Competitive horizon

Citation

(2009), "Competitive horizon", Strategic Direction, Vol. 25 No. 5. https://doi.org/10.1108/sd.2009.05625eab.001

Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 25, Issue 5

Why growing organizations can benefit from the downturn

Research conducted by Tenon has indicated that the economic slump is likely to provide more openings for companies that have been in business for between five and nine years. The accountancy firm surveyed 1,264 small and medium-sized enterprises and around 37 percent of respondents felt that the slump offered opportunity for them. Growth Business (www.growthbusiness.co.uk) reports the national UK average as 29 percent. In contrast, organizations two decades old or more were less likely to benefit from the current economic climate. Growing companies may not have lived through a previous downturn but Tenon believes such organizations will often have gained enough experience to adapt accordingly and exploit the situation. It is likewise argued that the greater experience of more established companies may be tempered by their limited flexibility to make the required changes. The company also predicts that online retailers, outsourced service providers, pawnbrokers and repair services are most likely to flourish in 2009. However, prospects during the same period are expected to be much gloomier in the automotive, leisure and hospitality, retail and travel sectors.

Food industry set for Eastern Europe growth

According to Leatherhead Food International, Eastern Europe can become a strong growth area for international food and drink manufacturers. The food research association cites relative political and economic stability in the region together with the maturity and recession characterizing markets in Western Europe as grounds for such belief. Some government bodies are welcoming outside investment into their food industries and easing of strict regulations furthers the attraction to foreign companies. Leading global manufacturers and ingredient suppliers are already making an impact and the report, as published by Food Navigator (www.foodnavigator.com), claims that growth in Central and Eastern regions is helping Europe to retain its 43 percent share of the global food and drinks market. Russia is noted as a good example of the strong growth in the region with the market in that country growing by 45 percent between 2005 and 2007. By 2010, it could be worth in excess of €200 billion. Dairy foods, soft drinks and convenience foods are among the products in particular demand among Eastern European consumers.

Rocky flight path

The latest survey carried out by the International Air Transport Association (IATA) reveals that many international carriers anticipate a difficult year ahead after experiencing a slump in both profits and demand over the final quarter of 2008. Fewer than 10 percent of respondents reported increased profits during the period. Survey results showed that prospects for 2009 vary by region. Operators in the Middle East were most upbeat about their prospects with two-thirds predicting higher profits. But the survey found gloomier expectations in Europe and the United States, where around 50 percent of participants believed that profits would fall. That four in every five airlines anticipate lower profits over the coming year reveals an even worse outlook in Asia. In a report published by the Australian (www.theaustralian.com.au), IATA also notes that less than 25 percent of airlines feel that passenger numbers will rise in 2009. Around half expect fewer passengers. The study likewise showed that the rapid slowdown in manufacturing and trade has impacted significantly on the level of air cargo and 70 percent of airlines surveyed are anticipating even lower demand over the next year.

Economic slump spawns hi-tech crime fear

Security experts believe that the global economic downturn will lead to a boom in hi-tech crime during the current year. It is felt that unemployment among workers with internet technology experience could led to some turning to crime out of desperation. Others may seek revenge against employers who make them redundant. According to a BBC report (www.bbc.co.uk) disgruntled workers can easily copy valuable data and place the company’s intellectual property at risk. Firms are advised to act with vigilance in order to safeguard their most sensitive data. The report also warns that the situation is likely to further exacerbate fraud, already showing an annual rise during recent years. Success of measures like chip and pin has been noted but this has resulted in criminals targeting more vulnerable areas instead. For example, figures show that last year Card Not Present (CNP) fraud increased by almost a fifth from 2007 levels, while online banking fraud in the UK soared by 185 percent. Experts believe that continuing development of the internet and related technologies can heighten susceptibility because of the increase in data transfer. They urge companies to put the necessary measures in place to manage data effectively and minimize risk.