First published in Fairfax Unlimited on 29 January 2014
Australia has yet to arrive at a clear solution on our fluctuating dollar, but it has encouraged important conversations. One is the need to redeploy labour from dying industries into new areas of growth. Another is how to encourage students into a vocational education with skills that Australia will need in years to come. And then there is the critical need to develop expertise in niche areas that cannot easily be replicated in other markets, beyond mining.
I’m far from being a financial analyst, but I do understand brand and marketing. I see part of the challenge for companies (and one you have more control over than the exchange rate) is also a question of brand. When there is little to differentiate your business from another apart from what you charge, you’re on a cliff edge, standing on one leg.
Many Australian companies, many manufacturers, are shutting down and part of it is to do with having no real point of difference. Or at least not communicating that difference to customers, which is the same as not having one.
At its most simple my job description is I distil a company’s rich and varied business capabilities into one or two sentences. Often this is only a few key words, and it’s always done by talking to their customers. At almost no time do I advise that ‘low price’ be one of those principal points, unless you’re Walmart or Costco.
It might be overly simplistic, but hanging an economic point of difference on price is a very dangerous position. It’s one that many Australian and New Zealand companies will now find themselves in.
Lets face it, in all our fields there’s always someone cheaper who says they do the same thing. Unfortunately, many businesses cannot clearly articulate to themselves, let alone to the market, why they are better than the competition.
For years now, that competition has just as likely been a factory in China as it is someone down the road. There’s much to learn from what’s happening in more developed economies like the US and UK. Whatever our challenges in Australia and New Zealand, those big economies have faced them on and off for many years.
Interestingly, I’m starting to see more stories coming from both the UK and US that indicate positive changes, signs that manufacturing is returning to their shores.
I’m also seeing more stories about China’s evolution that includes a demand for better wages and conditions.
Times are changing. As they always are.
What does your business do that makes it worth paying more for? What is your unique positioning that will help you withstand fluctuations in the dollar? If you’re not sure, you need to find out.