Vision & Execution’s Weblog » recession

Will Consumer Sentiment Support Your Growth Goals?

visionandexecution — Fri, 23 Dec 2011 04:32:36 +0000

Despite the bearish predictions for the economy from 2012 prognosticators, according to the December Economic Conditions Snapshot research sponsored by McKinsey, executives are more optimistic than they were in September. Although not as optimistic as they were in June, the majority of North America executives expect corporate profits to rise; other regions are more conservative. Concerns over low consumer demand appear to have executives holding off on M&A activities and capital investments.

Consumer demand presents greatest concern for economic growth

If concerns about low consumer demand hold true where will companies achieve their growth? Market share! Companies who better understand customer needs and deliver their solutions more effectively will stand to gain from their competitors. While an obvious statement, it’s amazingly difficult to execute. Systems, internal folklore, and politics all get in the way of staying focused on customers and meeting or exceeding their expectations. As you think about your New Year’s resolutions, why not resolve to break down one of these barriers to growth?

Vision & Execution specializes in identifying how to address the customer needs that will propel your business forward.

Optimism by retrenchment? Where are the strategies for sustainable growth?

visionandexecution — Wed, 15 Jun 2011 17:30:52 +0000

The June 2011 McKinsey Global Survey on Economic Conditions suggests that executives expect to achieve corporate profitability despite lower expectations for their national economies to rebound. It appears that despite no growth in capital expenditures and stable or decreasing workforces that companies will increase their profitability. Well profitability yes, perhaps, but not top line revenue – fewer expenditures plus expectations for a reduced risk for inflation should keep costs in check.

In a separate piece of analysis by McKinsey – Sustaining top-line growth: The real picture – their data showed how tough it is to beat the market. Exhibit 2 shows that corporate revenues, on average, tracked neatly with overall market conditions. So how will your company beat the market, or are you content to ride the wave?

If you’re looking to beat the market, please contact Vision & Execution to hear about our many tools and services to help your drive strategic growth.

Vision & Execution helps companies align your marketing and sales initiatives with customer value to achieve your sales goals. We delivers the insights you need to leverage marketplace realities to drive higher sales with greater profit margins. We provide you with the strategic and tactical plans to achieve your growth objectives. Our broad business and technical acumen put you on track to realize your full revenue potential.

Who do you compete with, really?

visionandexecution — Thu, 01 Apr 2010 15:58:41 +0000

Two reports on innovation and competitiveness were released by the European Commission in recent weeks. These two reports come on the heels of the 2009 Global Competitive Index (GCI) being released last fall. They provide a fascinating look at the changing dynamics of our global economy as well as the impacts of our lingering economic crisis.

Why is this important? Just look at some of the recent shifts in the GCI Index as a result of the recent economic downturn. The U.S., which has historically held the #1 position, slipped to 2nd place allowing Switzerland to take 1st place. Singapore jumped from 5th place to 3rd place. Japan moved up from #9 to #8 in 2009 while Denmark dropped from 3rd to 5th place. Are these the countries you think of when conducting your competitive analysis?

Expanding your analysis of potential competitors creates advantages for you in a couple of ways. According to the EIS report, firms that are more innovative are less likely to cut back on innovation expenditures. The report found companies that maintained their innovation strategies and spending, including the use of open innovation and user innovation, were more resilient to economic downturns. Shifts in rankings as reported by the EIS suggest that other countries are being far more effective in remaining innovative and potentially producing a competitive threat to your business.

One of the most interesting findings in the 2009 EIS report is the causality between internationalization and innovation. “The extent to which a country’s businesses, institutions and industries are linked with resources and capabilities located outside the country is likely to positively impact the innovation performance of that country. Conversely, innovation intensive firms and countries are more likely to be able to compete successfully in international locations.” Movement across borders of capital, employees and students are key drivers to a company’s success. It’s not enough for your company to monitor competitive threats in other countries; it’s critical to be in the right countries to leverage your innovation efforts.

The U.S., despite falling to 2nd place this past year behind Switzerland, has a long standing tradition of highly efficient markets, sophisticated business culture and an impressive capacity for technological innovation supported by high levels of collaboration with research universities. Yet these very factors that drive US productivity and competitiveness are the areas where other countries are making impressive gains.

The EU27 outpace the US in all areas except those related to R&D expenditures and patents. While the US leads in 11 of the 19 indicators measured, the rate of growth is slowing (1.63%) while the EU27 is growing (3.17%). Similarly, compared to Japan, the EU27 have shown greater improvements in education, research and other collaborations and exports while Japan improved its lead in R&D expenditures and PCT patents.

The BRIC countries have been lumped together for some years, however the disparities reported in the EIS study suggest a new grouping will emerge. China is surging ahead with high tech exports, while Russia has fallen behind. Russia’s key strength is its higher education but it has not been effective in converting that to innovation growth. China surprisingly is outpacing the EU27 with their improvements in patents, trademarks and knowledge intensive services.

These findings are a not so gentle reminder that we must look past our borders when evaluating the competition but also when searching for partners and R&D opportunities. Depending on your business – manufacturing based or services based – you will find different countries offer different strengths as competitive threats or prospective resources.

Vision & Execution specializes in taking a global perspective to developing strategic growth plans for your business. If you’re struggling with how to ramp your growth internationally, contact us for a 60 minute complimentary review of your current strategy.

Recession-Proof Your Business

visionandexecution — Tue, 02 Dec 2008 00:01:48 +0000

There has been talk of being in a recession most of 2008. With the credit crises and stock market swan dive, the debate should have been over. Yesterday’s news made it official – two quarters in a row of declining growth.

Earlier this year, Business Week published an article on the 10 Worst Innovation Mistakes In A Recession. #4 was to stop New Product Development under the assumption that it would save money. In fact, it doesn’t save money, it simply reduces the chances for new revenue streams downstream.

Research conducted by Robert Cooper, President of the Product Development Institute, in 2004 found that new product sales fell from 32.6 percent of total company sales in the mid-1990s to 28 percent. More importantly, the same study showed that profits derived from new products were down from 33.2 percent of business profits to 28.3 percent over the same period. Why? What did companies do differently? Quite simply, companies stopped taking risks — new to world product innovations fell nearly 50% during that same time period accounting for the drop in revenues and profits.

What lessons can you learn from these past mistakes? I hope you will decide that now is not the time to slow down innovation. Your approach to innovation needs to become more productive and efficient. It’s not simply about being more creative but about being brilliant in your execution. How do you mobilize people and keep them focused? How do you explore technical feasibility? How do you identify what will drive adoption? How do you determine who best to partner or align yourself with to realize your vision? And most of all, how do you manage risk?

I wish you great success in these interesting times for new opportunities.

Regards,
Patrina