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Competition During a Recession

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The media was making quite a big deal that the economy only shrank 1% last quarter, compared to the 6% it shrank previous to that. Does it mean we are on the way to recovery? Or won’t we break the 0% mark and stay negative a while longer? Should the economy expect to grow to be healthy? There is something to be said that we live on a planet limited in size and resources. Common sense would say that we can’t grow forever without causing some sort of ecological cataclysm. Should we be looking to adjust our expectations for a steady-state economy. Europe has had that more or less for a while and remained fairly healthy and vital. Does the rest of the world need to realize that there aren’t too many un-exploited frontiers anymore?

Chances are we will come out of this recession and experience some sort of modest growth. But with dwindling natual resources like gas, we have to plan to live within our means. Meanwhile what does that mean for companies competing in this environment. Within our own area we’ve seen some partners go out of business while others are doing quite well. Some depends on geography, some on skill and some on luck. We’ve seen competitors become more cut-throat. Competition for deals and customers has been heating up. The language used becomes stronger, the sell harder, more perks and subsidies thrown in.

One thing this has shown to me is the power of community. Often smaller companies compete with each other but have a lot in common like selling the same products. They have attended the same conferences over the years, participate in the same discussion forums, attend the same courses. Its seems products that have developed a strong community around them are surviving better than products that haven’t developed this. For instance Accpac has been around for over 30 years in one form or another, from the original CPM version through the DOS version, through 16 bit Windows, 32 bit Windows and now the Web. Much of the strength that has contributed to Accpac’s success has been the strength of the community that has sold, supported, developed for and consulted on this product line. Although many of these partners will compete head to head on deals, often at the end of the day, they can happily go for a beer together and be best of friends. I think this is in recognition that other business people within their community are more friends than enemies and that a bit of joint effort is required against all the other competitive pressures that are out there.

Now with tools like Twitter, Facebook, LinkedIn and dozens of specialized web sites, discussion forums, blogs, etc. the community has a chance to be stronger than ever. It is much more international now. Partners in South Africa can give advice to partners in Australia or Nova Scotia. The flow of information becomes better, the sharing of ideas and the comfort and support from that whole community. Of course vendors like Sage have to play their part to make it all work, but most of this community sprung up from the grass roots on its own and is very independent in its own right.

Written by smist08

August 1, 2009 at 10:27 pm

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