Tim Gibson: Don't just survive - look for new opportunities

Opinion

In sport the best opportunities often pop up in broken play, when old strategies, tactics and plays no longer work.

The recession is a game-changing event for businesses worldwide. The certainties of the past few years - easy credit, rising asset values and strong global demand for products and services - have gone.

All businesses need to adjust to this reality, but clever and courageous ones are also spotting new gaps opening up in their opponents' defences and making a play for them.

A number of companies are seeking - and finding - the money they need for long-term growth projects, acquisitions and research and development. They are often seeing opportunities to challenge larger competitors.

One company that has gone public with its growth plans is Hamilton software company NetValue, which has got a multimillion-dollar capital injection from a United States venture-capital firm to develop and globally market its software.

A propensity to have faith in your abilities while grounded is highlighted in research done by New Zealand Trade and Enterprise on critical factors for surviving the recession.

Four of the seven factors identified relate to coping with reality (focusing on the core business, improving efficiency, getting rid of non-core operations and business restructuring), while three are about proactively grabbing opportunities (acquisitions, increased advertising and marketing and more research and development).

The danger is that businesses put too much emphasis on just surviving and not enough on identifying and pursuing opportunities.

That is not to ignore the fact that these are extraordinarily difficult times for businesses. We are now into one of the largest shocks to hit the world economy in more than 50 years. It is turning many business strategies and mantras on their heads, and when businesses emerge from this recession they will have to deal with a different world from the one they have been used to for most of this decade.

It will be a much more conservative, less extravagant marketplace. For the foreseeable future, consumers in New Zealand and in our export markets will be tight with their money and they will be much more focused on value and on the origins of products.

This post-recession world may look grim, but some of the changes will play to the competitive strengths of New Zealand businesses.

Kiwi businesses are small and adaptable. International perception studies show our business people are seen by their business partners as resourceful and flexible. The back-to-basics attitudes of businesses and consumers will suit our companies well.

Our clean, green image is going to be an invaluable marketing tool in markets where consumers want assurances and personal connections with the products they buy.

The focus of most of our exporters is on countries and products that may be more resilient in the recession. Australia, by far our largest export destination, is shaping up relatively well. Most Asian economies including our largest market in the region, China, are still growing. One of the likely consequences of the recession is that regionalisation, while not replacing globalisation, will become a greater focus for trade. The Asia-Pacific region is one where this is predicted to
happen.

Also playing into our hands is the fact that the world still needs to eat. So while consumers may be buying fewer flat-screen televisions, they will still be buying our dairy products, meat, seafoods and fruit and vegetables.

But there are challenges. Too many New Zealand businesses, despite operating in a small, open economy and being more at the mercy of the world economy, are under-prepared for changes in market conditions.

The same perception studies that show where our business people are strong also indicate where they are weak. Many times this is the result of a reluctance to make long-term commitments to markets.

Building relationships with business partners takes commitment and resources, including where possible a permanent presence in a market.

In the post-recession world everything is going to be a harder sell for exporters and domestically focused businesses alike. The best way to survive and grow in this tough environment will be to get up close and personal with business partners and consumers, to get inside their heads to understand what they want, why they want it, when they want it and where.

Then a company must adapt to meet these expectations. Just as the companies that will do best in the recession will be those that cut their cloth to fit, the ones that will do best in this new emerging phase of the game will be those that prepare for the new realities. Now.

* Tim Gibson is chief executive of New Zealand Trade and Enterprise.