Between 2021 and 2022, there are increasing cases of company insolvency and bankruptcy in the UK. According to research, liquidations in the UK are set to increase four times between 2021 and 2022. Businesses are also facing a drop in customer demand as they face challenges like inflation, rising costs and labor issues. According to Reuters, retail sales volume is set to decline 3.0% in 2022, the worst full-year performance since at least 1997, as shoppers cut spending.
To survive the volatile economic climate, business owners must have an agile business strategy so that they can understand the risks and unlock new opportunities.
Assessing Your Current Business Strategy
A business strategy is essentially a set of goals, actions and activities that specify how and with what goods and services you will compete in your market. Traditionally, businessmen have analyzed external market factors to inform a multi-year plan to prosper in that future.
However, the process becomes less linear as conditions change more quickly and rapidly. Those who already position themselves strategically should consider the agile environment and become more adaptable to survive the ever-changing landscape.
First of all, you need to think about what you want to achieve. Are you looking to increase revenue, increase market share, open more stores or hire more people? It can also include figuring out how to stay afloat for the time being, weather the storm, find new sources of income, expand into more buoyant markets, and move in a new direction.
Then it is about how are you going to achieve these goals? Are you developing a new service, promoting your business to a different location, or looking for new marketing tools?
how to be more agile in your approach
It is important to think of strategy development as an ongoing process that produces a living, dynamic plan. Set yourself one or two priorities and then organize all your efforts around these. You also need to be sure that the people assigned to those priorities are capable, willing and understand what the goals are and why they should remain in laser focus.
So, how do you select the most appropriate goals that have the highest chance of unlocking the power in your business? This is where pestle analysis comes in handy.
The PESTLE framework enables companies to understand the external environment. In today’s business scenario, it is an essential exercise to identify any change in market conditions with immediate impact on the company’s performance and in the longer term. Some conditions are not always controllable, so regular monitoring enables businesses to assess the level of risk associated with their business activities. Pestel allows you to make sense of the business environment.
What should you look for?
For a long time there has not been an atmosphere of political instability as we are witnessing now. Politicians’ decisions on issues such as wars, taxes, pandemics and trade deals have far-reaching consequences for businesses. If there is a change in policy, new legislation, or upcoming regulations, consider the impact on your business.
Global economies are being tested, if not broken. As a result of recent events, all of the world’s major economies are experiencing hyperinflation or are in recession, with some on the verge of a Great Depression-like scenario. When deciding where to target your business, consider how different economies are operating, whether they are micro-economies within the UK (towns and cities) or entire economies (countries). Perhaps you’ll need to open a store in a different city to attract new customers, or a lack of talent in your area may force you to recruit from abroad.
Our lifestyle, behaviour, expectations and social norms have changed and this happens on a daily basis. These social changes have shifted consumer preferences. Consider the sudden rise in instant-gratification culture, in which people expect things instantly. While instant gratification may appear to have a customer-centric effect, such as people wanting next-day delivery, it has also had a significant impact on employee expectations. If one of your goals is to grow your business and hire more people, you should consider how your employees work: are you using outdated processes, or do they have access to useful digital tools? ?
Other sociological factors to think about include population demographics to better understand the characteristics of your target market; knowing whether your customers are ethnic and what kind may impact your operations; And what kind of work patterns do you have (hybrid etc.) and how will they affect your business.
New technology has impacted most businesses and will continue to do so as we witness the rise of technology such as artificial intelligence, machine learning, virtual reality, blockchain, and chatbots. A critical assessment of the technology environment can inform research and development as well as provide an understanding of competitors’ efforts.
Government laws affect many aspects of our ability to run businesses effectively. From employment law to pricing, product safety and data protection, these legislative considerations mean that businesses must continually adapt to comply.
Global warming and the degradation of our environment is wreaking havoc on businesses of every shape and size. You should be aware of the impact on the ecological landscape, such as the growing demand for organic food. Are you employing sustainable practices or collaborating with the right partners?
Add to this the expectations from the new generation entering the workforce for businesses that are green and ‘doing their bit’. You need to adopt a focused green strategy – whether it’s about building efficiencies, recruiting compliance leadership and conducting sustainable marketing. Being environmentally conscious is no longer seen as the best-of-all; If you want to appear as an attractive employer and company to do business with, protecting the environment should be on your agenda. This can include small steps such as using recycled materials to larger commitments such as organizing a green group in your business that is in charge of your eco-initiatives.
All of these factors point to one conclusion for business strategy: To succeed in turbulent times, you must be agile. You can no longer put all your eggs in one ‘long game’ basket; Developing multi-year strategies has become a thing of the past and is not practical. As the world around you changes, you must be ready to adapt to rapid changes and identify strategic risks and opportunities.
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