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Monday, June 15, 2009

Your Competitors Are Falling Behind - Are You?

There is no doubt, we are in some very tough economic times. Some experts call the current recession the worst since the Great Depression. Regardless of your individual situation, virtually all of my clients are feeling the crunch. With cash reserves waning and consumer confidence in an economic turnaround low, it's no wonder businesses are holding onto their capital for dear life.

However, just as certain as we are in a recession is the coming economic turnaround when growth will resume. When this happens, where will your business be? Consumers that have made their cars last, let their clothes wear out, allowed their houses to fall into disrepair, and generally went without to make their budgets stretch will be looking to buy all of these goods at once. This is going to create a steep and sudden increase in demand for goods and services of all kinds at the end of the recession. Companies that have positioned themselves to ramp up production quickly will be able to take advantage of this and grab market share from weaker competitors that are not prepared for the needs of their customers.

My field touches many manufacturers across many industries. I have noticed that a large percentage of companies have entered "survival mode" and have slashed technology budgets to practically zero. Employees are not being trained and engineering solutions are being allowed to become outdated. Although this appears to be the correct approach right now, these companies are going to find themselves struggling to get their technology up to speed and their employees trained while dealing with consumer demand that is at a level higher than before the recession began. This becomes an even larger problem if a competitor has been smart enough to hang on to their experienced employees, keep their technology updated, and keep their employees trained.

If you have stayed competitive, then you will be laughing all the way to the bank while your competition shakes their head. If you have "survived" by hanging onto every spare penny and cutting corners with your experienced employees and technology, you may find yourself trying to survive for other reasons. Cut where you have to, but take advantage of this slow period to keep your capabilities and your company ahead of your competition and ready to grab market share when things rebound.


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