Geopolitical Risk Example: Egypt and the Arab Spring
In 2010, Egypt won the European Outsourcing Association award for Outsourcing Destination of the Year. Soon after, the Arab Spring and the 2011 Egyptian revolution resulted in hundreds of deaths, a military assumption of power and a military coup.
At various points during the years following 2010, many manufacturers had to suspend operations in the country. GM stopped operations at its Cairo-area plant because of concerns over the safety of its workers. Daimler stopped production at its Egypt plant, and even requested that expatriate employees return home to Germany. And BMW shut down its assembly lines in Egypt.
In a world of increasing globalization, events such as these show that geopolitical risk is becoming more and more relevant when it comes to managing supply chains.