In: Categories » Business » Strategic planning » Strategies for Success and Business Profitability During Tough Times
| Many of the strategies that were appropriate and effective in the past are no longer above reproach. In fact, we have learned over the years that the global marketplace is a dynamic place, full of turmoil; therefore, rethinking of past assumptions and engaging in out-of-the-box thinking is always required. Organizations need to address this constant change, focus on the state of the world, both as it exists now and as it may be in the future, and raise their performance to new levels of effort and achievement. Recent ProgressProduct quality is no longer an issue. It is almost impossible to justify a multilevel pricing structure by offering different levels of product quality. Market segmentation now focuses on differences in features and support. Differences in product performance are acceptable. Differences in performance quality are not. Responsive ServiceYou will gain competitive and profit advantages by compressing the supply chain from your suppliers to your company to your customers. The amount of time required for this sequence of events has a substantial effect on your inventory, accounts receivable, profitability, and ultimately cash flow. Service levels are affected as well, which may in turn affect your market share and sales growth. Competitive PricingIn many cases, competitive pricing means price reductions. This era of pricing pressure is not going to change any time soon. Asking the customer to pay for our inefficiencies is not an option. Many industries are experiencing price deflation and will continue to do so. This means that companies must find new ways to maintain their profit margins. The successful ones will become more efficient, find more value-added features to add to the product, and focus on new markets and distribution channels in order to remain competitive. Have you priced out a personal computer lately? Companies will need to make a great effort to distinguish themselves from their competition. The new realities include very low interest rates, economic turmoil in Asia, essentially zero inflation, and a single global economy. However, a company’s profitability can be enhanced, even during tough times. These realities can serve as a competitive advantage if you refocus the attention of the organization on the fundamental realities of successful business: 1. Why are we special? 2. Why do we deserve to exist? 3. Why should customers buy our products? 4. Why do we deserve to have our customers’ money? Attitudes and Strategies for SuccessWe exist to help our customers sell their products to their customers at a significant profit to both of us. This is called strategic partnering. We need to help our customers solve problems and to focus on their opportunities rather than merely providing products. Anyone can sell products. This is called consultative selling. Our prosperity is enhanced as we improve our customers’ ability to compete in their marketplace. We know enough about our customers’ businesses and markets so that we can provide products and ideas that will make our customers special. Our people know no limits to their efforts. Specific Action Strategies The fundamental ingredients have not changed; only the environment in which we need to make things happen is different. Not only is thinking out of the box necessary, but I am no longer certain that there are many ‘‘boxes’’ remaining. Here are some strategies that are available to you: Invest in sales professionals and their training and support. High-quality marketplace visibility is the most profitable investment your company can make. Accelerate the development of innovative products and services. Focus your company’s resources, both people and money, on those products and services that offer the opportunity for significant financial reward. Persistence is valuable—but not when it implies refusing to change direction when success is not available if you go on as you are. Learn more about the current economic environment and the persistent global turmoil. How can you benefit? This has implications for both buying and selling. Change is good because it creates opportunities for those who are prepared and ready to take action. Expand your marketplace support to include participation in trade shows and industry showcases, advertising in welldirected journals, and use of other media to communicate with existing and potential customers. Keep your customers aware of your constantly improving capabilities. If you have nothing new to say to your customers, your competitors will. Streamline the performance of your administrative support. Use technology in ways that let you derive its maximum value. Use experts to fill in and eliminate the knowledge gaps in your organization.
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