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Thursday, November 3, 2011

Waiting in the wings: Energy’s influence over the next several years

Observation:  Over the past few years, I’ve written more than fifty postings that have something to do with a body of work we call The Fuel Economy (click here to review the topic).   The over-arching premise is that world energy prices, eventually, can be expected to rise due to expanding economies across the globe, which will almost certainly result in increased demand.  Today, I’m in receipt of a new McKinsey report that seems to parallel that line of thinking, and it’s a very worthwhile read if you run a business.  Click here to see it.

Implications:   Oil prices may have a direct impact on the consumer who frets about the cost of her/his commute.  But energy also impacts the price of anything that is grown, manufactured or shipped… from groceries to home furnishings, from clothing to building materials. 

Have you given any thought to how your business will position itself if or when the prices for your goods and services become more expensive?  How much of that higher cost will you be able to pass along to the consumer?  How much of a price increase will your customers tolerate?  Could higher prices in other business make you a contender in new categories of business that you’re not even thinking about now?

The best response to rising energy costs will come from those businesses who saw it coming years before it happened.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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