Now if you keep using your playbook from the good times (i.e., the same strategies and tactics), it is highly likely that you will experience a revenue decline of 5-10%, if not more. And for many industries, a loss of 5-10% in revenues can easily swing a profitable business to a money losing business. Ouch!
However, unless you have a significant market share (say above 50%), then a decline in total industry revenues need not translate into a loss of equal amount in your sales. It is time to take market share away from your competitors. Right NOW!
If your life depended on it, I fully expect most of you owning or managing a business could identify specific ways to take business away from competitors. Well your life may not depend on doing so, but the economic life of your business may very well depend on it!
The good news is that some competitors will not change their playbook out of a belief that this is just another media overreaction (it is not!). Others will not change because they are expecting (or at least hoping) that the downturn will quickly pass (it will not.) Others will be wedded to the strategies and tactics that made them successful and will be unwilling to make necessary changes. Others will be too kind hearted and unwilling to make the hard decisions. And, others will be ill equipped to devise winning strategies and tactics for these whitewater times.
The bad news is that some competitors will make changes, including some that could be just plain dumb…like lowering selling price to below their marginal costs. You don’t have to out hustle all your competitors…you need to out hustle enough to grow market share, profitably, in the face of shrinking industry demand.
In many industries, the winners have already started hustling more. Are you? Have you changed your strategies and tactics to fully reflect the downturn? Are you aggressively implementing your new plans? Do all of your employees understand the importance of having a much greater sense of urgency in implementing your plan? Are you, and your employees, embracing the needed changes, or fighting them?
Or have you resigned yourself that a market contraction is the death knell for your company?
The choice is yours!
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1 comment:
Your post today reminded of when my father first taught me to drive. Among his admonitions were to always look far ahead for possible problems and to always be prepared to make a move if you have to....
With what is likely to be relatively broad and sustained downturn, we all need to be staying in strategic mode....thanks
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