The Nigerian economy experienced steady growth in the immediate past with the nominal gross domestic products (GDP) at 510 billion dollars in 2018. The economy at this level is large to attract potential investors. Though the largest in Africa, small medium enterprises have not kept pace with the rate of growth of the overall economy contributing a meager average of 4% of the GDP, 2000-2018. There are various sellers of product with varying degrees of contribution to the overall market size. These sellers (marketers) engage in fierce competition on a daily basis to capture and control part of the market. As a result of the vagaries of the economy and fierce competition some dealers could not cope and subsequently closed down and many are still fledging. There are many strategies for generating wealth through sales and profitability in an economy. The desire to make wealth or expropriate it is one of the source of competition and often conflict world over. However in recent times the ability of the entrepreneur to create wealth where no wealth existed is the key to success. Thus it is important to examine the ways a business could be done for growth sustainability and survival which would be discussed below.

In order to attain business success and competitiveness overtime both in adverse circumstances and boom periods, the first step is to establish the mission, goals and objectives and then put them together with a strategy that can work so as to achieve them.

Formulating Strategy

In designing strategy, a critical issue to be considered is the business itself. In this case we consider online businesses. Then what resources do we have to deploy to put our strategy in place. How do we intend to allocate resources?

It is important to examine the business and have an overview of operators in the system. The following are the issues to be considered while formulating strategies:

• Resource optimization: first you have to know how your business measure up against the competition. How well placed are you in delivering your products? How is your position likely to change over the next five years?
• Identify and weigh customer purchasing criteria.
• Identify and weigh key success factors.
• Access your competitiveness.

Some relevant principles to be considered in dealing with strategies for survival are summarized below:

• Commitment to a definite objective.
• Seizing and maintaining initiative.
• Element of surprise: when the competitor does not know your plan, he cannot prepare to counter your strategy.
• Timing and sequencing.
• Exploit known success.

 

Impact of the Environment on SMEs

A business minded individual should think of dominating the environment. All businesses have direct interactions with the environment thus we need to design strategies that will enable us optimize resources and attain set goals. One of the factors that affect organizations is the Macro-environment.

Macro-environment includes the political, economic, social, and technological factors of a business. These factors can’t be controlled by firms directly. Yet each factor affects any and every business, no matter their industry but the ability of a firm to survive in this environment depends solely on the strategies implemented in the organization. By examining how outside influences, uncontrollable by the average person, are connected to a business, it’ll reflect how to keep ahead of the competition and reduce risks as they arrive. These factors are briefly explained below:

• Political factors are related to the government. They consist of legislative bills, tax policies, health and safety laws, and government stability. SMEs or even larger organizations in various industries can’t lower taxes or introduce new legislation that’ll affect the entire economy. They must instead understand these factors on a grand level and ensure they implement strategies that aligns to laws, regulations, and policies.
• Economic factors are related to inflation, taxes, unemployment and recession. While people in business can track trends and implement planning, many businesses are not recession proof, which is why businesses should always plan ahead and have strategies in place to enable them strive in a struggling economy.
• Social factors consist of the consumers. They buy products based on many different factors. This includes their demographic location, ethnic background, social status, immediate needs, lifestyle changes and trends. Understanding consumers’ behavior and implementing strategies based on the analyzed behavior of consumers can help SMEs thrive in their environment.
• Technological factors are often referred to as advancements in technology. Not only technology used to develop and deliver products to consumers. But also the technology used to run businesses efficiently. The company who is fastest, with the best agile technology, can easily out beat the competition in any market. Keeping an eye out on which technology is used in the industry can mean life or death for the firm.

Competitors are also one of the factors that affect organizations. We are operating in a condition of constant competitive change with contracting market and frequent bold and aggressive moves. Part of strategic business management is to create a future of successes and pit-falls because the business environment is dynamic and highly competitive. In a competitive business arena, the customer has to look at the factors that influence his performance and therefore make his choices.

Factors that determine success amidst fierce competition

• Knowledge of the competitor.
• Social factors.
• Technology.
• Environment

 

Having done the above study, you can take on the competitor in the following areas:

• Carve out a segment that is neglected by the competitor and capture it.
• Make an aggressive short term marketing of the existing products to capture a large size of the market.
• Make a head on attack by selling identical product using good marketing mix.
• By pass the existing product and develop unrelated product that solves the same problem.

Conclusion:

To achieve all these we have to keep abreast of the marketing mix applicable in our situation: product, price, place, promotion, people, process and physical evidence.

Thanks for reading my piece. Feel free to engage me by sharing your thoughts on this topic by using the comment section below.