‘There is Always Opportunity in Crisis’
The coronavirus outbreak understandably has everyone concerned, but Yasunobu Kyogoku, founder of Innovation Global Capital, is one guy who’s seen this movie before.
“The extent to which the China production base is so integrated into supply chains of American retailers is rather astonishing,” Kyogoku said. “We really don’t know the full extent to which this coronavirus might hurt revenue or earnings of many retail companies.”
However, as Kyogoku reminded news site Cheddar, this isn’t the first disease to roil the international economy. When he was CEO of Japanese retailer Uniqulo, he saw a similar impact from SARS in 2003. Afterwards, dependency on Chinese manufacturers increased. With hindsight, that probably wasn’t such a good thing.
The current crisis is a wakeup call for organizations to diversify their supply chains, Kyogoku warned. “Dependency on any one particular source of revenue or materials is often a risk for the business, so hedging those risks is very important,” he said.
Kyogoku observed that some supply chain sourcing has already migrated from China to other Asian countries. “There is always opportunity in crisis,” he noted.