Four ways to find new opportunities for a business
What has worked so far does not need to continue. This maxim must be on the track of all enterprises seeking to maintain and develop. Under current conditions, an estimated 50,000 companies will go bust in Spain by the end of the year due to health restrictions and a shrinking economy, according to estimates by business consultancy fti consulting.
Therefore, rethinking the business model is the lifeline of companies hoping to succeed in this complex environment. Chain B understands this& The B hotel, while barely visited, has converted its space into a shared area for teleworkers, an activity that several of its agencies are still maintaining. Or a high-end sports car dealer, which has been transformed into a club offering luxury car sharing. "Their assets are the same, but they have reshaped the value proposition they provide to consumers," said Joan riera, a professor of innovation and entrepreneurship at esade strategy and managing director. To achieve this goal, experts put forward mechanisms to promote digitalization, specialization or internationalization.
' How to identify the problem as a business model?
The decline in company revenue is an obvious result. This may be due to many factors, some of which may not be in the employer's sight. Riera offers some clues to identify them:
· When changes in the environment develop faster than changes within the company. For example, a competitor has developed an application to manage online orders, and the business has not yet been proposed.
When a new competitor enters the market, its sales start to be higher than the industry average.
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· When the buyer loyalty index drops, that is, the time when consumers stop repeating transactions.
· The average amount per purchase is reduced.
Santiago Rom á n, director of the master's program in innovation and entrepreneurship at obs Business School, said that "entrepreneurs must be able to capture the nuances that warn that things are not going well". He added that clues also appear in customer comments or employee attitudes.
Intuition plays an important role in this task. "We have to be reminded that what we do doesn't always work. Above all, take time to reflect, "warns Pascual Station, director of the Master of Entrepreneurship program at iebs Business School.
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Digitalization, a universal step
Digitalization has proved to be the key to the survival of Spanish companies. Without this process, 78pc of small and medium-sized enterprises (SMEs) will have to make drastic decisions such as temporary closures, concluded a digitized study of small and medium-sized enterprises in the context of the pandemic covid-19 conducted by e-commerce site eBay and market research institutions.
Big companies have rethought their business models by promoting the use of technology. This is the case with the Postal Service, which enhances its parcel service by managing the data it generates in order to improve the efficiency of goods at a time when e-commerce is evolving; And Domino Pizza, fast food companies have tried to use drones in Australia or self-driving cars in Germany and the United States.
Any company can use digitalization to realize its own interests. According to a survey released in early May by software company Toolsgroup in partnership with the International Association of Supply Chain Management Professionals (cscmp), 42% of organisations have accelerated plans in this area because of the pandemic.
Its main advantages are cost savings and improved process efficiency, but it is also used as a lever to change business models. Digitalization provides companies with information about the operations and profitability of their own processes and business lines. As well as their customers, which enables them to adjust their quotations.
Consumers are more digital, and information and purchases are made through different channels, including physics and the Internet. "It's ubiquitous and it's done most of the buying process [from the journey you need to the purchase of a product or service] before interacting with the company," sergi ramo is the founder of Growz Consultants, an organization that specializes in mixed (face-to-face and online) sales. Therefore, it is very important to accompany you throughout the journey. Today's technology allows this.
Specialize to compete better
It is no longer the mission of every enterprise to provide common products and services that everyone likes and consumes. Digitalization provides an opportunity to learn more about consumer needs in order to design products and services for specific niche markets. This is something big companies know very well. And think that small and medium-sized enterprises should learn lessons from it. "[Multinational companies] put their energy, time and resources into specific areas to create value in order to be very competitive in that area," he said.
In order to cope with this change and become specialized, it is necessary to identify trends and predict changes in consumer habits. This does not mean giving up the work already done, but opening up a new course of action.“Lo importante es adoptar una nueva identidad”, opina Ramo, que pone como ejemplo a la marca de alimentación y cosmética Unilever, que crea submarcas como Rexona, Lipton, Knorr o Hellmann’s para entrar en otros mercados. Riera referred to the case of a screw company that has become a supplier of dental implants, leveraging its expertise in fixation and construction.
Looking for opportunities beyond national boundaries
Spanish company's kpmg international expansion report: The new global scenario concludes that nearly eight in 10 managers surveyed are exploring new international opportunities in the wake of the covid-19 crisis because they believe foreign businesses are less affected than domestic ones. In fact, the economic recovery reached the United States and other European countries faster than Spain.
According to the founders of growz Advisors, internationalization can be solved either directly by doing business in a new market or through local partners who already know about the business. Experts acknowledge that the process is neither quick nor cheap. It is necessary to learn the operation of new markets from various angles: Laws, needs and competitors, etc. However, e-commerce has opened up new sales opportunities for local enterprises. Today, platforms such as Amazon or aliexpress offer access to distant markets. However, it is not easy to fill these gaps, because the competition is more intense than domestic competition.
Alianzas con terceros
La unión con otra empresa genera sinergias que benefician a ambas, especialmente en momentos de crisis. He pointed out that this type of alliance is very attractive to small and medium-sized enterprises because they enable them to gain competitive advantages from large companies, such as negotiating with suppliers, launching promotional activities, promoting full service and even internationalization.
There are clothing stores that display jewelry accessories from the same community and collect sales commissions, and restaurants form alliances to place large orders with food wholesalers and get cheaper prices. It also jointly promotes and offers discounts to consumers. However, there are risks in this strategy. There is a risk of power struggle and management differences.
Another interesting way for the Romans to grow in uncertain times is to do so by buying competing or complementary companies that could experience bad economic conditions. "The crisis environment is conducive to this kind of business operation," he said.