Not knowing whom to believe, Peter finds it difficult to make decisions ranging from hiring staff, increasing production or moving into new markets. He fears that if he commits more resources, he might be badly hit if the economy turned for the worse. However, he might also be losing opportunities should the economy improve for the better.
Starting with his objectives, Peter finds that there are roughly 3 options he can choose from:
1. Merely want to survive, and hence would want to be as conservative as possible; or
2. Would like to maintain his current market share, and explore further opportunities if the economy stabilises; or
3. Prefers to seek out hidden opportunities during uncertain times, and get ahead of the competition
Peter then analysed his financial situation as well as gathered feedback from the market. Since Peter's company is financially healthy, there's no need to be overly conservative. While there might be hardships and difficulties, survival is not an issue.
Hence, Peter's choice will be between options 2 and 3. Before he commits himself, Peter decides to identify and understand the possible Threats that might pop up during uncertain times.
What didn't Kill You will Make You Stronger?
The good thing about a weakening or uncertain economy is that it tends to affect everybody in your industry, including your competitors. The difference is that if you have better cost-structures than your competitors, you are more likely to weather the economic storms better than others.
On the other hand though, some competitors have cost-structures that are as good, if not better than you. Hence, in difficult economic times, they might still have the budget to gather more resources to beat you.
As such, your biggest Threat in an uncertain economy may not be the economy itself. It could actually be your strongest competitors. If you are too conservative to stop growing your market or engaging your customers, you might be squeezed out by your strong competitors.
Having understood these hidden Threats, Peter decides to take the following actions:
- Train his existing staff to deliver better performance. If it is a risk to hire more people during uncertain times, perhaps there might be less risks to train up existing employees so that they help you beat your competitors. (It's less risky because employees are not likely to leave after the training during uncertain times).
- Spend more quality time with key and emerging customers, even if they have reduced their orders or have postponed their purchases. If you don't engage your customers adequately, your strong competitors may be stealing them from right under your nose.