Cannibalism is on
the rise around the world. There is evidence of it everywhere…
in retail, services, finance, manufacturing, rural, technology,
media and even in mining.
It’s dog eat dog.
With offers of 50% off retail and up to 5 years interest free,
the behaviour of some is rabid.
The small but rapidly growing drift to online sales is indicative
of a broader and deeper evolving trend. In a period of stagnate,
if not declining sales, the incremental factor of online sales
is further evidence that the broader retail sector is cannibalising
itself. Significantly, the increasing use and influence of the
internet is not generating more sales. In most, if not all cases,
it is simply redistributing the sales and market shares. This
is accelerating the importance of cost and overhead reductions.
A widening acceptance of the theories of Charles Darwin may
be appropriate, with implied endorsement of the need for structural
change, and fast.
CONSOLIDATION AND RATIONALISATION
Indigestion in a number of sectors will soon become apparent
to the marketplace and consumers as the acquiring entities are
made to swallow many rationalisations and consolidations of
businesses, brands, products and services.
Absorbing, integrating and in some instances dispelling cultures
will be difficult. And one is not talking of yoghurt. The dominant
force in those scenarios will inevitably emerge with enhanced
returns, market presence and positioning.
KNOW THY MARKETPLACE
A growing number of astute business leaders are dedicating resources
to the identification and analysis of opportunities for mergers,
acquisitions and strategic alliances with competitors, substitutes
and potential collaborators. For others the need to address
the issues of exit strategies and succession plans have become
paramount.
The risk profiles associated with such initiatives can be and
often are less than business development strategies which involve
increased capital expenditure, larger advertising and marketing
budgets and expanded inventories.
Capitalising upon and realising the potential will be dependant
upon business owners, leaders and managers being objective,
detached and strategic in their evaluations of the propositions.
Territorialism and unwarranted self-interest defensiveness will
be both unfortunate and inappropriate.
THINNING RANKS
The current market circumstances are unique. Projections of
outcomes which are based on history and past experiences may
have little relevance.
Certainly, middle ranking executives will be among the sacrificial
lambs. However, it will be the senior positions that will be
thinned, in some instances aggressively.
Stronger leadership will evolve and will be valued by financiers,
analysts, suppliers, associates, clients and consumers.
Fragmentation and replication, which have been characteristics
of many market places during the past decade, will decline.
This will provide for scope and flexibility for business owners
and managers to more effectively promote, position and utilise
brand marketing principles to secure and sustain market advantage.
During periods of volatility, clients and customers seek out
the reassurance of recognisable and trusted brands. As a consequence,
advertising messages for brand leaders will be more penetrable
and effective. Advertising expenditure can then be reasonably
reduced, and a greater concentration of the media utilised be
effected.
In short, marketing initiatives will be more effective, and
efficient, for some.
It is reasonable to expect that these projections will materialise
over a period of 18 to 36 months. After that, most growth will
be organic as individual brands, departments and franchise operations
recognise and pursue unfulfilled potential.
CAST OFF TALENT
For many of those talented senior people who will be deemed
to be casualties of the cannibalistic processes, the scope and
temptation will be to exploit their creative and entrepreneurial
skills and experiences.
And so from 2011, as the credit crisis retreats, confidence
and trust emerges and the true nature of capitalism will come
to the fore, a new generation of “start-up” businesses
will assert its presence.
The huge amounts of capital within sovereign funds and superannuation
accounts will quickly recognise the talent, potential and scope
for growth within these entities, which are or will be led by
strong, experienced and enthusiastic but previously misplaced
and displaced business professionals.
CONCLUSION
Survival today and in the immediate future will be enjoyed by
those who are the fastest, fittest and most determined. (The
Olympic spirit transcends all boundaries)
Strong corporate cultural bonds will enhance resilience, flexibility
and responsiveness.
Cannibalism need not and should not be evident with the ranks.
