One of the challenges of being in business is surviving the tough times. Traditionally, when the economic cycle peaks and starts its downward cycle, everything related to business and technology investment declines. However, these events are consistent and relatively predictable.
Over the course of every decade or so, the economy seems to slump, recover, and boom. As we await the up-swing, business - especially South African-based companies - must learn to adapt and view the opportunities that can be gained even in a tightening economy.
Without a doubt, businesses today are more global than they have ever been in the past. This globalisation trend has meant the organisations are seeing increased competition in their local markets, something which can be severely damaging in a down-turn economy. However, the smart companies, those that understand the art of survival, understand that globalisation still provides opportunities in this credit crunch. Today's agile organisations have the ability to shift energies and resources to locations where growth remains stronger than the so called 'over capitalised market' and market segments. Certainly South Africa and Africa is well positioned here. While as a continent, we are still subject to the constraints of this ongoing credit crunch, the opportunity presented to us, being a country that still requires much investment, growth and skills, even if they are measured with some hesitation, will afford companies with the right insight and agility, the opportunity to truly explore business models and market approaches that will allow for ongoing growth.
To mind, local organisations have largely defined their core business more tightly than many of our international counterparts and to a large extent have less operational fat to trim to maintain their profitability, thanks largely to our entrepreneurial spirit and our ability to remain focused on customer expectations of service and quality, which remain high.
However, let's be honest, the market is getting tougher and tougher and therefore, certain principles should be remembered to ensure your business remains a viability entity in the next few months. If business can understand that survival will in large part be based on their ability to keep the customers they have - rather than fighting to increase market share in ever shrinking margins - then their opportunities will be far more significant than expected.
However, one of the most crucial factors in this strategy is ensuring that the company decision-makers remain focused. With the growing market uncertainty comes turmoil. Therefore, it is becoming more important than ever before that business not react abruptly. Slashing costs erratically could destroy their ability to compete in the long term. So too could falling into the trap of cutting prices merely to maintain volume, as this could leave these operations worse off when the expected increase in sales do not materialise.
Furthermore, organisations also need to decide which functions and initiatives to concentrate on, and which to outsource or stop altogether. If outsourcing is deemed to be the solution, organisations need to beware of rushing to appoint new suppliers and to take due care in planning and negotiating contracts. The bottom line is to work with companies that can demonstrate viability and insight into your market and customer retention strategy in the coming months.
Ultimately, if a company is prepared to act, the opportunities can be significant. But remember, maintaining ever-increasing standards of customer service will be crucial to surviving the tough times in business.
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