Rethinking Your Business Strategy: When And Why
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In a recent article on planning for a recession in Harvard Business Review, the authors mentioned that by historical standards the current phase of economic expansion is long and the risk of recession rises with each passing month. In the Middle East, with the fluctuating oil prices, there are murmurs of businesses in trouble especially in the small business segment. So, how do you start recognizing the signs and preparing for this?
Typically, if you have been seeing consistent declines in revenues because of lower pricing, smaller contracts (in desperation of getting some income) leading to eroding margins on each deal, then you could well need to have a sit down and rethink your strategy and reach out for that life support. Sometimes making the smallest change can reap huge benefits.
Money and pricing
You should have finance processes in place that measure relevant indicators. This includes not just cash flow but also monitoring the influx of new business at the right price points. For example, on the sales side, you should have performance targets and indicators in place that can help you identify if your funnel is drying out. You need to observe if, to win business, you have to offer discounts, or if your competition is undercutting your pricing. You might need to take a step back and look at your value propositions and check that you receive money for the value you provide. Is your pricing strategy matching what you truly offer, are market demands changing, is competition undercutting your pricing?
This is a key area that could drive this change. You need to ask yourself some very key questions and the answers could help you to derive a strategy that could help you survive and grow.
Are the number of opportunities you become aware of -and that you can win– decreasing? If so, is this because of geo-political or general economic reasons or because there are new market entrants- do you have more competition for the same segments? Has your offering lost attraction for your target customers or are you aiming at the wrong customers? In other words, are you misreading customer needs?
In today’s dynamic business world of ever-growing interconnectedness, a sneeze in the US could cause flu in the Middle East – it is imperative to continuously observe and evaluate and work on your business to ensure that it stays on top of trends and remains relatable to not just your existing customers but new ones as well.