The ever-evolving business landscape in the face of global conflict presents both challenges and opportunities for local small and medium-sized enterprises (SMBs). Being far-removed from the Middle-East or Ukraine does not shield Kenya’s economic climate from the bombs going off in Gaza and Kyiv. Navigating dynamic market trends is not only a survival tactic but a strategic imperative for SMBs aiming to thrive in today's local arduous environment that is compounded by government debt and weak foreign investment. This strategic guide aims to illuminate the path for SMBs, shedding light on the intricacies of market trends and providing actionable insights to steer through these often turbulent waters.
1: Understanding Market Trends
In the dynamic realm of business, market trends act as the compass guiding the strategic decisions of SMBs. Grasping the fundamental concept of market trends and their impact on the business landscape is crucial. Market trends represent the general direction in which a market is moving, encompassing factors like consumer behavior, technological advancements, economic shifts, and industry-specific developments. Recently for example, the “Buy kenya, Build Kenya” proposition has gained steam because of the devaluing shilling. Consumers are turning to Kenyan-made products because similar imported products have become prohibitive. This reality should become a boon for local manufacturing and give SMBs a chance to adapt, improve and endure.
2: The Role of Market Analysis Tools
Many SMBs don’t have the financial muscle to initiate comprehensive market research. What to do? There are free online tools that a SMB operator can use to gauge customer sentiment like Google Surveys, Google Trends and The Kenya Bureau of Standards has market data amongst others. Whatever route you take, it is imperative that you get feedback from current and/or prospective customers regarding products and by extension, business strategy.
Data analytics, social media competitor monitoring, customer feedback and surveys, competitive analysis, and industry reports are tools that offer SMBs unprecedented access to real-time information, enabling informed decision-making and identifying industry-specific trends.
3: Adapting to Consumer Behavior Changes
What did the traditional taxi operator do in 2015 when Uber entered the Kenyan market? He resisted. He pooh-poohed the idea. He believed that his business model would easily survive. What about cash? Last year. De La Rue, the money printed firm, suspended its operations due to low demand. Majority of Kenyans carry money in their phones on mPesa. Traditional TV viewing is decreasing with a shift to Digital Entertainment. COVID made remote working tenable leading to the decrease in office renting. There are many other examples. The fact is that SMBs need to strategically adapt to evolving market dynamics. Agile decision-making, innovation, customer-centric strategies, and strategic partnerships are key to respond to market trends and immediate adaptations.
4: Operational Efficiency
Embracing technology emerges as a pivotal strategy, offering a pathway towards streamlined processes and heightened operational efficiency. For bookkeeping for example, Zoho Books offers a free alternative to Quickbooks for businesses that have less than one thousand invoices in a year amongst other things. By leveraging technological solutions, such as the automation of repetitive tasks and the adoption of digital tools, businesses can effectively curtail costs and significantly enhance overall productivity.
Simultaneously, it becomes essential for SMBs to conduct a comprehensive evaluation and restructuring of their operations. This involves a meticulous assessment of the existing business structure and operational frameworks. Delving into the core of day-to-day activities, SMBs must consider the reorganization of workflows, the cross-training of employees, and the strategic outsourcing of non-core functions. This deliberate restructuring aims not only to adapt to the current economic landscape but also to achieve substantial cost savings.
5: Marketing
Usually, the first casualty during lean times is marketing. This is because many businesses see marketing as a cost not as an investment. However, a large number of businesses that recovered after the COVID shutdowns were companies that used the pandemic period to consistently present themselves to their current and prospective customers. How did they achieve this?
By focusing more on brand building as opposed to performance "buy now" marketing.
Brand building is basically the strategic activity a company undertakes to enhance likability, improve the perception and reinforce recognition among its target audience. This involves creating and maintaining a positive and distinctive brand image.
To that end, a significant strength of robust brand building during the lockdowns was the ability to adapt swiftly to the changing circumstances. Agile responses and innovative approaches allowed brands to pivot their products or services, demonstrating resilience and positioning themselves as dynamic and responsive entities in the face of challenges - Uber to UberEats for example.
Engagement with local communities became a notable facet of brand building. Many businesses actively participated in community initiatives and supported local causes, enhancing their image as socially responsible and caring. Coupled with internally prioritizing employee well-being, boosting employee morale and advocacy made employees more loyal and consequently eager to build companies’ reputation externally. Brands that effectively communicated their unique value propositions and differentiated themselves from competitors stood out. This differentiation allowed them to maintain relevance and appeal in a crowded and challenging market.
2024 is similar to the 2020-2022, where many of us were scared about the future. Within that construct, consumers do not spend. We save until our consumer confidence increases because of either the economy opening up after the lockdowns or currently, inflation reducing and/or local investment increasing. Who do we buy from when things become easier? We buy from brands we like and remember, i.e, we buy from companies that have built their brand equity.
I recently had a chat with a friend who is in senior management at a regional bank. He told me all indicators are pointing towards 2024 being a difficult year for small and medium-sized businesses. In that light, SMBs need to grasp the importance of sustained agility. Navigating market trends is not a linear process but an ongoing journey that has many pitfalls and only resilience and tenacity will help SMBs pull through. The era of cheap and accessible money is over. In that light, SMBs need to internalize the concept of continuous assessment, adaptation, and iteration, positioning themselves not only to survive but to thrive in these formidable times.
For all my fellow SMB proprietors, hang in there.
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