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Consumer confidence remains high, but there are signs that households are being affected by the high oil prices, increasing levels of national debt and lower expectations of access to better paying jobs, higher education and adequate health and hospital services.
At the same time, Australian small business is being challenged to create a critical path for growth, take on more employees and convert recent tax cuts into a platform for growth. To stay ahead, business must identify what business it is really in, and its real customers.
Research by Constantinos Markides, chairman of the strategy department at the London Business School, says the way in which a start-up enterprise defines its business and relationship to its target market determines its success or failure.
Markides says: “What business a company believes it is in determines who it sees as its customers, competitors, competitive advantage and so on. It also determines what the company thinks are the success factors in the market and thus ultimately determines how it plays the game.”
In the past few years, the good economic conditions have encouraged a more of the same mental model of the business market, where a fast follower, franchisee and niche-market player could increase their personal disposable income by combinations of clever tax plays and games with negative gearing and prepaid costs of doing business.
This is changing. There are more umpires and line callers in place to encourage a culture of compliance and increased managerial accountability. Any existing market will be subjected to increasingly sensitive price points, competitive outsourcing of coure costs and more flexible, adaptive and responsive capability to capture a share of known market requirements.
Under these conditions, the key to success lies in picking emerging market segments ahead of the competitors. It is essential to find a series of small to medium-size business enterprises willing to work together to create new business opportunities based on shared planning and collaborative tendering for larger contracts. Each company in the business team must work out “What business am I really in?” and “Where am I in it?” so each team member knows what is in it for them. That way they put extra effort into these more valued and challenging emerging opportunities, especially for export development.
Big business has the luxury of a range of competencies and broad access to experience to convince its customers that it can take on challenging assignments. Small business must work harder, as times get tougher, to win valuable work.
Once a company is clear about what it offers, it can then focus on new customers looking to spend their windfall gains from the recent tax cuts that are increasing household disposable income.

 CONTACT: Dr Jane Shelton Chairman, Marshall Place Associates

Marshall Place Associates offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
CONTACT
Dr Jane Shelton
Chief Executive Officer,
Marshall Place Associates
Level 15, 461 Bourke Street
Melbourne 3000
Ph: +61 3 96400099
Fx: +61 3 96400009
Email: contact@marshallplace.com.au