THE THREAT POSED BY POLITICAL INSTABILITY ON GLOBAL SUPPLY CHAINS
Case Study: Egypt and the Suez Canal
Political Instability and Global Supply Chains
Since the Egyptian Revolution of 2011, Egypt has seen one president stand down, the Armed Forces take control, a newly elected president removed from power, an interim president appointed and a new president elected in 2014.
During the 2011 uprising, there were demonstrations, riots, strikes and violent clashes across the country, particularly in Cairo and the Port of Suez.
Throughout this period of instability, governments across the world expressed their concern about the continued operation and security of the strategically important Suez Canal which is owned and maintained by the Suez Canal Authority of Egypt.
This Case Study is used to assess how political instability in one country can potentially disrupt global supply chains and what action can be taken by those parties affected to miminise the disruption.
1 The Suez Canal’s Vital Role in Supporting Global Trade:
Anlayse the significance of the Suez Canal with regard to the role it plays in supporting global trade and assess the benefits it provides to suppliers, shipping lines and consignees that are engaged in shipping goods through the Suez Canal. (10 marks)
2 The Impact of the Canal’s Closure on GCC Exports and Consumers of those Export:
Assess how the closure of the canal would affect exports from the GCC countries and the likely impact that this would have on those countries which are reliant on those exports. (10 marks)
3 The Impact the Canal’s Closure on Imports to the GCC Region:
Assume you are the Middle East’s Regional Managing Director of an international fashion chain, ‘LookSharp,’ that has its Regional Distribution Centre in Dubai. This Regional Distribution Centre supplies the company’s fashion items to retail chains across the GCC region via distributors located in each of the GCC countries.
Your products are manufactured by suppliers located in Mexico, Spain, Italy, Thailand and China. Goods are transported to Dubai by sea (imports from Mexico, Spain and Italy passing through the Suez Canal).
(a) Make an assessment of what options you could consider to protect your supply chains if it was anticipated that closure of the Suez Canal may occur within a matter of weeks and what options you could consider if the canal was closed for a lengthy period. (25 marks)
(b) Identify the likely commercial implications of pursuing these options? (10 marks)
A further 15 marks for overall clarity, conclusion and recommendations
Assignment length, maximum 3,500 words.
Below 3,000 words is not likely to have responded to the Assignment Brief in full.
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