Companies will have to adapt

Companies will have to adapt
By: CJ Crighton

One of the main reasons for business failure is when they become stagnant and fail to adapt to the modern world in a fair and free open environment.

In the 20th century you can look at the matchstick industry that was artificially help alive by governments keeping local production and jobs alive, the UK for example did not reduce the tax on cheap imported lighters (unit cost approx UK 0.05 for small retailers, figures quoted from wholesaler in Cheatham Hill Manchester UK contacted in Jan 2006, box of 50 lighters in display case 2.50).

Matches are now 0.15 a box retail, (Matches cost the retailer 0.05 per box), and Lighters are retailed at approx 0.60 in most small independent retailers. The margins for the lighters are over 50p per unit and the matches a mere 10p or less.

The result was closure of the few remaining factories in the UK, and in mainland Europe the closing of factories with massive job cuts leaving many comunuties based on this type of industry to fall into economic decline, the very thing the governments were trying to prevent.

Adapting to the Free Market should be achieved as quickly as possible, and government intervention with price fixing should be withdrawn, for companies that can not compete should not be in the market place for when the time comes to stop taxpayer intervention or duty tariffs are stopped by the IMF whole sectors could collapse resulting in instability in the home nation and the need for tax raises to accommodate the massive state benefits required.

Trade barriers are harmful to people, in Africa cheap surplus American and European food stocks are dumped onto the market. The result is local farmers closing shop, when the supplies dry out the people starve, a direct result of local farmers in Africa who can not compete with good produced on the other side of the planet. Shipped at vast expense to the tax payer and the environment trade barriers are destroying, killing people and their environments across the world. Why should a farmer in an African village be forced out of business by some farmer claiming vast amounts of tax payers money thousands of miles away?

Companies will have to adapt before the change or die.
Diversify, seek consultant advice, do what you have to do, but relying on the old ways will make you vulnerable to swift policy changes and you could find yourself out of business very quickly..

Learn to use new suppliers, don't be afraid of the world market, don't rely on old links and pals in the industry to bail you out as they will be trying to bail themselves out come the moment of change.

Source products and ideas from other nations, a good example is the UK small industrial laser market, companies here are charging 20k + for a small 60w laser machine, whilst a similar product can be purchased from china for only 3k. The saving of 17k could help you diversify or employ new staff.