BNZ offers advice to small and medium-sized enterprises: How a local business can navigate global uncertainty.
Despite being geographically isolated, New Zealand companies are anything but in today’s global economy.
Everything from international financial market fluctuations to geopolitical shifts and regulatory changes can impact a business. But there are ways to navigate the uncertainty and even seize the opportunities that changes create.
“Many businesses underestimate the influence of global trends on their business, even if they think of themselves as reasonably local,” says Tim Wixon, Head of Technology Industries at BNZ.
Among the challenges are the consistent new competitors, substitutes and alternatives enabled by new technology and the relentless changes in options available to consumers.
Meanwhile, our exporters must respond to both evolving consumer expectations and regulations relating to the likes of sustainability, data protection and biosecurity – to name a few. It’s not always an easy time to do business.
Turning uncertainty into opportunity
“Any significant change creates opportunity to displace an incumbent operator in any market,” says Wixon.
This includes the opportunity to replicate successful offshore business models in New Zealand where there are gaps or trends that are changing, and the opportunity for local companies to start in or scale into offshore markets. “Working out what you’re really good at and where you go with that.”
There are many alternative markets where New Zealand businesses are succeeding or which present opportunities. Some markets such as China, Australia and North America are well known. Wixon points to South Korea, Japan, India and the wider Southeast Asia region as examples of markets that businesses could have on their radar.
For identified countries of opportunity, businesses should put these countries on their travel plans to develop relationships, understanding and see the markets up close, he says.
Protect your business from uncertainty
Do your research
“Businesses should do thorough research, which is inexpensive relative to trying to launch into the wrong market or into an unfavourable market at an unfavourable time,” says Wixon.
You’ll be able to identify your value proposition, your target customers and what’s important to them. Research can also give you valuable insight into the market you want to target, to understand if it suits your offerings and whether the timing makes sense.
Turn the mirror inwards too, to ensure your business has the capability, capacity and capital to put your business strategy into practice in those markets identified, and to understand what internal levers you’ve got to speed up or slow down.
Track your progress and adapt
“Make sure you’re able to track how things are going. If you’ve got a hypothesis for a market or a product or service, know how to test this to track your success or otherwise,” says Wixon.
You can assess and plan for the impact of more cyclical trends by looking back at previous business cycles, as well as plan for how longer term trends might impact your business.
“Have a limited set of key performance indicators that you can check on regularly so you can diagnose if things aren’t going as well as planned, then you can be agile and switch,” says Wixon.
“You can do this tracking via scenarios or by stage gating your project and having the right external advice or governance structure who can offer a relatively objective view of things.”
This content is sponsored by BNZ.
This article is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser. No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this article. Any opinions in this article are not necessarily shared by BNZ or anyone else.
