Business Dilemma: Stay the Course or Change Strategy?

For the CEO and President of a local company, the writing was on the wall.  Their largest client, the government, which accounted for most of their revenue over their years of operations, was making signs that they weren't going to renew their various contracts with this company.   The new economy equaled new government spending strategies - essentially a freeze on most contracts.  

This presented an urgent dilemma for the company.  Should they try to find similar customers for their existing services in other locations?  Or should they expand their products and services? Or both and with what resources? 

Their solution:  merge with an existing market leader with similar values who is established in another marketplace.  This narrowed their risk in several ways:  they expand into a new area of expertise without large investment in hiring the expertise, each company gains access to the others' existing clients for their services, they expand into to a new marketplace without really incurring new overhead, the combined companies now have opportunities for innovation through collaboration.

The dilemma of whether or not to expand is top of mind for many CEOs and much needs to be considered.  

Here is what several business owners and professionals have to share on the topic:

Paul Barron, Investment Advisor, Odlum Brown Limited
If expanding a service based business into new locations, the quality of communication needs consideration before launching an expansion.  How will you provide quality service and how do you manage the need for face-to-face time?  Another consideration is whether you understand the needs of clients in other locations.  Will you be able to deliver on the customer promise?  Will you be spread too thin?

Carol Hyland, Partner,  Muze Creative
We're noticing that the trend for companies right now may be to become more "customer centric" - operating from the customers' point of view. Faith Popcorn, in her trends for 2009, discusses that there are new rules of engagement with customers. The consumer is still cocooning and reframing their relationship with companies. This means that companies need to re-evaluate their relationship with their customers and adjust their marketing approach.

Susan Low, Principal Consultant, Directis Consulting
Perhaps with service based companies where the product is IP, that rather than chase new customers in new marketplaces, one could see expansion as a natural evolution of one's talents and, therefore, expand in one's offerings to existing customers better meeting the customers' expanding needs.

Janis La Couvée, Representative, Primerica Financial Services
How do you engage your publics? What is the authentic way to be in relationship with the people around you - your network?  With the advent of social media networking this question is more important than ever to answer.  Is it about talking all about yourself?  Or can you engage people in a way that they play a role in shaping who you are to them? 

Lianne Macdonald, LL.B., Beacon Law Centre
Being caught by a shift in the market when all strategies were geared to the previous market realities change can be a cause for panic, but it is also a time to keep your long term goals in mind recognizing that the business environment will change again.  It may be that using long term goals as a guide is what will support your sustainability.

Bert Zethof, CEO, The Surge Group
The question to ask for your business  is whether your industry is going through a cycle or whether it is going through a fundamental shift where you need to re-examine your business model.  Whatever answer you come to, it is a time to look at your business to see if you need to adapt.