We are living in changing times, with concerns about the global supply chain, pandemic, war and climate change. But, is there an opportunity to take advantage of the resulting transitioning markets? And what role do we play as marketers? Jeff Clark explains.
We are in economic transition. The pandemic, war in Ukraine, de-globalization, food shortages, supply chain disruptions – ARGH! These events have kicked off a period of transition. To what end, we don’t yet know.
We do know that climate change is causing disruption across many markets, from drought reducing food production to extreme weather events causing an increase in insurance rates and wildfires and sea-level rise threatening communities. And it is only going to get worse.
To forestall greater damage to our livelihood, governments and private businesses are making pledges to go carbon-neutral (or net zero) within decades. Plus, investment houses, like Blackrock and the Norwegian Sovereign Wealth Fund, are evaluating their assets for sustainability.
Think about what must happen to make good on these pledges. Even modest progress will upend many markets. The car market is already shifting toward Electric Vehicles (EVs), gas stations and retail businesses are offering charging stations, carbon-intensive production processes are being transformed more energy efficient, and businesses are purchasing power directly from wind and solar farms. In the near future, public investment will shift toward climate mitigation and adaptation.
How does your business survive or thrive in this transition? Will it be threatened by increasing costs or more sustainable alternatives? Is there opportunity for it to take advantage of transitioning market with new products and services?
Marketing Leaders Can Chart the Right Path
Once a business is established, strategy is typically developed with a 3-year time horizon. Is that enough during a market transition? Five to ten years out, your market may look radically different. Marketing leaders, whether it’s the CMO, product marketing lead or analyst, can help inform business leadership about how the company can weather or capitalize on marketing shifts.
Here are some of the dimensions to consider:
- CUSTOMER NEEDS. Will customer needs change, particularly when there are public incentives to purchase different products, e.g., EV cars?
- LOCAL ENVIRONMENT. Will your customers and your place of business have constraints that impact the business? For example, many locations in coastal communities will be underwater.
- BUSINESS MODEL. Will the shift in product choice or increase in costs make your current business model obsolete? For example, traditional car dealers make profits on maintenance that EVs don’t require.
- SUPPLY CHAIN. What is the health of your supply chain? For example, food processors are worried about source of ingredients.
- FINANCIAL ENVIRONMENT. Will you be able to raise capital and/or cover increased costs in your market? For example, investment houses are adding ESG (Environmental, Social and Governance) qualifications to how they evaluate investments.
- STAFF SKILLS. Will new talent be interested in working in your business or are they all off to more exciting cleantech companies? For example, traditional heating and cooling companies are having issues getting qualified people to learn how to install and maintain new heat pump technologies.
- REGULATORY FRAMEWORK. Will your local or national government implement regulations or incentives to change buying behavior? For example, many states in the US have incentives for replacing oil and gas heating systems with heat pumps.
- COMPETITION. New players working under a different business model will quickly still market share. For example, Tesla and Chinese automakers Li Auto, NIO, and XPeng are quickly ramping up EV production.
Do your research on these dimensions, including both internal and external factors, to help construct several market scenarios. Talk to industry analysts to get their perspectives.
Conduct a SWAT Analysis
What can you do with this information? The dimensions above can inform a SWOT analysis (Strengths, Weakness, Opportunities, Threats) to help evaluate your competitive position and develop your business’s mid- and long-term strategic plan. This is a tried-and-true exercise that can help the business identify the Threats and Opportunities, as well as determine how your Strengths and Weaknesses measure up.
A SWOT analysis can facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization, initiatives, or entire industry. The organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-life contexts. It’s a great tool to help guide the business on a path to success in times of transition.
Marketing can play a key role in both informing the analysis by conducting the research noted above, and moderating the discussion with business leadership. Marketing needs to help the organization take the long view, and this is a time when the long view is required to maintain business viability.
For more discussion on this topic, check out the discussion on Investing the Green Economy on StreamAid Live.
Image courtesy of Wesley Eland on Unsplash
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