Tuesday, March 12, 2013

Too Much Spending?

Not long ago, I heard someone say in a conversation that if we cut our defense spending through sequestration then Iran was going to take us over. Granted, our military does a lot but still I doubt Iran is going to take us over. Our expenditures are half of the world's total. Our spending is more than the next 7 countries: China, Russia UK, France, Japan, India. Our spending is 100x that of Iran's. The states' National Guard budget is 4x that of Iran's. We'd have to cut our defense spending by 90% in order to be on par with them.

However, if we cut defense spending in the wrong places perhaps Iran will take over. It won't be by shear force, but it could be by finding the weak spots further weakened by budget cuts.

How have you evaluated your competition? Have you stopped worrying about any of the little guys? Perhaps you are the little guy.

One of the helpful strategic planning exercises is contemplating how you would ruin your own company. If you were the competition, where would you focus your efforts to burrow into the market? If your customers knew what you know, how would your competition pull them away? What slow drips are irritating your customers that someone else can fix quickly? What could be the offer they can't refuse?

Your competition may not be able to overwhelm your business now, but can they make inroads that will weaken your market position? What thin wall or veneer in your competition's customer experience can you exploit to your benefit?

It's not always cost. However, too many companies used to think overseas competition was not going to amount to much. Some no longer exist here. Even with those lessons from the past 40 years, some companies are still oblivious believing that logistics, technology or some other barrier will prevent a serious contender from entering the domestic market. Be warned. There could easily be some other mechanism. China is flush with dollars; perhaps they'd be willing to give extended terms to your customers. India can provide top-notch advisers on technology design easily and prevent any project downtime by working when the US is sleeping.

The past battles are not necessarily tomorrow's. Evaluate where you need to be reinforcing and upgrading your strategies and tactics. The more you have a culture that's striving to be the best and you have high levels of collaboration and systems-thinking, you are less likely to be blind-sided. Your people will share the information and take responsibility and stop the drips.

No comments:

Post a Comment