The National Bureau of Statistics in its trade statistics for the third quarter of this year stated that the country recorded N359.6bn or 5.4 per cent drop in merchandise trade from N6.65tn to N6.29tn.
The decline was attributed to a fall in the value of exports and imports in the third quarter relative to the second quarter of this year.
Similarly, the Nigerian Stock Exchange recorded 35 per cent decline in foreign investments to N153.28bn in October from N226.68bn in September.
Experts say the reduced foreign investment is as a result of the unstable business environment due to insurgency and the fears of 2015 elections.
In view of these, experts advise that business managers have to make investments decisions in line with the changing business landscape for them to record success.
According to them, the old business models that guide investment decisions may not be effective as it used to but proper understanding of the business terrain and the risks involved may help out.
A report by Accenture states that firms face a number of challenges that complicate their efforts to choose the right ways to invest capital or operating funds.
The report titled,’ Invest to Win: Placing the right bets in a shifting competitive environment,’ said traditional approaches no longer meet stakeholder expectations; blurring industry lines and make the playing field less transparent than before.
It states that the current unprecedented changes taking place across industries have compromised many traditional investment approaches that worked adequately in the past adding that most companies cannot repeat historical investment patterns and expect to receive the same returns because their industries no longer grow at their former pace.
More so, organisations grow today by expanding into existing markets or creating new markets or product segments that meet customer needs, it adds.
The report advises business leaders to challenge themselves by identifying what customers really value and are willing to buy, and seek out new ways to exploit their current assets.
In the main, it says that companies aspiring to grow start by identifying how to deploy their assets in the following areas:
Opportunities in technology
The Accenture report states that advanced technology which involves the use of advanced mobile devices, digital software and sensors to monitor and maintain patient health on a 24/7 basis is a growth opportunity.
Moreover, it says the emergence of location-based apps that are transforming everything from hailing a cab to the convenient shopping experience online provides other opportunities.
New customer-centred initiatives
Customer-centred approaches make companies to offer one-stop shopping for current customers that goes beyond their traditional offerings. It adds that the goal is to understand what else consumers might want to purchase, and use the insights to sell more offerings or provide a service that enables it to increase its share of wallet.
Extending brands and generating customer bonding
The report says these can work, if the company’s assets and brands provide a plausible rationale, adding that leaders need to determine how they can improve the customer experience and what product add-ons to offer.
Areas of concern could include the expectations of new and innovative products that offer good value, as well as a positive, expedient customer experience with purchased products and subsequent service.
As a result of increased consumer expectations, the report explains that people also want companies to engage them digitally before and after a purchase, by having an online presence.
It says, “This implies that simply expanding a company’s brick-and mortar footprint will not generate the same levels of retail growth that it once did. Many customers also expect firms to exhibit good corporate citizenship and have effective sustainability strategies.”
Disruptive new entrants make an impact
Evolving customer demands keep raising the bar on expected company performance and the arrival of disruptive new entrants is changing competitive dynamics.
In the process, they are challenging incumbent business models and investment choices and in many cases, roiling established markets.
Citing the example of businesses with strong online presence, it says Uber, which digitally connects drivers that have cars for hire with people looking for transport, Gilt Groupe, an online fashion retailer, and Pinkberry, a restaurant franchisee in upscale frozen desserts have carved a niche for themselves.
It notes that in their early stages, each of these upstarts could have been a low-priced opportunity for existing players to develop a new market but they now represent competitive threats.
Companies need a clear rationale for any investment, which means that before deciding where to invest, they need to clarify why they are spending the money, what they expect in return, and over what time frame.
Choosing where to invest
To make wise investment decisions, the report suggests that companies can develop new products, services and solutions, investing to develop innovative offerings that consumers seek.
According to it, they can invest to maintain or expand an already introduced product’s position in the market, or focus on sales and specific channels, spending to improve their go-to-market capabilities.
It says, ”Strengthening marketing performance and brand image can be a way to go. Boosting the company’s pricing capabilities also makes sense. Actions here could include investing in capabilities to improve the organisation’s understanding of target customers, revising the positioning and promotion of offerings, and optimising the company’s returns for its offerings.”
Another option it suggests is simplifying and optimising the company’s internal capabilities in areas such as manufacturing, supply chain management or at the corporate centre by introducing new processes and technologies.
Source: Punch Newspaper
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