Most small
and midsize companies don’t need to be experts in fiscal and monetary policies that
affect the USA economy. Instead, they are
better served by leveraging the health, opportunities and threats presented by
the economy in which their business operates.
Step one, define your economy based on
microeconomics and macroeconomics factors.
Microeconomics
Internal Factors Help You Assess Trade-Offs of One Decision Vs. Another
- Based on the demographic [B2C] or firmographic [B2B] health of your target markets, should you continue your penetration strategy
or develop new target markets?
- Consider the demand curve for your current product line. Do you have enough influence in your category to shift the curve to the right or do you have no choice but to maintain or increase share in a static market? Or, should you develop new products?
- Based on the laws of supply and demand, does your production capacity present an asset or liability for successfully implementing your business strategy?
- Do technology advancements enable you to further your lead over competition by reducing labor costs and raising process consistency to the next level?
- What are the leading and lagging indicators for your business? Consider marketing and sales funnel
health as leading indicators. Lagging indicators can be derived from your quarterly sales analysis along with close rate, deal size, length of sales cycle, average discount rate, # products per deal and the # of leads required to close a deal.
Macroeconomics
External Factors Affect Your Company, Customers and Partners
- Local, state and federal regulatory policies and taxes will help you to determine where to expand your business presence.
- Building permits, new business startups and consumer confidence identify healthy areas where you should direct your marketing.
- What effect should inflation have on your pricing strategy?
- Do interest rates enable you to invest in new technology, plant and equipment?
- Do unemployment rates affect your ability to find the right people?
- In which global markets can you compete by exporting?
- What should you do if imports are eroding the profitability of your target markets?
Step two, now that you have defined your
economy, add this facet to your ongoing market
research process
so that you can make timely decisions relative to
growing your business and minimizing risk.
