Israel Business Management

I have started a new, general focus, blog. Here is the URL - http://overlookingbethlehem.blogspot.com/

So, I have started a new job, which has left me less time for blogging. I will not let this die, but I will not be able to post with the same frequency, at least for the next few weeks.

Going through the onboarding process in a new company (HR, training, meeting new people, learning new processes, etc.) gives some new thoughts to posts for the future.

I love learning new things - whether products, companies or meeting new people. It gives a new frame of reference to the experience and thoughts that I have had up until now.

The new experiences together with my history and previous endeavors will lead to more posts about my thoughts on the business world, in general, and the Israeli hi-tech market, specifically.

I can share this to those that are looking for a job in today's tough climate - there are jobs out there. Remember, that you are selling a product - you. The customer is the company that you are interested in joining. You need to be diligent in learning all you can about them, so you understand their needs and how you, the product, can help them meet those needs.

More details to come on the new job, but I am not yet ready to share all the wonderful details.

Last week, Tadiran announced its intention to move its manufacturing out of Israel to China or somewhere else in the Far East. The days of cheap labor in Israel are officially over.

Companies are looking for methods to survive the economic downturn and the laws that are on the books and the ones that have been proposed make it hard for companies to justify continuing to have labor intensive jobs done in Israel.

The local goverment and the cheap labor markets have made the decision easy for any manager.

So, what can be done?

The Knesset, first, needs to admit that there is a problem. Until that happens, there will be no resolution.

Once that takes place, the government can give tax breaks to companies that bring jobs back to the local market, like the repatriation tax break that was passed in 2004. This may jumpstart the local job market, by increasing the amount of jobs that are available today. A company may now see some cost benefit, due to the tax incentive.

The Ministry of Trade and Industry can start a "Buy Blue and White" campaign to promote goods that are made by local labor to Israelis.

The government can pass incentives or law to only allow government procurement from Blue and White companies.

Would you buy Blue and White, even if it costs a little bit more?

Let me know your answer and any other ideas you have of how to insource more jobs to Israel.

The dollar has dropped significantly against the shekel in the past few months from over 4 shekels to the dolar down to 3.8 currently.

What does this mean? It means that when Israelis go to the US to do shopping, they now have more buying power as their shekel has gained strength against the dollar (and US goods are all priced in dollars). It means Israelis can afford to travel more as the prices of most airlines are in dollars (except for El Al Airlines) and the prices have actually dropped as the shekel got stronger.

But is it all rosy?

The answer is clearly no.

When the dollar drops, one of Israelis biggest industries, tourism, takes a hit. Because the American visting Israel is only getting 3.8 shekels for every dollar he changes, he can buy less than he could last year when the dollar was over 4 shekels.

So, the tourists may choose to go elsewhere, where the local currency is not as strong against the dollar. Or, they may just choose to stay at home.

Companies with their headquarters in Israel, but have sales offices in the US, also suffer. Last year when they sold their goods and then changed the dollars into shekels to pay their expenses here in Israel, the dollar went further than ot does today. So, a company has to sell more in dollars today to make up for the difference in the exchange rate. All because the expenses in Israeli are paid in shekels.

Exporters have been hit hard as they also have the same costs they had before, but get less when they trade in the dollars.

So, as the government struggles with what to do to help the local economy, those Israelis looking to travel to the US, should have more fun shopping, knowing that they can buy more stuff this year than last.

I have been on the road for the last week or so. It is very interesting to see how the world has changed due to the Internet and the economy.

I stayed at a Hyatt last night in a room booked on Hotwire. The room rate was around $70, but if I had tried to book it directly, it would have been $150+ per night.

The Internet has commoditized most of the items we buy. Plane tickets, hotel rooms, rental cars, groceries, etc. All of these can now been researched online to find the cheapest price.

The economy has driven us to search even more carefully on the Internet. Where some people may have given their business to a travel agent, now, a buyer can do the research by themselves and save even more money by cutting out the middle man.

What is next?

In the past, we have had posts about Twitter and other social networking sites. The question that was center of mind was how does this apply to business.

It seems that an Israeli firm is ready to answer that question.

TwitterAnalyzer, an Israeli start-up, helps individuals and businesses get useful data about who is following them, what countries are they from and has useful graphs depicting activity.

Think of it as the Google Analytics for Twitter. Today, every web site is using Google's tool in some fashion (though other paid for tools may be used for incremental information.) Twitter Analyzer could be the same for Twitter (and there is no reason to assume that it would stop there - each social networking site would be the same.)

With a tool like this, businesses can start to take advantage of social networking, as they will have actionable data for their marketing department to analyze. The company can then tailor its social media message to the visitors and the geography.

Social Networking may have just gone corporate...

Are we seeing the end of the recession, have we hit the bottom or is the worst still to come? Looking at recent headlines in Israeli business newspapers, it is still difficult to tell.

Cisco announced earlier this week that it would be laying off 700 additional employees in their corporate headquarters and an unreported number from Cisco Israel.

Flash Networks announced that they will be laying off 25% of their workforce. Is that a generic sign of economic weakness or is it specific to the telecommunications industry?

SanDisk reported a profit for the first time in a year, but gave a grim outlook to Wall Street.

The mixed news makes it hard to see what the future will hold.

I believe companies will play conservative with minimal hiring, keeping a firm hand on any variable expenses and continue to look towards a brighter future. We have not hit the time (yet) for loosening the belt and further hires (on a grand scale) with economic growth.

But, I am optimistic that we can see the light at the end of the tunnel.