Earlier this week I listened to a radio interview with Sir Martin Sorrell, the chief executive of the advertising and marketing services giant, WPP. During the interview he was asked about the impact of the Chinese economic slump on major international corporations. Sir Martin replied that we should expect a period of tepid global growth and so managers must manage costs effectively if their businesses are to succeed in the months and years ahead.
While these actions are important, I don't see them as being the real differences between future 'winners' and 'losers'. The key to winning in a low-growth economy is to be able to build and exploit a series of distinctive and lasting competitive advantages, such as brands, intellectual property, other assets and distinctive organisational capabilities. A rising tide may float all boats, but only the most seaworthy vessels will excel in more demanding tidal conditions. Similarly, it is only those brands and organisations that have a superior offer and/or business model that will prosper in more challenging economic times.
What compelling competitive advantages does your business possess, and what actions are you taking to build and exploit them so that you continue to thrive and grow whatever the economic weather?
