Two decades ago, if your organizational performance was lagging your expectations based on your market studies, your organization’s previous performance or benchmarking with other successful organizations in the same sector, the corresponding professional advice would have been to conduct an internal audit of your operations to diagnose their efficiency, effectiveness and economics, to discover the performance gaps and to identify and assess associated risks.
But this is no longer the case. Today, the reasons for an organization’s weak performance might very well lie at the strategic level, not the operational or financial one. In other words, the cause might lie at the very highest level of the management hierarchy represented by your strategy and business model – not at the bottom (procedures and processes).
The continuous, radical and dramatic changes in the political, economic, social, professional, technical, security and legal aspects of the business environment, whether at local, regional or international level have disrupted many long-held assumptions and practices and continuously changing the rules of the game for all business. Hence periodic and ongoing reviews of strategy and business model have become a vital task for small and large businesses and organizations alike. Those that neglect to do this soon find themselves out of the game, regardless of how great their initial potential for success is.
Perhaps the most prominent and apparent changes have been those of a technical and digital nature. Of note are the emergence and now-dominance of the sharing economy (gig economy), especially since 2008, and the impact this has had on even the finest details of our businesses strategically, operationally and financially. However, the reality is that these developments are nothing more than the tip of the iceberg.
You can read more about the gig economy here, in our article How to make a fortune in the gig economy.
Yes, regular internal audits at the operational and financial level are still important – more important than before, in fact – but most important is the need to review your strategy, business model and business plan frequently and regularly, perhaps once a year, at the very least. The purpose of this is not only to preserve your competitive advantage and market share (and perhaps even to get ahead of others), but also to ensure that you do not suddenly disqualify yourself permanently from the game.
Remember, you don’t need to wait until your organization has hit a low point before making the decision to carry out these reviews. If you do so, it may be too late, and it might end up costing a lot more in the long run. So, make a decision to stay on top of your growth plan and intervene with the right strategic decisions at the right time.
In the new economy, in a more turbulent environment and increasingly aggressive competition, it is of utter importance to stay agile, to stay flexible. Since some of the largest companies in the world are spreading into multiple industries, it is likely they will become your competitors too, often with much larger budgets, a normal business could ever afford.
With Amazon already in brick-and-stone retail stores for food and books, with Google in healthcare (and Amazon actually as well), in the oil industry and finances, and cars and medicine and AI, and HW and SW too, it is likely where there are profits, these multinationals will come after.
Among new business models are coming non-traditional ones like the sharing economy.
What is sharing economy?
It is an economic system in which assets or services are shared between private individuals, either free or for a fee. A good example is Uber – drive sharing company, where one owns a car and shares it with others for a fee.
Why is sharing economy important?
Sharing economy has its pros and cons, among pros being flexibility, independence, building community and better use of resources.
Flexibility: One of the things consumers appreciate when using or working in the sharing economy is ﬂexibility. In this market, one does not have to “own” what is being used – making travel, change, and schedules more customisable than ever. Simply get the app, check what kinds of transport is best suited to you, reserve it, and go.
Independence: Sharing economy doesn’t require specific working environments, so there is no need to remain in an atmosphere that doesn’t fit your personality. You can work where you want from and how you prefer to.
Better use of resources: A sharing economy helps consumers to earn money by renting out under-utilised goods or resources. For instance, renting your car in the form of Uber, and soon Tesla services will help you earn from your already owned assets. It helps to reduce waste and provides a way for items to be resold and repurposed.
Building community: A sharing economy is driven by its community. It is based on trust and collaboration between both its users and providers. Peer reviews and ratings are an expected part of every platform, fostering honesty and transparency, which are key components of a successful sharing economy.
The sharing economy has its pitfalls, same as any other business model, and you can read about some here, at our favourite tech blog, hackernoon.com.
Is your company not a good fit for sharing economy? It is just one model we have devoted this part of the article to show you. There are more. One of the best marketing models of nowadays is inbound.
The inbound methodology is a technique for building trust between you and your customers and business partners, promoting knowledge and expertise and establishing the brand in the ever-shifting markets. You can read more about inbound here.
Part of the inbound is understanding of your customers, often creating “buyer persona” a fictional model of your ideal customer based on real data, aggregating your real customers into a fictional one. You can read more about understanding your Arabic customer here.
And that is not all. There are more aspects of a successful business strategy. Subscribe to our blog and don’t miss our tips and tricks on how to develop your business strategy, how does strategy apply in the Arabic world, or how to create and explain your SWOT.