Throughout September our blogs have focused on the considerations and factors that should be taken into account in preparing strategies for business change.
Some final thoughts before October, when our blogs will focus on the next step, of implementing the plan and making any changes.
Fundamental change or partial adjustment?
For some businesses, a review may identify the need for fundamental change but for most it will identify areas for improvement and most likely cost savings.
Those facing fundamental change are likely to be the result of internal factors such as resource or capacity issues or external ones, such as markets disappearing due to the EU referendum, or costs increasing due to the impact of exchange rates.
In this scenario the business will need to transform itself with a completely new offering. A good example is the recent closure of all the BHS stores and the subsequent announcement of plans to set up an online BHS shop instead.
Another example is that following the Brexit decision, businesses that sourced their manufacture overseas may now have found that it is actually cheaper to manufacture at home to take advantage of the lower export costs following the changes to currency exchange rates, particularly £Sterling, making UK export prices more competitive.
In this sense, UK could be about to reverse the trend of the last 30 years, of closing down factories to outsource the manufacturing of goods which can now be made more cheaply at home. In the UK, if energy prices and the value of £Sterling remain low on-shoring manufacturing would make sense, but it will require significant investment in manufacturing capacity and the training of labour.
Essentially, therefore, reviewing your current business model is not only about understanding the current and likely future of economic conditions, but also what your business is selling and asking difficult questions about changing customer needs and behaviours. Any delay in making difficult decisions can leave a business behind those who are more proactive.
While transformation may be needed by most businesses, some parts of the business will need attention to remain competitive.
Continuous improvement, flexibility and agility make sense, given the opportunities and competition of a global marketplace, and particularly in the aftermath of the EU referendum.