David Rhodes and Daniel Stelter of Boston Consulting Group consider several scenarios which they predict could dramatically impact American businesses in 2012. In their report "Collateral Damage; What Next? Where Next? What to Expect and How to Prepare" (download a copy here, through www.JohnMauldin.com) the authors hypothesize scenarios including:
- Successful Muddling Through...(in which) "the West experiences a long period of low growth and deleveraging, while emerging markets reorient their economies toward more domestic consumption - and thereby enjoy continued reasonable growth."
- Recession with Deflationary Pressure..."such a scenario could replicate the Japanese experience of the last two decades"
Steps to Prepare
Although the scenarios should be concerning for every business, the good news is that some appropriate planning and proactive initiatives can substantially insure against catastrophe in either situation.
[testimonial by="David Rhodes & Daniel Stelter" from="What Next? Where Next? / Boston Consulting Group, Jan 2012"]
In such a scenario, management should emphasize costs and efficiency, while looking for growth opportunities in emerging markets....Look for new growth options beyond the home market. In order to avoid the "top line cliff" if domestic demand declines...look for growth options abroad, especially in emerging markets - organically or by acquisition. Of course, so will many of your competitors. The key is to act decisively and aggressively....Make decisive moves that change the game...companies should consider bold strategic moves...may be the best time to make aggressive corporate investments....invest in marketing innovation..."
Chasm between concept and execution
But we know from conversations with many companies that international business is an appealing intellection concept but an overwhelming one
in reality. Companies often respond by concocting numerous rational and self-reassuring excuses for their failure to develop business internationally (too busy, too expensive, too risky, etc.) rather than make the strategic decision and commitment to do so. Many companies just don't dare!
Step up in '12 and take the initiative. Act decisively, even if you don't anticipate dire scenarios. US Dept of Commerce and SBA research indicates that companies which export are substantially healthier, more resilient and more profitable than those which don't. Don't those sound like desirable outcomes under any circumstances?
Consilium Global Business Advisors assists companies in planning, preparing and executing global growth initiatives. Working with Consilium helps companies hasten success, reduce risk and balance the workload associated with launching a new international business development initiative. Contact us today to explore how we can help your company.