Staying Afloat In A Competitive Business Environment

Our streets, roads, the print and electronic media are awash with different offers from manufacturers and service providers. The one I enjoy so much is the one between the phone manufacturers. The competition is so hot that Apple and Samsung had to extend their “fight” to the court room 🙂  I also read online that one major phone manufacturer, and a one-time major player in the phone business, has been having some “survival” meetings with some organisations. How sad! But that is the nature of business. It’s like a game – no pity for the opponent and all the players cannot be winners.

As a consumer, I love competition for so many reasons. It affords us the privilege of having alternatives to choose from; it forces businesses (serious-minded businesses, if I may add) to see consumers as being the most important factor to consider and hence, be the focal point in business decision making process; it makes pricing to be at consumers’ advantage; it forces businesses to constantly seek for their loyalty; and it forces businesses that are not quality-conscious, to have a rethink……The benefits continues……

No doubt, as consumers are enjoying these benefits, businesses grapple everyday with the art of “out-smarting” one another in a game, an interesting one at that, that involves winning as many customers as they can, over to their side. Sadly, the inability to cope with competition is a major reason why so many businesses all over the world are finding it very tough to operate, and in extreme cases, many have “crawled” out of existence!

Competition has been the bane for so many businesses that have either not mastered the tricks of the game; cannot withstand it or have simply believed that businesses can survive on luck, mediocrity or chance for so long.

I got the urge to do this post after my wife started complaining that the number of businesses competing with her was rising every day. The fact is that the only way to avoid competition is to “close shops.”  Aside from legal monopolies (organisations given the legal power to be the sole producer or seller of a product/service), every business attracts other businesses in the same line of trade. Even where turnover/profit is not encouraging, or where a business enterprise is creative and launches an entirely new product or service, other people/businesses would still join the market and create competition.

So, since competition is inevitable, and the foundation of competition is “winner takes all,” what will a business do?  Apply for a legal monopoly status? 🙂 Well, I am not aware of any country where that is done. Cut corners? That too, is not a good business option as it is a short-lived solution that can even boomerang. So, what’s my take on competition?

Below are six [to avoid putting up a very lengthy post] of the tips I shared with my wife…..

1. See business like a boxing match. In a boxing match, boxers fix their eyes on each other to counter every move of the opponent. In doing this, they have to be alert and conscious of their environment – a case of complete alertness. Thus, businesses have to constantly be at alert – conscious of, and pre-emptive of competitors’ actions and inactions. I feel this among phone manufacturers this days. To me, competition among phone manufacturers is  good case study for my post.

2. Do something extra.something special.  Make your product or service very outstanding. Relate with your customers in a way your competitors are not known for. Give them a very competitive price, without lowering standards. Use marketing campaigns and strategies that your competitors have not explored or have not even thought of. Give your customers reasons to stick to you and give your competitors‘ customers reasons to cross over to you.

3. If making huge profits was your major focus, think of this : while you are busy chasing money, your competitors are busy strategizing on increasing customer base, including, of course, winning the hearts of your own customers over. So, my take on this is: re-strategise by making customer-focused strategies to be your main focus.

4. Where you do not see your customers for a while, do not wait for them. Reach out to them. In this age of high tech communication, distance or large number of customers is not an acceptable and reasonable excuse.  By just by clicking “enter” or “send” on your computer or mobile device, you can reach millions of customers. A simple message that reads : “Hi valued customer. I/we just want to wish you a splendid weekend” can go a very long way in reawakening a dwindled customer loyalty.

5. Every consumer loves convenience. Think of ways you can create convenience for your customers. There are many ways that this can be done. This however depends on the nature of your product. You can carve out time for home service, break bulk, arrange for delivery of the goods to the door-step of the consumers, ease usage, among others. All of these are aimed at satisfying different groups of consumers rather than seeing the entire market as being the same.

6. There is no doubt that the human resource “drive” an organisation towards growth, stagnation, decline or eventual collapse. It becomes MANDATORY therefore for businesses to engage and maintain(through motivation and excellent welfare and staff development packages) goal getters and workers who understand what business growth and success is all about. Thus, merit and not nepotism or sentiments should be a business’ over-riding criteria in employment.

Of special mention here, is the caliber of the CEOs and top management personnel who take far-reaching decisions affecting the entire business. This days, wrong choices of who pilots the affairs of a business would be a costly mistake as it could place a business on the path of failure, stagnation, inability to stand competition, and then collapse.

I hope you found my tips useful.  I would like to read your reactions 🙂

Thanks a lot for your time and wishing you loads of luck in your business 🙂

Make Or Mar Ability Of business Locations : Looking Beyond The Consumers

Lagos, Nigeria

A beautiful environment with basic infrastructure is good for business (Lagos, Nigeria)

In my last post on business locations, I only focused on customer considerations in deciding on where to locate a business. Even as crucial as the consumer factor is, there are quite a number of other factors to put into consideration. It thus follows that even where an area is considered as a consumer hot spot, other equally important factors might make the choice of that particular location, a big error.

One very other very important factor to consider is the availability basic infrastructure such as power, roads, communication, transportation, water and much more. I do not see a business doing very well in a location where power supply is non-existent or very unreliable. Power supply, whether hydro, gas or solar, is like blood to a business. Its absence causes a lot of problems to businesses since most business equipment need power to function. You can imagine what businesses that actually need power to render their services or sell their products, would do where there is no public power supply, or where it is unreliable.  They would definitely need to generate their own power, usually at a higher cost. This would eventually have multiple chain consequences on the business – meeting up with other business expenses might be hampered, especially salaries, asking for a raise might be an “abomination,” re-stocking might be affected which can lead to stock-outs, stock-outs deals a bad blow on sales, low sales means low profits; dwindling profits, if it persists, leads to stagnation and eventually, collapse, in severe cases. A number of businesses have packed up because of this singular factor – power!!!

Good roads and transportation are essential to business (Lagos, Nigeria)

Good roads and transportation are essential to business (Lagos, Nigeria)

The state of transportation and roads and their networking, play very vital roles in the life of businesses. Businesses that are into manufacturing and buying and selling cannot but give serious thoughts about it. This is obviously because of their frequent movement of goods, in and out of the business premises. No doubt, roads also have impact on the life span of motor vehicles and their maintenance cost. Again, these also have chain consequences on the business.

The way businesses are being run today, communication is almost as important as money in business. Technology has changed the way communication is being carried out. The level of development is not the same everywhere. In some areas, communication services, in particular, the internet is far from being developed or reliable. This kind of situation will not speed up business growth. This kind of situation would also prevent the business from meeting up with global trends.

Security is another crucial issue. Insecurity is a very is a big enemy to anybody, let alone a businesses that needs people to come around for deals to be struck. Insecurity restricts movement, creates a general feeling of fear and anxiety; and in extreme cases, reduces the number of current and potential customers through deaths, particularly in areas experiencing wars and terrorist attacks.

Another vital factor to consider is the cost of labour. Labour costs seems to take a huge chunk of running expenses. A smart way out of this is to consider areas where labour cost is cheaper. Apart from having access to more eligible workers, running cost is greatly checked.

Government policies also affect businesses. Ignoring them might make the business to be at the mercies of the government later. Policies on taxes and fees, what is legal and what are not, personnel issues, business records, business hours and much more, have effects on business. Experience has shown that the “friendliness “of these policies defers from place to place. So, if you want to start up a business or you want to relocate, you might want to find out which location would have greater friendly government policies.

A business whose daily turnover is usually on a very high side would have to be security-conscious. One smart way of doing this is to look for a location that is close to banking facilities. This enables frequent movement of cash away from the office to the banks, which is considered safer.

In addition to these, businesses that see their employees as key to the success of the businesses, would be see it very necessary to consider easy access to health facilities when making location decisions. Employees give in their best when they have a feeling of care and concern coming from their employees.

Another important factor to consider is the cleanliness of the chosen location. A dirty location poses health hazards to everyone that has something to do with the business. If the business is into food processing, a clean environment would be their best best. A dirty environment therefore keeps people away. Such businesses also run the risk of constantly having problems with government health officials.

Finally, it might also be very important to consider competitors in making location decisions. The world of business, as we have it today, is a very competitive one. Some businesses merely exist. Some have intimidating profiles and stature. Some will attract customers which eventually strike deals with rival businesses. Some are serious threats to competing businesses that make the mistake of coming so close to locate their businesses next to it. A serious appraisal must be made of these realities.

In all, together with the first part of this post, it is obvious that businesses that are very successful today have actually done their homework very well.

I sure hope this post was worth your time.

Thanks for your time.

Related posts :

Make or mar ability of business locations : The consumer factor

Small businesses’ practices and the issues stagnation and growth

Decision making : The sensitive and far-reaching function of a manager

It Pays To Separate Your Private Purse From Your Business Purse

I have often been accused of allowing my Accounting and Business Management background to affect me in the way I reason, plan, and generally take decisions. One of the most popular being my often critical analysis of expenditures. They say those who have accounting background are stingy. Awww. That’s not fair !

Well, I have always argued that the quality of my actions and inactions, rather than my background, should be of top priority.

I once had an issue with a thriving business owner many years ago. It had to do with a 31-point memo I issued him upon his request. I actually did a business survey for him as he was experiencing a lull in his business. He was very impressed with all but one of my recommendations – the one that had to do with proper financial accountabilty.

I was of the strong opinion that one of the strongest enemy of his business growth, and the number one reason why his business was facing difficulties, was his refusal to strictly follow the “business entitity concept.” So many businesses, especially the SMEs (small and medium scale enterprises) are grappling with this problem.

This is an accounting concept that requires a business owner(s) to see himself as being different from the business, and that the Accountant should treat them as such. It sounds stupid for someone to tell you this. Isn’t it? Well, this is a major problem for countless businesses across the globe.

It was no surprise to me later when I heard that the company later developed serious financial problems, so much that they could not meet up with jobs given to them. Settling bills and payment of salaries became impossible and at the tail end of its crisis, the company went underground. It collapsed !

All the owner needed to do was to separate his business bank account/purse from personal bank account/purse. It also required strict recording of ALL financial transactions. That way, he would have been in constant touch with the realities of his business, and thus be able to know when he can and should not “deprive” the company of scarce business resources. It simply required financial discipline. Sadly, he was very comfortable with “the system that puts all the money on his table”.

What this translated to was for him to fix a particular amount that he can draw as salary. Salary ? Yep ! Every other money then belonged to the business – his business! Sounds odd, but financial discipline is one of the major secrets behind the enormous growth experienced by most businesses. And certainly, financial indiscipline or recklessnes is a major reason why so many businesses are experiencing stagnation, slow growth, fianancial stress and in extreme cases, business collapse!

So its a matter of choice ! Financial discipline Vs Financial indiscipline.

Thanks for your time.

 

Related posts :

Small businesses practices and the issues of stagnation and collapse

Decision making : The most far reaching function of a maanger 

Outsmart your competitors or they will kick you out of business

 

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