Is Now the Time To Rethink Your Strategy?

For many businesses the last six months has been about survival in the face of the Covid-19 pandemic. It’s been an intense focus on cash, cutting cost and finding new revenue streams, often with a rapid transition of existing products and services into digital media and channels. For other companies, the dynamics created by Covid-19 have had a more positive impact and the key issues have been about how to satisfy demand, largely within a short time period. Overall, there has been little certainty and no real visibility beyond the time horizon of weeks.

The question now is whether it is the right time to rethink strategy with a longer-term horizon in mind? Is there enough clarity emerging to make assessments on where to play and how to win in the “new normal” and make strategic decisions based on those assessments?

No doubt, there is still significant uncertainty arising from the Covid-19 situation. Yet we also know so much more now than six months ago.

We have better knowledge of how to contain the disease, better interventions to help those that do contract it and there is cautious optimism of a reasonably effective vaccine being available sometime towards the middle of next year.

Economically, we know that immediate direct government financial support will taper down and it is likely there will measures to stimulate growth coupled with targeted tax rises and spending cuts in 2021. Interest rates are likely to remain at near zero for some time to come. Projections of GDP recovery vary, but a return to pre-Covid level by the end of 2021 seems like a reasonable consensus view, although there will be inevitable differences between sectors. Finally, the UKs future trading relationship with the EU will surely be clear within weeks.

Potential permanent shifts in social behaviour are beginning to show themselves. The step change in online shopping, more flexible working patterns and the increasing and faster adoption of technology solutions are here to stay to a greater or lesser extent. Organisations like Kantar in the FMCG world are also developing real insight into consumer behaviour in different sectors.

So while overall there is significant uncertainty, particularly in sectors like entertainment and hospitality, there is some clarity emerging. By Q3 2021, we can project the virus will finally be under control and the “new normal” will be here. And we can develop scenarios of what this new normal will look like, at least directionally. '

So now is a good time to think more strategically and more longer term. For those businesses where all the focus has had to be on the short term over the last six months, now is a good time to step back, look forward and look at longer term strategic impacts, options and plans.

As a final thought, for those with the resources, the ambition and the appetite, now might also be a perfect time for acquisitions . . .