Speaking of Business: Be ready to respond to threats to business

Q: How can I survive the changes in this economy? Our technology sales aren’t where they used to be. Should I downsize or ride out the storm?

A: Survival in business today requires attention to detail. The “Threat Level” of oncoming danger can virtually decimate a business in a matter of months. For that reason, the design of rapidly adaptable business plans and action programs are the lifeblood of companies today. As soon as somebody outside your niche sees your niche is viable and profitable, they may quickly declare war on your business. This is usually done one of two ways: 1) A major player in an affiliated area will launch a direct, head-on attack. 2) With acquisition, a major player outside your industry sees what you’re doing and tries to buy you out.

There’s a series of factors and forces over which you have no direct control that will change things within your niche. Ten of these are listed below:

1. Technology breakthroughs

Constantly occurring, these give an individual the opportunity to exploit the niche in a radically short amount of time. You have to keep your eyes absolutely glued on these technology breakthroughs. For example, with so many hand-held channel selectors available today, decisions of advertisers have been affected. McDonald’s, one of television’s largest advertisers, is now running its ads back to back on the four major networks because viewers are most apt to flip channels during commercial breaks. Thus, a technological breakthrough has affected McDonald’s advertising strategy, while McDonald’s isn’t even in the technology business.

2. Legislative rulings

You never know when legislation will step in and impact your business, either negatively or positively. For example, an ecological imbalance in the area could suddenly change the way you dispose of toxic waste and chemicals used in etching solutions.

3. Competitive aggression

The most obvious is when a competitor suddenly assaults you head-on because they want your niche. You have to be alert, not just to who the top competitors are, but where you think this competitive aggression might come from if somebody gets ambitious.

4. Influencing industries

Other industries have an indirect effect on your industry. For example, oil is an influencing industry because if we end up without it, we have numerous problems. In high tech, one never knows what these factors might be, because so much of what we do is manufactured offshore and imported.

5. Aesthetic design

Packaging has a direct impact. One example is how office buildings are built today with full-glass facades. With the glass exterior comes certain internal environmental concerns such as when the sunrays come in, the interior temperature rises, making it almost impossible to regulate the temperature without using more sophisticated internal computer systems.

6. Media impact

These are the elements that communicate a company’s message to its market. The technology industry doesn’t necessarily sell to its end users. They are marketed to other companies who bundle other products with their product, and then the assembled product goes on to end users. Rockwell International is one company that advertises just to establish identity in the public’s mind and promote its stock, but the average consumer will probably never purchase a Rockwell product.

7. Demographic trends

Over time a demographic trend can have sweeping, if not devastating, effects. Currently there are two major demographic trends that manufacturers target with media campaigns: baby boomers and senior citizens. The buying habits of “boomers” are changing as they go through midlife crisis. The senior citizen group is one of bio-media’s biggest target markets.

8. Critical resources

These are any elements or components in the manufacture or development of your product that, if limited, could dramatically hamper your ability to produce and market the product. The element may not be critical now, but it could be critical if there’s a change. Sometimes a competitor buys all or part of the company that makes a particular component, swinging the allocation of its product away from you.

9. Labor issues

Labor issues could be over anything job related. We see this sometimes with pilots, or when there’s a contract (such as the National Football League) that comes up for renewal and the discussion gets heated in the 11th hour. Suddenly speculation as to whether or not they’ll have a strike influences the stock price.

10. Natural disruption

Nobody knows when a natural disaster will occur. An alert company or executive can exploit the situation when one of these disruptions takes place somewhere else. In every instance an astute CEO can look at situations that affect your competitors, others in the industry, or yourself, and then make corrections necessary to continuously lead his niche.

In conclusion, whether you choose to downsize or ride out the storm is a personal decision. My advice is that you constantly be prepared to adjust and/or attack when necessary.

Greeley resident Russell Disberger is a founding member of Aspen Business Group, a Northern Colorado-based specialty-consulting and venture-capital firm assisting businesses in obtaining strategic growth. He can be reached at (970) 396-7009 or via e-mail at russell@aspenbusinessgroup.com.

on Facebook on LinkedIn