Act now. How to remain competitive is the strategic issue that may hurt your business in the future (short and long-term).
During these past weeks I have been following the news about the Colombia Free Trade Agreement (FTA) and its consequences for farmers and producers. Garay, Barberi, and Cardona (2009) prepared a study to determine the impact of the FTA negotiated by Colombia and the United States on the Colombian small farm economy, the effects in national income, and other aspects. The study also estimated the impact of the new market conditions, potential production levels and expected changes in domestic prices.
A small business owner and good friend argued when I showed to him data from the study that “nobody could have predicted the results shown in that study”. In business, for obvious reasons is hard to predict results. However when a researcher uses a technique called north-south-east-west-and-center to analyze the potential effects of a decision, the probability of portraying an accurate picture is high, very high.
In the above-mentioned study, the researchers used comparative statistics, analyzed the average behavior of domestic and international prices, cross and measure diverse market conditions, employed calculations using direct and indirect effects with current, substitute, and complementary products. My goodness, the researchers quantified every single variable to determine the effect and the results were the same: the study concluded in 2009 FTA was going to have a devastating effect in the farmers economy.
I have nothing against trade alliances. I think they are great for business and for consumers. If you want your business grow creating strategic alliances with other companies is always a good idea.
However, businesses are deeply affected by government regulations. And in the case of the trade agreement, one can argue that the Colombian government failed to enact policies that could help farmers’ businesses. But let’s leave the politics to the politicians from both countries take care of the topic.
What we can learn from the current situation in Colombia?
Ok. Let’s take care of the business side of the equation. How you compete in a marketplace where you have: 1. New products or technologies; 2. Failed government policies; 3. Lack proper training and education to compete. 4. Business loans with high rates (when they are available). 5. Lack knowledge of the market trends (which made you ignore signs, studies, and articles that could have affected your future). Note: Did the above five threats to a business sound familiar? I was not only describing the situation for farmers in Colombia because of the FTA. I was describing (on purpose) the situation for any small business in the US too.
How you remain competitive in such conditions? Either you wait for your government to act (and die and be criticized while waiting); or leave all up to the God you follow (and die while waiting too) or you have to act NOW.
So let’s bring the action! It starts with what your parents told you every single day: education is the key to your success.
As a leader of the business, you have to start by training yourself. You also have to train your employees. Then you learn about new technologies available in the market to improve your methods, your processes, improve the value of your product or services or create a new value. Learning about new technologies will give you a competitive edge and help your business remain in the market. Additionally, it is time for you to have a clear and better understanding the new conditions of the market and adapt. Don’t complain. Your new strategy should be: adapt to the new market.
According to the site brainyquote.com, Steve Jobs used to say “our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.” Innovation and reinventing processes were one of the keys of his success as leader of Apple.
P.S.: Go and tell a farmer, he/she needs to innovate. “Good luck” (in Taken’s tone of voice).
Garay S. L.J, Barberi G., F., and Cardona L., I . (2009, Sept). Impact of the US-Colombia FTA on the small farm economy in Colombia. Retrieved on August 28, 2013 from http://www.oxfamamerica.org/files/colombia-fta-impact-on-small-farmers-f….
Brainyquote.com. Retrieved on August 28, 2013 from http://www.brainyquote.com/quotes/authors/s/steve_jobs.html#qtsb9CCZw4FA…