The time to get ready for sharpening your margins and shaving your costs is now, before the crisis knocks you down beyond hope.
Of course, economic activity would be unpredictable. For sure, recovery would be muted. Leaders face an unprecedented level of urgency and complexity as they reopen their businesses. As an Accenture report also advises, this is both a time of need and an opportunity.
New business models
It is the right turning point for companies to build the competencies they wish they’d invested in before. They can easily go digital with cloud infrastructure and take data-driven decisions. They can have more variable cost structures. They can embrace agile operations and automation. They can create stronger capabilities in e-commerce and security.
This is where a global services model can help enterprises to dilute risk and get an edge in an operational sense. They have to repurpose and reshape their supply chains by injecting resilience and responsibility.
Then there is the short-term liquidity challenge for which businessmen have to address cost and profitability issues. Sales and revenue figures are taking a dip while costs are ballooning. Investment in new technology and models, then, is no more a luxury or some nice-to-have feature. It is a big liquidity imperative now.
It is the best time to redefine a lot of old business approaches. More so in the wake of so many uncertain supply chain disruptions in various industries. A study, based on more than 800 disruptions, unravels an average 7% decrease in sales and 11 % increase in costs. It shows long recovery periods ranging from months to more than two years.
What worked before is already out of the question now. Everything has changed and will continue to change.
Now is the time to take out the low-profitability products. Now is the time to invest in SKUs that are real stars. Just rebalancing the inventory in light of performance and cost impact can bring massive gains. Dump the products that never helped and will not help but were somehow sticking on to the list. Even the new products that are tempting now, or will tempt ahead, should be assessed for the hidden cost of complexity and unpredictable revenue opportunity.
Be relevant. But be less complex in what you are offering.
Get on to new marketplace platforms
You have to be on a B2B marketplace that is in line with today’s needs of speed, automation and agility. You need to be on a platform that connects suppliers, buyers, importers and exporters from all over the world. Such a B2B solution should simplify domestic and global business with features and tools like reviews, intelligent ratings and rich engagement opportunities between buyers and sellers. A Marketplace on Tradeleaves platform, for instance, will bring simplicity and help visibility in your relevant category, be it leather, handicrafts, carpets, or business services.
Almost 80% of companies are accelerating their automation initiatives in response to COVID-19 but only fewer than 50% of these will achieve their automation performance goals. Just picking technology would not be enough. Picking the right one that can fix operational and supply chain issues while strengthening your product strategy, would make the real difference.
Simplicity and quick response will be the new business denominators.
Invest and Progress
As a report on the COVID impact by Bain & Company shows, the recovery phase would not be a straight path. Operations would have different time-tables across industries and regions. The recovery would be asymmetric for all companies with different global footprints and supply chains. You can make a choice: Would you be among the 47% companies which emerged as ‘rising stars’ (S&P Capital IQ) or would you be among the 89% ‘sinking ships’?
Step forth. Step out. But do so as a rising star and not as someone with a bulky and complicated product strategy, heavy on costs and light on revenues. Change the equation and be in the right place. Beat the COVID impact with clarity and a powerful product strategy. Beat it like a smart business.