It’s 2018. Many companies have evaluated 2017 and identified lessons to learn for the future. Perhaps that will translate into a new or modified strategy for improving your company’s competitive position. We set ourselves the same task at Atlas Copco Rental Europe. I would like to share a few points that you, as a company, can hopefully use when reflecting on your business plan. My advice? Look in the mirror and ask yourself whether you still have the right plan. Is your business shaped to fulfill your customers’ needs? Can your business processes cope with the high degree of change?
My three pieces of advice: be flexible and maneuverable, focus on your core business and opt for sustainability.
- Be flexible and maneuverable
Markets are changing rapidly. Customer expectations are sky-high and constantly changing. Thanks to globalization, there is also new competition from all corners of the world. Entire business models and processes are often called into question. So stop and think about change. Gain insight into your customers’ expectations and embrace these. Take nothing for granted, realize that nothing is eternal. Continue to innovate and transform; this is a must in order to survive and be successful. All areas of the organization must share this awareness. It seems simple and obvious, but there is often too little anticipation of change. Make sure you are agile and can quickly adapt to the changing needs of your customers. Temporary increase in capacity? Make sure that your production speed can be quickly adjusted to fluctuating demand.
- Stick to your core
A recent study from EY revealed the following: “Companies that segregate their core activities from your non-core activities have four times higher revenue vis-a-vis companies that don’t”. Ask yourself what exactly it is you do as a company that can create added value? What is our core competence and what do we need to outsource?
Core competency is an organization’s defining strength, providing the foundation from which the business will grow, seize upon new opportunities and deliver value to customers.
When Steve Jobs began working at Apple, the company had more than 300 products in its portfolio. He reduced this to a handful of successful products. Don’t be afraid to streamline operations to those where you, as a company, can add value and focus on the activities where you can make a difference. Be bold enough to outsource to partners with more expertise.
- Opt for sustainability
As a Swedish company, sustainability is in our DNA, and that translates into everything we do. We are convinced that each company has its part to contribute to a sustainable future. Put your business assets under a magnifying glass and determine where this is possible. Realize that sustainable business does not have to mean expensive costs for a company.
If we take the sharing economy as an example, we see that sustainability is often a deciding aspect. That is also the case with the on-demand economy, where companies deliver a service or product on a specific location and timing for a customer. It offers a temporary solution without needing to invest by purchasing. This is the case with the new Antwerp-based “free-floating shared car platform” Poppy: 350 shared cars (Electrical & CNG) in Antwerp. This initiative, a collaboration between a group of young entrepreneurs and car distributor D’Ieteren, ensures that users always have a modern, green car at their disposal without having to pay the purchase costs themselves. Pay per minute, no parking fees, no insurance costs, no monthly fees, and no fuel costs. Only when you need a car.
We also see an increasing demand for sustainable, temporary solutions in the B2B area. Our clients want a total solution and only rent a machine when they actually need it and they know they always have the most recent and sustainable machine on the market. The average age of our machines is 3 year. That is something our clients consciously choose for. Michel Petitjean, Secretary General of the European Rental Association, confirms the trend: “Businesses across Europe increasingly acknowledge the advantages that rental can bring to their company — from providing a more efficient use of capital, access to a wider range of equipment, expert maintenance and service to compliance with regulations, and improved sustainability performance.
In short: Don’t be too proud to question yourself and your business plan
Play the devil’s advocate: question your business plan and adjust your strategy wherever and whenever needed. Are there things that we have to change? Are there activities in which we invest more time and money than we recoup? Is our way of working still effective and relevant? Can I improve my competitive position and still contribute to a sustainable future for my business and my employees? We believe that 2018 will be a year with many opportunities brought about by change. So don’t miss out!