Australians are increasingly confident that we’re now past the worst effects of the global slowdown over the past 18 months, with both the David Jones and the Aldi ends of the retail market showing good signs of steady growth over the year.
Gary Morgan says: “The weekly Roy Morgan Consumer Confidence Rating has risen to a near two-year high of 124.9 (up 3.7 points) over the past week – driven by a rising number of Australians expecting good times in the future, with 43% (up 4%) expecting good times in the next 12 months and 50% (up 2%) expecting good times in the next five years.”
All of this should provide a prod to smart companies to get moving and develop effective marketing plans for the remainder of this year. As a former PM has said – the times will suit us – but the reality is that all is not as it seems and those that wait for better times are going to miss out.
We are caught in a time warp with major reconstruction about to occur, with world currency movements and the clash between the conservatives wanting to cut back the stimulus to avoid recurrence of inflationary pressures against the majority of G20 national treasuries enjoying running their countries commercial investors.
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Our Kevin is jawboning these national players to lock in new rules that will help the developing nations – both in the financial stakes and in permission to pollute – in order to reduce the risk of a W shaped recovery with a rapid collapse in business growth just as he is heading to an election.
Rudd wants the G20 to be his continuing arena to push for balanced growth as the stimulus packages are slowly withdrawn, a beefed up IMF and funds for developing countries impacted by moves to tackle global warming, and the implementation of a peer review process where countries present their approach to risk management and recovery to each other for a check up.
The Financial Stability Board has already been commissioned by the G20 to come up with new rules and regulations to stave off a return to the bottom of the pit and despite the US Congress rush to restore protectionist measures (eg. the China tyre tariffs) there is some support for Australia’s campaign for a global ditching of the old growth model, constraints on greed and a move to finalise global free trade arrangements.
Smart companies will take this period of global reconstruction and rising levels of business confidence with a grain of salt and make the necessary moves to consolidate their medium to long-term customer relationships.
The first step will be to manage inventories and forward orders against identified cashflows to ensure that the business does not expand faster than can be carried against current earnings.
The next step will be a heavy emphasis on innovation and market penetration in both the domestic and international markets to build a buffer of forward orders while confidence is rising. This means spending time on business development and marketing plans with the key sales staff and strengthening online and advertising focus.
The final step will be to cut back on those elements of the business that have been creating losses that will not be recovered, getting better staff teams that are highly cost conscious and building links to industry associations that are developing trade missions.
Relying upon the benefits of the stimulus package, lower interest rates and the coming infrastructure payouts will only provide a bridge to a more sustainable growth path. When governments stop printing funny money, the game of musical chairs will begin again with less room for expansion beyond the commodities boom and the emergence of new global financial structures following Copenhagen.
The danger is to believe that the current rise in consumer confidence will carry the tide for all boats rather than those that start their motors early.
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Dr Colin Benjamin
Entrepreneurship and Strategic Thinking Consultant
Marshall Place Associates offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Contact: CEO Dr Jane Shelton, Phone +61 3 96400099