Here Comes the Old Economy!
Headlines continue to be dominated by negative news — why are economists optimistic about the continued recovery?
Consumers lack confidence in the stock market as more and more financial and accounting scandals are unveiled: Enron, Qwest, WorldCom. Financial shell games to bolster growth, hide debt, increase stock prices or reduce the tax burden stimulated the creative juices of many corporate executives while the corporate board members slept (or looked the other way). With corporate credibility at a low point, will the economy continue to recover? Of course, scandal is not new to the US or to capitalism — remember the names Michael Milken and Ivan Boesky? How about the Savings and Loan debacle? The only question is when the next boom cycle evolves (in about 15 years) what new twists will the corporate mavens develop?
The company will continue to benefit from the lower dollar and the upturn in the Asian economies.
In addition to the Asian economic upturn, Europe, Mexico and Canada are showing signs of growth. The amplitude of the boom and bust cycle was not as pronounced in these economies as it was in the US. Hence international consumers are not dealing with same wealth effect decline as US consumers.
In the US, real estate is seen as an alternative investment to the stock market and consumers continue to buy. This stimulates many industries including building materials, carpet, furniture, fixture, white goods (washing machines) and brown goods (video/stereo).
Is all well in Camelot?
The technology sector continues to lag as it licks its wound from the bust cycle. Industries labeled, as "Old Economy" will continue to benefit from the application of technologies developed during the boom cycle.
RFID — radio frequency identity - identifies the consumers and is able to automatically debit the consumer's account for a specific transaction.
The application is currently used to automatically identify a car driving through a tollbooth and debit the car owner's account for the toll: E-ZPass. For drivers who do not drive on roads with tollbooths this is a yawn. But wait — Mobil (now Exxon/Mobil) is using this technology in its Speedpass program. This program allows Speedpass customers to simply wave their "Speedpass" by an electronic reader and it debits the customer's account for gas or any other convenience item purchased.
"An average Speedpass transaction is more than double
the cash amount."
What's next? Speedpass at McDonalds — now we will be able to get fatter faster!
Spreading the use of RFID technology to new applications shows how technology developed for use in one industry is used to speed transactions in different industries.
The challenge for a company's strategic planning team is to search for technology applications in other industries and look for ways that technology can be applied to the business (e.g., McDonalds using Speedpass.) Looking for shifts in productivity, customer service and product/service enhancements can be a key factor in developing a "first mover" advantage for your company.
These are some questions that will stimulate thinking as you update your strategy in your quarterly strategy monitoring meeting.
Denise Harrison is a consultant for Center for Simplified Strategic Planning, Inc., a consulting firm with a strict focus on strategic planning services for the small to mid-sized company. She can be reached via e-mail at firstname.lastname@example.org . For more information, call 203-255-2080 or visit www.cssp.com .
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