Jan
19
Written by:
SuperUser
1/19/2012 11:45 AM
By Dar Schwanbeck, Managing Director, NABI
If you’re not worried, maybe you just don’t understand the situation. As we begin 2012, many economic challenges are emerging and we’re not immune.
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The Federal Government must get its spending in order and changes to federal programs are likely to mean more people looking for work, perhaps as first time entrepreneurs.
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The U.S. election, combined with their recent economic struggles, mean slower decision making and potential belt tightening for Canada’s largest trading partner.
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Ongoing financial uncertainty in Europe will almost certainly have negative market impacts for Canada.
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Further growth of China and its march toward global domination as the largest economy suggest new value sets and ways of doing business.
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An Alberta Spring election, new leadership and changes among the senior bureaucracy all point to slower decision making and spending reductions at the Provincial level.
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Governments at all levels are focusing on “technological innovation” as one of the saviors for diversifying and rescuing our economies. Yet innovation is an interesting character - on one hand it helps keep us competitive by increasing productivity - on the other, it often leads to job loss. This trend has led/ leads to unemployment, but also, a renaissance in entrepreneurship. The dilemma is that most aspiring entrepreneurs are poorly prepared as business people.
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Leaders of countries’ and cities are doing many things wrong - they’re undercutting entrepreneurs instead of cultivating them; we see companies with depressed workforces; we’re turning the country into a nanny state with rules, permits, and processes that choke creativity and development.
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According to Jim Clifton, the Chairman of the Gallup organization, the world is short about 1.8 billion good jobs. And without these jobs we will see rising unemployment, more crime and growing unrest. Clifton proposes that entrepreneurship is the way out of the mess.
So, the bad news is that we could be in for a lot of economic disruption. The good news is that small business and entrepreneurism can be the stepping stones through the morass. Small businesses create the vast majority of all new jobs.
So what should we do at the local level, right here in St. Albert? Well, entrepreneurs need to get smarter in how they do business, and for those who create the playing field, we can sharpen our strategy to attract and retain more entrepreneurs. Below are three ideas we that we all (i.e. businesses, organizations, non-profits, and levels of government) can apply.
First, we need to be very clear about what market space we want to compete in. Markets are made up of categories of solutions; each category has its own competitors, rules of engagement, market growth rates and business practices. By identifying the market space and category in which we fit, investors and customers can more easily see the opportunity or problem you are offering to solve. For the City of St. Albert, for example, the challenge is to figure out why and how the new brand (i.e. “City known for Botanical Arts”) speaks to potential investors and residents who might want to grow or relocate here.
Second, we need to decide which markets and segments we should go after. And who are our target customers are going to be. To use the fishing metaphor, we need to address two important questions:
- What types of customers are in the water, and
- What bait should we use to lure specific customers to our line?
At NABI, for example, we’ve decided that small businesses who want to accelerate their growth (with reduced risk) are our target customers. We don’t pursue any specific industry types of customers because history shows fast growth business can occur in any sector.
A third thing we need to do is decide our competitive edge. What is it that might give St. Albert a sustainable competitive edge? To be sustainable, a competitive position must meet three conditions. It must be distinct from the competition, it must be meaningful to the target customer, and it must be visible within our solution. The formula for this is: Key benefit + key differentiator = competitive edge.
The key benefit represents the table stakes in the equation; it’s what the customer expects all products in the category to offer. You don’t necessarily win the customer with a key benefit alone – that’s where the key differentiator comes into play. It’s what makes you distinctive over all other competitors. It’s not the feature that you like best, rather what your customer really sees as distinct in what you’ve created. It needs to be based on what customers’ value and whether your idea can deliver it.
These ideas are critical spadework for us all, and supporting an entrepreneurial culture and job growth in our community might just be one fix we need for uncertain times.
Click here to see this blog post featured in the St.Albert Leader