What the future holds
If we just sit tight through this economic blip, it’ll be business as usual after a couple of years and we can all relax, right?
If you’re among the 44 per cent of businesses who think that, you’re apparently sadly mistaken.
“There will not be a return to business as usual. The forces driving change will continue well beyond the technical end of the recession and the consequences will be permanent and far reaching,” says the foreword to the Transitions report by business services firm BDO.
It found that almost half of businesses think that we’ll all be back to normal after two years. But in fact there will be high levels of uncertainty until 2015 and the word “recovery” will take on a new meaning, suggesting change rather than a return to the way things were. The rise of China and India and technological change are to blame for the new world order, the report says.
For buyers, the challenges are evident. The report says the unsustainable growth strategies of China, Germany and Japan caused the current global imbalance, before adding: “Although the carousel ferrying cheap goods from China to the western world continues to operate, these goods have been paid for with IOUs.”
So buyers have a huge responsibility in this new era to pursue sensible purchasing strategies while businesses adjust.
What does the future hold for your industry?
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Two easy predictions following the Recession / Downturn.
1. There will be a wave of mergers on the lines of the Kraft/Cadbury and Schlumberger/Smith amlagamations as struggling corporations try to achieve economies of scale.
2. Some eager “Asset Strippers” will reap huge benefits from acquiring underpriced properties and hardware from the dissolute Banks and outfits overstretched from ambitious mergers during previous Boom years (see 1 above).
Within three years we will hear the cry for de-mergers and downsizing as the egoists are taken to task.
Suppliers need to quickly learn that there will be no going back. Harvard Business Review says from November 2008 we experienced an “inflection point” not just with the economic challenge but also because Government seized the opportunity to gain power in the business world and force their policy or compliance agenda. At the Suppliers Academy we believe that suppliers will have to play three dimensional chess in the future of Capacity(Quality) Costs(Price) and Compliance. That sounds more like a Darwin situation of the survival of the fittest or will it be the evolution of a new species of supplier.