Commercial Asset Finance Group offer advice on marketing strategies, finance and other aspects to help businesses to succeed externally.
The CEO of the ANZ regards the current market volatility as being a return to normality, where the ‘good’ businesses will survive and prosper and the ‘marginal’ businesses will fail or be taken over by successful businesses.
Good managers need to look even more carefully at the efficiency and internal processes of the business to succeed externally. The most important survival technique is recognising that the environment has changed dramatically in the last few months. Lacking information about the efficiency of one’s business will be detrimental in the new environment. Information about efficiency is critical as some costs have to be contained or decreased.
Businesses that have survived and prospered consistently in this new environment do not decrease marketing expenditure, human resources spending or customer service.
Companies preserve capital by acquiring important capital solutions by transferring cash flow over the finite time of the recession to capital equipment solutions to improve their competitive position. Investment in efficiency is more critical in this environment than in good times when inefficient processes and practices can be supported by the ‘good times’.
A characteristic of a marginal business is its inefficiency and lack of knowledge about where the inefficiencies lie.
Cutting margins on sales may be an initial reaction. However, decreasing margins mean increasing sales numbers to maintain viability. In this new environment, unit sales numbers are not likely to increase. All companies have developed operating inefficiencies that will decrease margins considerably more than the sizable discount that probably will not increase sales. Companies must consider investing in more efficient systems and redeploying those administrative staff with enormous intrinsic knowledge of products or services to sales or customer support.
Successful companies have an awareness of their situation that is greater than the financial aspects of the company. Companies must develop systems to monitor their entire process that is the internal situation of their enterprise.
If a particular strategy or process is not working then it must be removed. The strategy or process must be separated from the people that are currently engaged in the failed action. Research shows that the best people for a company leave during downsizing.
Marketing strategies are critical in the new environment and marketing has been proven to be a key differentiator in recession proofing businesses. Businesses must put their marketing strategies to the acid test and if they are not performing remove them and redirect the resources.