The Corporate Rider and Beyond

Between the Great Depression and the late 1950´s the stock market became a bit of a “no go zone” deemed to insecure and volatile, yet after the post-war bonanza and much prosperity investors began to seek higher returns in the stock market.

This is the setting of “The Mayfair Set” a British documentary in 4 parts covering from the rise of the first corporate riders in Britain back in the 1960’s, until de 80’s wall street junk bond market and 90’s British shifting politics, this series may seem to show how this events seem to be linked, but there is also a bigger
picture.

The documentary help me to expand my view over the 80’s boom, by  linking seemingly unrelated events, for example the drop on risk aversion to investment at the stock market, and how this was used to restructure full industries, as we know specialization was unheard among companies in the post war period (like
Japanese companies this days) as most of the large companies were vast industrial empires spread along several numerous industries employing large number of people mainly in manufacturing, this holdings were controlled by powerful people who allowed to direct the economy along cozy links with the government, this allowed to follow national development plans with the private sector this was true in a number of developed countries and several developing ones as the concentration of industries were much higher.

These industrial behemoths were able to reap a large amount of incomes right from the multiple products they offered and their distribution channels but were poorly managed and not quite efficient, by the late 70’s after the oil embargo this figures in the economic model began to suffer a lot this lack of efficiency
despite counting with a very successful business, the lagging ones became a drag to the financial results and restraining quality improvements, in the western world the rise of the Japanese companies didn´t helped too.

The paper of the corporate riders at their time was to inject new strength in to the industries by disposing the unprofitable areas of the companies; this allowed me to understand the real reasons of something I learned at my school classes when the companies became focused in few products or services, in this sense
the corporate rider allowed the companies to become more focused on a narrower set of good where their results and profits were better.

In the bigger picture these leaner, meaner companies boosted results, profits thus lifting price shares making attractive to invest on shares, deregulation played it´s part to make more attractive the selloff of  unprofitable assets further acquired from other firms seeking value from distressed assets, this kind of
transactions changed the industrial landscape, but also explain why the tight knit  stock ownership between companies actually protecting the firms from takeovers, this business model is more or less the rule across Asia, this kind of structure have been more suited to the economic “dirigisme” followed in Asia and being kept to sustain a domestic led industrialization.

At the end this documentary allowed me to link the dots and understand more broadly from the industrial-financial sense, and how the actual globalization phenomenon began to develop, also draws clearer path of where it´s going.

Location, Location, Location

When it comes about SME’s particularly those from trade, catering and services, location is the single and most important raison d´etre when you are about to set a startup or expanding an existing business



¿Why is this so critically important?


Well mostly because the market you aim to cater is located within a radius of mile or two so this will be called our local market, in which existing business coexist with new ones forming a “business fauna” thus, there lays the importance of actually know the area supply (name it competition), and measure an approximate figure for demand is very helpful, another key fact to examine is whether your product is about to get a good reception, it’s like aiming to sell polish food products in a mostly Afro-American district or vegetarian meals in a rural district where meat is seen as a staple, first at all is trying to offer goods and services that can be assimilated in the local markets, ensuring a constant flow of customers while pocketing a profit from the trade, always remembering a constant flow of customers means a good product acceptance and the decisions mention before where taken correctly

Location is critical before you set up a shop or a service provider, when it comes to CBD location while costs may increase, also the potential impact from the floating population, higher education, constant demand for food, beverages, entertainment and also as corporate support and services provide (ranging from small office supplies stores to accounting and consulting services), and can in fact turn in to profitable trades, but the same kind of business in a lightly populated commuter town at the outskirts of a large metropolitan area, would hardly raise profits at all.


¿How to define business strategies from such several factors?

Always information is the prime tool to attack a market, approach a customer or tailor made a product/customer service strategy to appeal shoppers and clients, if trying to settle to a somewhat large mall with certain traffic, you should be aware of the kind of shopper that flocks to the mall, if setting up in a suburb, at least knowing their habitants profile, income and education levels, if are you planning to setting up nestled between corporate titans in the CBD aiming to capture a slice of their budget or trying to fulfill their employees demand from food, dry cleaning and lattes, it all comes first to know your environment, and the people that flock around this environment.

The Globalizing SME

Right now as I type, probably there’s a bunch of small business chatting with similar companies facing similar problems across the pond, others are closing business online and picking up orders, and probably a smaller crowd is looking for partnerships to tap new markets abroad or gain experience from foreign firms.




Name it as you like it, but globalization has hit many sme’s in several ways, as a light google search to improve their ability to manage their staff, to building a global client network, carefully linked thru laptops and smartphones, while this synergies are being well exploited, several other sme’s are missing the chance.



Could be demographics, could be technophobia, or simply a taste for good old fashion in management, but internet and social networks also do their share when it comes to handle customers and picking up orders.



Handy & Useful



The recent communications advances could be exploited by those less eager to exploit the latest technologies, a few clicks and you may find foreign companies in distress on sale for a bargain, others looking for partnerships, and other as well aiming to raise capital to reboot their business, for sme’s now it´s easier track regional and foreign affairs, sales and orders, also business software manager is also more freely available and so sme’s can take advantage from it.



The bottom line is next: Going global while remaining a nimble and nifty sme, can trutly pay off, if your company already have export experience, partnerships and product development for several kind of customers, turning in to a mini multinational company should come next.