Global

Business Strategy and Natural Disasters

Executive Summary
Natural disasters not only affect the area it strikes but it also causes an impact on global businesses
around the world. Some examples of natural disasters are earthquakes, droughts, floods, forest fires,
tsunamis and tornadoes. Due to the unpredictable nature of some natural disasters, they can cause
even greater damage to global businesses. The damage of a local area struck by a natural disaster can
spread to places across the world. Everyone is affected. Natural disasters cause economic loss and
infrastructure loss thus affecting global businesses. Based on the components of economic loss and
infrastructure loss, we have separated the damage of natural disasters on global businesses into three
separate components of manufacturing damage, the damage of supply and chain and the impact on
sales.
Natural disasters directly and indirectly impact and damage manufacturing processes. The direct
impacts of natural disasters on manufacturing processes are that manufacture factories cannot product
and manufacture foods, and that natural disasters may damage the inventory of the manufacturing
factories. Natural disasters indirectly impact the manufacturing process by negatively affecting the
material supply, power source and employees of manufacturing factories. Global companies may
counteract these manufacturing problems before and after the disaster. Before the disaster, companies
can anticipate and prepare for natural disasters by building their manufacturing facilities in low natural
disaster occurring areas, buying insurance, building stable and protected facilities, distributing the
location of manufacturing facilities, preparing their energy resources in advance and setting aside a fund
for paying the costs in the case of future natural disasters. During and after the natural disasters,
companies can provide aid and help to their employees while also searching for raw material sources
elsewhere. These solutions can help to continue in as smooth of a flow as possible for manufacturing
processes.
Natural disasters also affect the supply chain of a company. The impacts are but not limited to
destroying the natural resources and raw materials, causing transportation issues in transporting
materials and goods, and causing inventory loss of goods. Before the disaster, companies can plan what
to do in the event of a natural disaster. Companies can uphold close communication and information
flow regarding disaster forecasts. They can also have a diversity of suppliers and marketers. Companies
can partner up with other companies and work together as a team in the face of a natural disaster.

During the natural disasters, the companies can provide care for their supply and chain employees, find
raw materials elsewhere, use different transportation routes, and receive and provide help from the
customers and local people. After the natural disaster, companies can reconstruct supply chains while
building temporary new ones, allocate their employees to places in need of help and also partner up
with other companies to work together in integrating their supply chains.
Natural disasters also affect the sales of global businesses. Natural disasters positively impact sales by
increasing the demand for necessary items. They also enable businesses to increase their product prices
by increasing the scarcity and demand for items. Not only do natural disasters positively impact the sales
of certain items, but also they also negatively impact the sales of products. Natural disasters can cause a
decrease in the demand of inessential products and also affect the buyers themselves or the buyers
purchase intention. Some solutions in fighting and using the impacts of a natural disaster is to use this
opportunity of disaster to boost the companys image, increase stock shares, increase consumer loyalty
and transform the customers into walking advertisements.

Part I: What is it? -- Background Information About Natural Disasters
Natural disasters are natural events that cast huge damage in affected regions. Natural disasters may
affect a damaged areas economy, population and social stability. The most notorious characteristic of a
natural disaster is its unpredictability. Our lack of ability to predict when and where natural disasters will
strike greatly intensifies the damage caused by natural disasters.
Once a natural disaster strikes, local problems such as refugees, scarcity of emergency supplies and
social disruption crop up. But how could we, a global business, be affected by a natural disaster, which
occurred thousands of miles away and even on another continent?
Economic Loss
Natural disasters are costly these days and continue to increase in their damaging costs. Chart 1 shows
the number of global billion-dollar loss events by region from 2003 to 2013. In the year of 2013, natural
disasters cost a total of $192 billion. The Top 10 of the most severe natural disasters added up to a huge
economic loss of an astounding $100 billion, accompanied by about $12 billion insured loss. Another
critical factor that incurs significant economic loss is stock market fluctuation. A destructive event could
deeply hurt the publics confidence in economic growth, which might induce severe and fast stock

market drop. In this case, every company in the stock market, however relevant to the affected region,
would undergo unpredictable economic loss.

Chart 1. Number of regional billion-dollar loss events from 2003 to 2013.

While the potential economic losses of natural disasters increases as the global market becomes
increasingly interconnected, the frequency of natural disasters is also expanding. Chart 2 shows the
regional annual average of natural disastrous events over the past three decades. This trend of the
increasing frequency of natural disasters all over the world will further the increase the size of the
negative impact on the global economy.

Chart 2. Annual average natural disaster events by region.

Corporations are affected by natural disasters through their negative economic impacts.
Financial difficulties may arise due to employee loss or inventory loss, especially if the majority of the
losses could not be covered through insurance. Investments might be completely devoured because of
failed projects. Financial instability could lead to trust issues between corporates and banks. Natural
disasters, with their massive power and unpredictability, often create integrated problems rather than
any of the individual problems listed above. Thus, natural disasters cause great severe impact on global
corporations.
Infrastructure Loss
Infrastructure loss is another form of damage caused by natural disasters. Infrastructure loss greatly
impacts business. Major natural disasters such as tsunamis, floods and typhoons destroy and damage all
surrounding buildings. Damaged infrastructures leave behind many countless number of refugees and
twisted roads. These broken roads render the transportation of any supplies an impossible mission.
Damaged and broken electric grid and telecommunication stations cause poor communication
conditions. In business corporations, manufacturers might be unable to maintain their production
because of the damaged factories and warehouses. Employees may become ineffective due to their
worry regarding their affected family members. The product distribution capacity would be severely
impaired due to the closed transportation highways. The sales would become affected with skyrocketing
demands for necessities and plummeting demands for non-essential products. An entire enterprise
could be shaken and disturbed even if the natural disaster struck an area a long-distance away from
them.
Part II: Why Do Natural Disasters Matter?
Natural disasters can occur anytime and anywhere around the globe. Our inability to predict natural
disaster events renders them extremely difficult to prevent. The economic and manufacture losses
caused by natural disaster concurrently affect different aspects of multinational corporations. When
natural disasters occur, manufacturing systems, supply chains, and sales of global businesses would
suffer differently.
Manufacturing
Natural disasters impact manufacturing both directly and indirectly. Direct impact on manufacturing
occurs when a disaster in a certain region damages the businesses manufacturing factories in that

region, forcing manufacturing plants to shut down for either short periods of time or perhaps longer
periods of time. The products manufactured in the plants will no longer be able to be produced within
the duration of these recovering shutdowns. Therefore, the profits that the manufacturing company
could have made through operations are now considered as profit loss. In addition, the financial
burdens of the company may double, or even possibly triple as the manufacturing factory has to shut
down for an even more extended period of time while corporations have to pay for facility restoration.
When the magnitude-9.0 earthquake struck Japan, Toyotas car production plummeted far below the
normal production level. The Toyotas global production in March dropped 29.9%, about 542,465
vehicles, from a year ago. Along with paying the restoration costs, Toyota lost the profits they could
have gained if they had produced cars to sell.
Natural disasters can directly affect manufacturing processes when they may damage the machineries in
manufacturing factories. Damaged and unusable components would hinder normal operations of the
plant, causing further long-term loss.
Natural disasters also indirectly impacts the manufacturing process. Even if the manufacturing factories
themselves were not damaged by natural disasters, they may still be negatively affected by natural
disaster damages. One-way in which natural disasters negatively and indirectly affect-manufacturing
factories is that they can take away a factorys power source. Power and electricity are the most
important utility needed by every manufacturing factory in the world. If natural disasters strike areas
where power sources are located, then thousands or perhaps millions of manufacturing factories will be
affected due to the lack of electricity and ability to operate. For example, the United States relies heavily
on power plants for their source of energy. As seen in the chart below, the United States depends
heavily on nuclear power plants to generate electricity. Therefore, when the power goes out due to any
natural disaster, manufacturing factories are severely and indirectly impacted. They lose their ability to
function and operate.

The employees are also severely impacted, either mentally or physically, by natural disasters. These
affected employees may hinder the smooth flow of the manufacturing system and process. When
natural disasters strike in a particular region, local employees may not be able to work in the
manufacturing plants. The damage to the community may make it difficult for the employees to go on
and continue about with their everyday normal work routine. They may have to take care of their
families and their damaged homes instead. Therefore, the manufacturing factory cannot operate at its
normal work pace to meet the production quota due to a loss of employees and manpower.
Natural disasters may also lead to a shortage of raw materials for manufacture. When a manufacturing
plant is not sufficiently provided with raw materials, then they will not be able to function in producing
their products properly, which will lead to a loss of profits and earnings. If the natural disasters hit
areas where raw materials and natural resources are located, then manufacturing plants will not be able
to gain these raw materials in producing their products. For example, when there is a forest fire,
manufacturing plants that use lumber as their raw material will not be able to produce their goods of
furniture. Many other and different types of manufacturing facilities are indirectly affected when their
raw material sites are damaged and impacted by natural disasters.
Supply Chain

The supply chain consists of all activities involved in the process of moving products or services from the
supplier to the customers and consumers. Furthermore, the supply chain is responsible for transforming
raw materials into components and finished products, which are to be delivered to the end customer.
According to Chris Zobel, an associate professor of business information technology at Virginia Tech, a
supply chain has six key parts including production, supply, inventory, location, transportation and
information. Damage to the supply, transportation and inventory of products can lead to numerous
financial losses and long-term recovery issues.

On March 11, 2011, a magnitude 9.0 undersea mega thrust earthquake hit the mainland of Honshu
Japan. The earthquake and the tsunami following this catastrophic event caused not only devastating
human and economic damage, but also heavily disrupted the global manufacturing supply chain.
Suppliers in the earthquake regions lost thousands of critical parts and this inevitably led to a loss of
revenue. Figure 1 shows the financial losses of a few semiconductor companies. The lack of raw
materials or inexpensive components in the early stages of a supply chain will eventually lead to a failure
in manufacturing and sales. Figure 2 shows the financial losses of select Japanese companies that are
further along in the supply chain. This event in Japan has clearly shown us that supply chains are
relatively vulnerable to natural disaster events. Supply chain disruption appears to be a major threat to
global business both in the short term and long term.

One of the first damages that natural disasters would incur is the destruction of natural resources, which
would interrupt the supply of raw material and components. When the supply of raw materials are in
danger, this can cast severe constraints on the manufacturing process. For example, global automakers,
such as Ford, Chrysler, Volkswagen and GM, had to place a hold on a certain paint color after the
earthquake and tsunami in Japan. The November 2011 devastating flood in Thailand destroyed several
of Hondas key suppliers forcing production delays to factories in as far as Ohio. This flood also hurt the

global supply capabilities of many high tech sectors. Intel, for example, said it lost about $1 billion in Q4
sales because the computer OEMs were unable to source the hard drives needed to make new
machines.
Another form of damage caused by natural disaster is transportation failure on ground, sea and even air.
In those cases, products will stack up in warehouses because of the closed highways or ports. Moreover,
due to the high demand for transportation of recovery services and goods, transportation priority will be
given to emergency supplies. This prioritization of transporting the emergency and recovery supplies
over transportation of business goods will further deteriorate the delays on corporate supply chains.
The last significant aspect of damage to the supply chain damage is inventory loss. Unpredictable natural
disasters have the capability of completely wiping out warehouses. Since inventories are often paid
products, corporations will have the bear these losses themselves. In the example of the 2011 Thailand
Flood, one of Hondas major auto factories had thousands of brand-new cars floating in the 15-feet
water, thus incurring enormous inventory losses.
Sales
Natural disasters can negatively and positively impact and affect the sales of global businesses. After
the news of an occurrence of a natural disaster spreads, global businesses will immediately need to
prepare, modify and adapt their selling strategies accordingly.

Natural disasters can increase the sales and profits of global business companies. Natural disasters can
increase their sales of items and products because they can create a demand for certain goods. They
create a demand for the essential products and services needed in the aftermath of a natural disaster.
These products are mostly centered on survival and medical needs of the victims. Natural disasters also
increase the scarcity of an item because they affect the manufacturing process and supply chain of
corporations thus reduce the amount of products available to be sold. This increase of scarcity of an
item can psychologically increase the demand, the sales and the price of a product.
Natural disasters cause many injuries and fatalities, thus increase the sales and need for medical
services and goods. If the injured victims require medical attention, then they must also require medical
products. There will be an increase in the demand of medical products. For example, global medical
businesses, such as GlobalHealthCareGroup, specializing in emergency staffing solutions, thrive and

increase in profits during cases of natural disasters. Their business profits greatly when natural disasters
strike because their services are needed and demanded during these hard times.

Another way in which natural disasters create a demand for products is that natural disasters can
increase scarcity of a product. If a product becomes scarce, than that scarcity will create an increase in
psychological desire for the product. For example, when Hostess announced that they would shut down
their production of Twinkies, consumers flocked to the supermarket aisles in search of securing these
soon-to-be-extinct cream cakes. Natural disasters can hurt the supply of global business products and
reduce its production availability thus increase the peoples demand and desire for the product. As
shown in the chart above, when the demand of a product is greater than the supply, then the price of
that product can be increased. Global business companies can increase their profits through the raising
of the prices of their high in demand products.
Not only do natural disasters increase the profit of some companies, they can also decrease the profit
and business of specialized product sellers.
Natural disasters can also be problematic for global businesses because they can also decrease the
demand for certain products. For example, if there is a drought, then people will not want to buy
umbrellas or rain boots. The umbrella and rain boot makers will not profit as much in dry drought areas.
These businesses may have to decrease their prices in order to increase their product sales. They will
not receive extra revenue or profit because they are lowering their product prices in order to have a
demand for their products.

Natural disasters can also injure the product consumers. Victims of natural disasters may change the
way they prioritizing in buying certain items. They may cut out purchasing extraneous and unessential
products, such as luxury bags, in the times of financial and psychological hardships brought on by the
natural disasters. The consumers and victims hit by natural disasters will decrease the amount of sales a
global business makes. The purchase of goods are highly dependent on the availability of the funds to do
so and are also highly dependent on the personal enhancements the products provide.
Not only to natural disasters affect a consumers intention of buying and purchasing products, but also
natural disasters may also directly impact the consumers themselves. If a consumer is injured by a
natural disaster, then the global company who specializes in selling to certain consumers will also be
negatively affected. For example, global companies with the lower-middle-income population as their
main customers will suffer in product sales and business. As seen from the chart to the left, over a 20-
year span, there has been an increase natural disasters affecting the lower-middle-income countries. If
the consumers are suffering, then businesses will suffer as a result as well. If certain natural disaster
victims are the main customers for certain global businesses, then those businesses will decrease in
sales and profits because they will have lost their customers.

Part III: What Can We Do? -- Our Solutions

Pre-Disaster
Manufacturing
Every manufacturing factory should anticipate and fully prepare for any potential natural disasters to
minimize damages inflicted on buildings. One way is to thoroughly search for sites to build
manufacturing facilities where occurrences of natural disasters are comparably low compared to other
places. For instance, firms that planning to build factories should avoid building near ocean, volcano, or
places where earthquakes are frequent. One of many ways to prepare for natural disasters is to have
buildings insured. Manufacturing firms should also anticipate recovery plans for the aftermath if
factories are damaged. The most basic recovery plan would be insuring buildings, so after natural
disasters firms could lower their financial burdens. Even manufacturing plants that are located in
hazard-free zones should have insurances because natural disasters are unpredictable, which can
happen virtually anywhere at anytime. On top of insuring buildings, firm should reserve some portions
of total revenues for restoration costs, which might be incurred after natural disasters. This would
significantly reduce potential financial burdens of firms; they would not have to worry about using the
astronomical amount of money at once to restore buildings. Manufacturing facilities should be equipped
with emergency generators for potential power outages due to natural disasters. In case the supply of
electricity stops, the firm can generate the emergency generators to self-supply electricity to continue
factories temporally. Also, firms should build factories in a way that buildings could endure any
hazardous situations. For example, buildings should have built-in stabilizer in case of earthquakes.
Additionally, fireproof materials should be used for interiors and as well as exteriors in case of fire. Last
but not least, firms should avoid any poor constructions so buildings can be firm even during tornado or
strong typhoon. Other ways are to evenly distribute factories all around the world, if not globally even
domestic wise firms should build factories in different areas. This would reduce the possibility that
entire manufacturing facilities getting affected by disasters. For instance, if factories are evenly built in
different parts of regions, when one factory is inoperative due to natural disasters other factories
located in other regions could increase the production capabilities to offset the production quotas of
inoperative factories. This strategy would not only be limited to direct impact on facilities, but it could
also prepare potential power outages.

Supply Chain
Planning for disaster is the first step of supply chain risk management. Prevention is always better than
cure in this case. One of the most obvious and simple procedures is to build a better communication
with disaster forecasting system. For instance, a multinational company should cooperate with local
disaster research institution in order to get first hand forecast reports. Furthermore, companies should
know all critical facilities within the supply chain that would be likely to get into emergency situation and
need resources as well as the ones most vulnerable to disasters. A step further would be building a
network that contains minimum distance secure sites. This would be extremely important creating a
functional emergency framework that requires minimum time to react. It would also be helpful with
recovery process because managers would have quick access to critical materials and be able to
construct a temporary supply chain. In addition, having a diversity of supplier and markets rather than
overspecialization would prevent chain reaction due to disruption in one part of the supply chain. Strong
supply chain partnerships will help a company to get through difficult times. In addition, supply chain
structure should be adaptable and active so that it can quickly adjust and respond to market, economic
and social demand. For example, a clearly defined company structure and department responsibility can
help reduce confusion and increase the efficiency when dealing with disruption of supply chain,
especially when it happens on the other side of the world. Furthermore, there should be emergency
management workshops in different regions globally so that supply chain manager should be able to
learn the latest emergency preparation techniques and share their experience.
During Disaster and Post-Disaster
Manufacturing
Also, when employees lives are impacted by natural disasters, firms should help their employee
recovering damages such as through aiding or temporally providing homes. Profits loss due to not
operating factories would outweigh the aids provided to their employees. Finally, firms should select
several raw material suppliers from different parts of regions to avoid dependence on only one raw
material supplier. If firms have several sites where they collect raw materials; firms can import more
materials from other dealing suppliers when one place is damaged.
Supply Chain
During Disaster: Firstly, nothing is more important than lives. Therefore, quick evaluation of life safety is
the first thing that needs to be done when disasters strike. The company should make an executive

decision of not having employees to work once they get the information of even a potential disaster.
Secondly, in order to minimize loss of raw material, components and finished goods, transportation in
certain area should be reduced. For instance, it would be better if ships going to Japan were able to stop
at safer ports until there were new orders to move to the next location. In addition, communication
should be kept intact. Open communication would not only acknowledge warnings to other suppliers
and logistics workers but also exchange information between distribution centers and headquarters and
can be the key to mitigate losses. It is also helpful to reach out to the community. Getting help from
local community and providing help to those in need is equally important. Help from local and regional
community would be helpful to reduce losses. Furthermore, most of the time, helping the community
during the disaster, such as providing transportation, would improve the cooperations reputation.
Post-Disaster: As traffic is usually intensified after the disaster due to disaster relief and humanitarian
support, business recovery is sometimes put to the second. However, even with limited resources for
transportation and reconstruction, it is not impossible to recover from the catastrophes faster. First of
all, a recovery framework, although should be planned ahead as mentioned before, should remain
flexible and adaptable. Multinational corporations need to utilize all their resources in order to
reconstruct the supply chain, while building a temporary one. One way of accomplishing such goal is
that companies would need to send extra labor to affected region and they will be needed upon a
moments notice.
Another post-disaster procedure is to learn from the losses and minimize future risks. For example, if an
earthquake that destroyed regional highway transportations caused critical damage to a corporation,
the corporation should closely analyze their own loss and construct better emergency plans in case of
future disasters, utilizing multiple means of transportation on a regular basis for example. Simply put,
the company should upgrade its own supply chain if it appears susceptible to natural disasters. Since
such supply chain upgrades often involve considerable investments, it might be more beneficial to build
an integrated supply chain through close collaboration with partners wishing to share the route. In this
case, more significant amount of funding would be available, more efficient upgrading construction
would be feasible and much cheaper transportation costs are achievable because more goods could be
shipped at the same time.

Sales

Global businesses may also use the way in how they react towards a natural disaster to boost not only
their sales and product prices, but also their company image. Companies that are able to quickly adapt
and modify their business strategies in the onset of natural disasters are viewed as more successful and
capable. This consumer view towards a company can lead to an increase in a companys market share. A
companys stock price may increase due to the stockholders belief that this company is a great
company to invest in. Companies will have built and increased their brand name and consumer loyalty
depending on their responses towards the natural disaster aftermaths and the natural disaster victims.
Consumers are more likely to buy products of a brand if they like and favor that brand. For example,
Panasonic lists its help in disaster relief for the consumers to see. They will thus increases in their
likeability and brand image. The amount of Panasonic sales will then increase. For example, if I was a
consumer who cared about natural disaster relief, then seeing that Panasonic provides disaster relief
may spurt and increase my preference for purchasing and using Panasonic products.
Global businesses may also take advantage of natural disasters in looking for opportunities to increase
their sales and profits. The use of public relations may convince and persuade customers to buy and
prefer their products. Global businesses may advertise that they will have all their proceeds go toward
natural disaster relief and this will not only cause an increase in the likelihood of selling their products,
but also increase the companys image. One example of a business brilliant use of finding opportunity in
global businesses is Tide. As seen on their website and in the picture below, Tide took advantage of a
natural disaster to raise their company brand
image. They created Tide Loads of Hope and sold
branded merchandise while stating that the profits
would go towards helping families affected by
disaster. This branded merchandise is also a
brilliant tactic in turning their consumers into
walking advertisements! The consumers walking
around with these Tide Shirts will be advertising
and priming their audience to purchase Tide
products.
Conclusions
While prediction and prevention of natural disasters are well beyond human capability currently, the
losses that natural disasters incur on business corporations could be alleviated through proper pre-

disaster, during-disaster, and post-disaster procedures. Through close investigation of the causes of
manufacture, transportation and sales losses of the three disaster periods listed above, we have
proposed feasible suggestions to maximally reduce natural disasters damage on business corporations.
They are summarized in Table 1.
Suggestions

Manufacture losses

Supply Chain losses

Sales losses

Pre-disaster

1. Search for ideal manufacturing

facility sites where occurrences of
natural disasters are
comparatively low
2. Insure buildings and factories
3. Factories should be build to
withstand severe disasters
4. Evenly distribute factories
around the world
5. Prepare recovery plans
6. Allocate certain amount of
recovery funding beforehand

1. Build better communication with

disaster-forecasting agencies
2. Know all critical facilities within
the supply chain that are
susceptible to emergency situations
and build minimum distance secure
sites network as substitutes once
certain ones are damaged
3. Have a diversity of suppliers and
markets
4. Adaptable and dynamic supply
chain structure
5. Emergency management
workshops

1. Build and maintain adaptable and

modifiable strategies

During-disaster

1. Contribute certain amount of

money to societies and
communities to improve public
image
2. Provide temporary shelters for
impacted employees

1. Release employees from work

once a forecast is broadcast
2. Reduce transportation in certain
region
3. Maintain intact communication
4. Provide transportation to local
community

1. Advertise corporate profit

donation and disaster relief efforts
to damaged regions to boost sales
and company image

Post-disaster

1. Construct supplier network

consisting of various suppliers to
minimize future loss

1. Flexible recovery framework,

dynamic traffic routing
2. Reserve labors for increased
need of transportation
management
3. Build temporary transportation
network, upgrade broken networks
4. Integrated supply chain with
partners sharing regional
transportation

1. Utilize public relations and

company efforts in disaster relief
and recovery to improve company
image and attract public
appreciation

Table 1. Summary of suggestions on corporate strategy during different disaster periods with different
types of losses. Suggestions are based on analysis of causes of loss detailed in this paper.
Future directions
Based on the scenarios we considered and the examples we reviewed, there are several interesting
topics that would be good starting points for some effective procedures against damage of natural
disasters.
Firstly, as many different factors collectively determine the damage of natural disasters and thus our
business strategy in response, it might be useful to construct a strategic framework against natural

disaster damage with all factors quantified. Simply put, just as the number of employees absent from
work is quantifiable, so are the production delays and inventory losses in terms of number of units,
supplier delays in terms of number of products affected, sales delays in terms of amount of money lost,
etc. These data could easily be obtained if a complete network of data-response system is already
present throughout the corporation. The data could then be processed using business models and
computer programs to assess actual damage, prioritize recovery efforts and thus minimize corporation
loss. An effective quantified system of assessment would be feasible because quantification of loss is
fairly objective while considerate time and money could be saved once a natural disaster strikes.
Therefore a quantified damage assessment and recovery plan program would be an interesting topic to
research on.
Secondly, it was observed that many corporations have their manufacturing facilities in developing
countries in Latin America or Southeast Asia to take advantage of cheap labor costs. However, it must be
noted that poverty in those regions are partially associated with high frequency of natural disasters. For
example, Latin America suffers from frequent cyclones, earthquakes and floods while Southeast Asia
undergoes super typhoons and tsunamis. Therefore considerable risks are involved with the cheap labor
costs. To minimize the loss, different corporations, which have their manufacturing facilities in the same
region could construct, integrated manufacturing bases instead of individual factories. In that case,
corporations could collaboratively invest some funds to build a better-tailored and more durable base
that could withstand stronger natural disasters commonly seen in that region. The employees could
enjoy better accommodation or shelter and more interactive social lives because their working place
turns into a bigger community. More people would like to work for the corporations, which would boost
production rates. Also, a well-constructed plant could greatly alleviate the risk of natural disasters with
limited expenditures. Therefore this integrated manufacturing base could be investigated by business
organizations in the future.
There are many other ideas to use more advanced strategies to edge our fight with natural disasters.
Business corporations must consistently seek for better solutions to better prevent their losses in the
unpredictable and unpreventable natural disasters.

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