Review the Competitive Landscape
by Lindsey Norris
It’s not easy to run a business during a recovery. Everything you thought you knew about economic growth and consumer behaviour has been turned on end. Some companies are avoiding the madness altogether and embarking on new markets less affected by the downturn. Take the Calgary office of NOV Hydra Rig, an international oilfield services company. It has begun specializing its equipment to make it appropriate for use in China, a country with a growing economy that is only beginning to seriously develop its domestic oil reserves. You can’t do much better in the way of new markets. Here, other ideas to keep your company booming, post-boom.
Find Growing Markets
When you’re looking for other export markets, you should look at things like population growth, a growing middle class, rising wages and the country’s own production levels says Tina Kremmidas, chief economist for the Canadian Chamber of Commerce. If they are producing most everything they need domestically, it’s unlikely they will import. One example of such a market is Brazil.
Accept that there is no crystal ball
No matter what predictions arise for the recovery, you must prepare for alternate scenarios. Douglas Reid, an associate professor of international business at Queen’s University, believes the reason many companies got into trouble during the recession was their unrealistic expectations. “Companies were overleveraged because they had false assumptions,” he says. “There should be contingency plans even in buoyant times.” One remedy is scenario planning – a method used to make flexible long-term plans that was popular in the ’70s and ’80s that Reid says fell out of favour due to the expense, but he now sees more companies returning to it. Think about it.
Fill voids left by downsizing competitors
If a competitor hands you the gift of downsizing, you can tap their customer base by offering discounts to new customers or adding services. The travel industry, never short on competition, saw some shake-ups last year with some long-standing players like Conquest Vacations closing. Last year, WestJet added new routes and vacation offerings and was rewarded with a record load factor in December. In November, the British Columbia Automobile Association (BCAA) announced it was closing all storefront travel operations, so Halifax-based Maritime Travel jumped at the chance to increase its presence in Western Canada by hiring 36 former BCAA employees and opening seven new offices across B.C.
Change dance partners
In the past, the United States was the apple of Canadian exporters’ eyes. But the U.S. is relying more on imports from China and the European Union, and that’s not the only reason Canadian businesses should start courting other customers. “There is no question that the U.S. economy, although they have come out of recession, will be struggling in the years ahead. They have massive debts, access to credit is not readily available, and the American consumer is overextended,” says Kremmidas. Bottom line: it’s time for Canadian businesses to start playing the field. Export market monogamy is so 2009.
Beware the Trojan horse
A competitors’ demise isn’t always a gift, and you don’t always want their leavings. Maritime wanted the BCAA employees because it wanted their clients. “Our model is one-to-one personal service and our strength is our relationship with our customer,” says Randolph de Gooyer, Maritime’s vice-president of corporate development. “This provided us with a great opportunity to expand into some markets and hire staff with a lot of experience with some very loyal customers.” However, had their business model been purely about discount travel, the clients of those former employees might grow pretty annoyed with the level of service. And no one needs any bad word-of-mouth circulating now.
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