Last week, I spoke with a German oil and gas industry executive about the growing role that energy plays in international business. From this conversation and others, here is strategic advice around this critical topic for entrepreneurial companies in international markets:
Know the Global and National Energy Issues
- Is your country energy an energy exporter or an energy importer?
- Does your country actively support green energy technologies?
- Does your country subsidize oil and gas prices?
Your perspective may be greatly influenced by how your government and business culture is positioned for more carbon or more green energy use. A country which subsidizes energy costs may help put their domestic companies at a competitive advantage in world markets. This includes Mexico, Venezuela, Libya and the United States. Countries such as those in northern Europe, as well as Canada, China, and Australia are working to develop and install solar, wind, hydroelectric, and biofuel technologies. Such countries may be motivated to reduce pollution and greenhouse gases. It is important to understand the issues around energy usage and what role both your own country plays as well as countries where you do business.
The Trend is Toward Cleaner Energy
As you look at your own company’s energy sources and usage, keep in mind that most of the world is in some stage of increasing investments in greener energy sources while working to become more efficient and use less energy. As your company looks to expand into new international markets, anything that can reduce both energy usage and carbon emissions will be an important part of your positioning to potential partners and clients. Be prepared to answer questions about your current and future expected energy usage, as well as your energy sources.
Adjusting Cost Structure
The German executive I spoke with remarked at the lower prices for everything from fuel to food while visiting the United States. This is certainly true, but the higher energy costs for greener energy are reflected in higher costs for products and services in European countries. Entrepreneurial firms can shift the costs of renewable energy usage on to consumers while protecting their product/service market share from local competitors who may already use greener energy sources.
Opportunities for Efficiencies and Cost Savings
Countries focused on renewable and cleaner energy sources are also full of ideas for ways to cut back on overall energy usage. This makes a great deal of business sense since companies pay for every kilowatt hour of energy used, regardless of the source. Reducing energy use can include measures like replacing inefficient light bulbs and creating energy usage policies for company employees. Your company can track not only the cost savings, but the energy savings month-to-month and year-to-year to add to your energy improvement picture. This can be shared with prospective clients, partners and governments in countries where this issue is a high priority.
As time goes on, more and more countries will expect your company to be energy efficient and conscientious about its energy sources. Getting on the front end of this particular trend will have long-term pay-offs in international markets.
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