

A crisis has hit. Now what?
June 1, 1999

Capitalizing on what appears to be an excellent expansion opportunity, your up-and-coming business launches a venture in an emerging market. Before that effort can reach the black, however, something goes wrong . . . terribly wrong.

In one extreme case, when a tea importer with a facility in Rwanda got caught in that country's bloody civil war--during which several of his local employees were slaughtered--he had to close down his site until the violence was over. Hopefully, that won't happen to you. But you might face a more common crisis. What if, for example, something goes haywire in a country's economy and its currency is devalued? Importer-exporter Robert D. Hisrich ran into that problem in Russia and was forced to considerably scale back his operations there. Regardless of their situations, the tea trader and ruble victim faced the same dilemma: What should they do next?

If you ever face a similar situation, you'll be in deep trouble if you haven't come up with an answer ahead of time. "Before you enter an emerging market, you need to have a contingency plan," says Dave Schmieg, CEO of Diginet Americas Inc., a Washington, DC-based firm that provides broadband, wireless telecommunications to businesses in Latin America. "You need to determine what you're going to do even before you see a downturn coming."

Schmieg has good reason to be concerned with economic upheavals--his company does 100 percent of its business on foreign shores. Already established in Argentina and Colombia, Diginet is currently building networks in Brazil. While Schmieg says his firm is prepared for just about anything, he finds many U.S. companies are completely unprepared for overseas instability. Should an economic crisis impact your business, here are some proven steps to take:

Christopher D. Lancette is an Atlanta-area freelance journalist who covers small and international business topics for local, national and international publications.


Contact Source

Diginet Americas Inc., (202) 274-0040,