Business Strategies in Times of Poor Economic Growth

Best Growth Stock – Times of poor economic growth strain the capacity of senior management to address changes that threaten the life of the company. To deal with it is necessary to have a performance-oriented creative innovation, ensuring strategic flexibility.

In recent years, companies in the world have faced unexpected situations that have threatened its survival. It is worth remembering as the attack on the World Trade Center transformed the sector of air travel, technological change and consolidation of the Internet have led to industries such as music industry to have their income reduced as a result of increased online song downloads ; also phone companies have had to create new services by the presence of alternative media such as Skype, the accelerated development of social networking has changed the way companies interact with their customers, the industry photo prints has been taken be transformed as a result of the advent of digital cameras, fast food restaurants on their menus incorporate new alternatives as a result of customer concerns to healthier foods. The examples presented are perhaps the most obvious, but not the only companies in the world have experienced moments of turbulence.

Business turbulence is the result of a series of events, in some cases unpredictable from demographic, economic, technological, regulatory and globalization. As a result of these changes, the environment becomes unstable (dynamic), the ability of foresight on the part of companies is shrinking (uncertainty) and understanding the environment is increasingly difficult given the variety of activities there are (complexity), this affects the normal functioning of the sector (customers, competitors, suppliers, distributors). There are changes in customer preferences, competition for promotions and pricing, changes in composition of competitors, market saturation, and the emergence and strengthening of substitutes.

A poor economic environment expose the ability of top management teams to take decisions and make adjustments that allow them to at least do not see their income reduced. However, the turbulence is also an opportunity for companies to take command of the sector. Following them, have emerged in recent years best seller where the sample is placed by some companies to address turbulence. Although there are companies that face the turbulence have improved performance as a result of the implementation of a system that has three functions: 1) monitor the environment, 2) allow design scenarios, and 3) selecting and implementing new business model.

With monitoring, the company has an early warning system, which in addition to identifying the most obvious signs of the environment and able to assess how much has changed the environment in which the organization is embedded, and answer the following questions: What models business are being developed or may arise?, Who creates?. The system is to identify changes in demographic, regulatory and technological developments that allow the company to evaluate the magnitude of the effect of turbulence, and the impact of the dimensions of dynamism, uncertainty and complexity in the sector.

The second phase consists in an elaboration of scenarios to respond togrowth , seeking solutions to cope with the discontinuities. Not enough to design the sets, it is necessary to build the strategies for each of them, and monitoring indicators.

Finally, the company must select and implement the new business model, leading to adjustments are made to systems products, markets, organizational structure, human resources, assets, processes. At this stage there must be a willingness to make the necessary strategic changes that have been perceived, as not all organizations are equally capable of change.

For these changes to the content of the strategy to give their results, companies must develop dynamic capabilities that will help cope with the turbulence when it is present, but to overcome new turbulence in the future, he has succeeded in generating a dynamic adjustment process . These dynamic capabilities are not acquired in the environment, arising from internal processes developed by companies supported by the management group cohesion, a key element to achieving a successful deal with the turbulence, which is when the members of the management team is so related to each if the momentous decision is something that is achieved quickly and accurately.

In short, the phenomenon of poor economic growth is a moment to tests the ability of senior management to address environmental changes that threaten the life of the company. And to deal with it is necessary to have a performance-oriented creative innovation, ensuring a strategic flexibility that allows to face difficult moments in the best way possible and be able to make decisions without perfect information.