Charting growth through choppy waters
Some industries are especially challenging because they are cyclical or have been disrupted by technology. There are several strategies when it comes to overcoming these obstacles.
Transworld was excellent at creating a niche for itself. It decided early on to go where the bulks do not play. It created a network and an entire ecosystem where one did not exist before, making itself invaluable and thus able to weather dips in the cycle.
Other companies manage to co-create with the customer. For example, some in the textile industry, a traditionally low-margin business, have moved up the value chain by working with customers to create new materials and blends. They invest in the capabilities and technologies required and end up driving innovation, becoming key players in that ecosystem.
Heavy industry and industries with large capital expenditure, such as construction and logistics, could benefit from an asset-light strategy. Enterprises with fewer assets are likely to have less debt and are then better able to weather cyclical downturns.
Companies in challenging sectors would also do well to consider how embracing digitalisation adds value to their businesses. An example would be companies in the timber industry. Many have found it helpful to implement RFID capabilities, allowing seamless and real-time traceability of the product for sustainability considerations.