The similarities between geopolitics and business strategy can be seen in the ongoing Ukraine-Russia war. I have picked two examples – food and oil sourcing, export, and trade.
Ukraine and Russia were major producers and exporters of cereals. The war has disrupted supply chains causing a reduction in available food in the market. Before the war, the available supply was outstripping demand. Prices of agricultural commodities like cereals often dropped to unsustainably low levels causing farmer distress in food-producing countries. Countries like India, where food production and prices were below the market price, suddenly found themselves in a position to enter this market.
Even though the market demand was high, India could not sustain to meet this demand without jeopardizing food security at home. It, therefore, withdrew as a food supplier. The move attracted considerable criticism in the US media.
A similar story unfolded in the oil market. The disruption of supply lines and the US sanctions against Russia, with some reluctant support from its allies, led to a massive jump in oil prices. India found buying oil from Russia attractive. Russia offered oil at huge discounts. Russia finds willing buyers for its oil from China and India. This has made oil sanctions largely ineffective. Russia sees that it can continue the war against Ukraine despite massive financial and military support to that country.
The business interests of countries like India and China dictate their global business strategy. The oil and food commodities sourcing and export strategies have had to be changed to meet global geopolitical-induced disruptions to the supply of critical commodities. Business interests required these countries to buy commodities at the lowest price. The decision was taken after accounting for business and geopolitical risk.
Both the case of Russia’s decision to continue the war and the decision of India and China to buy oil from Russia were business decisions. These decisions are, in many ways, similar to that of corporations. The principles of business strategy are proving to be true for corporations and countries. The similarities between geopolitics and business strategy could not have been starkly similar.