Leader, sprinter, marathoner or short-distance runner? 4 strategies of Polish companies for 2023
Sales & Marketing | 5 min
The crisis will get worse, entrepreneurs believe. So what strategies are Polish companies going to adopt to cope with market threats, including inflation? Sprint, marathon or perhaps maintaining the current pace of development? We present forecasts and 4 main strategies for 2023.
What are the forecasts of entrepreneurs for the first quarter of 2023 ? What scenarios are they creating as they urgently review their strategies? Where do they see threats and where do they see opportunities for growth? These are the questions we asked 300 managers of medium and large companies, who are leaders in their industries.
The biggest concerns? Declining profitability and financials
Entrepreneurs are primarily afraid of a decline in business profitability and loss of liquidity. Half of the respondents forecast a decline in liquidity ratios over the next six months, and only one in three managers believe it is possible to maintain them at a similar level. Only for some of those surveyed (13%) do current conditions offer a chance for improvement. This is not surprising, since, like a pandemic, one can find industries for which the current situation is more of an opportunity than a threat.
The projected financial problems could have multiple sources. Due to inflation, according to half of those surveyed, operating costs will rise, especially in services, and inventory levels will fall. Many manufacturers felt that the best protection against loss of value of accumulated funds would be to place them in goods. Add to this the fact that more than half of the respondents expect further price increases in their industries. In this situation, according to almost one in two managers surveyed, inflation will slow down demand in local and foreign markets within six months, which will definitely intensify competition. The fight for customers, according to those surveyed, will therefore be much more difficult.
The projected increase in costs and liquidity difficulties will ultimately affect the decline in investment and possibly employment. Respondents from the manufacturing sector are more likely to expect a decline in employment than those from the services and trade sectors. A sizable portion of respondents (42%) also expect a decline in production, which will negatively affect key macroeconomic indicators and, in the long run, could lead to a deep recession.
Optimism despite difficulties. 52% of respondents see the crisis as an opportunity
Is inflation seen by managers only as a threat? It turns out that not quite. 52% of respondents view the current situation as both a threat and an opportunity. Every crisis is a moment of weakening competition, and opportunities for acquisitions arise, so it's worth being financially and resourcefully prepared to take advantage of new opportunities that will put you one step ahead of the competition.
The current situation, according to those surveyed, requires an adjustment and sometimes even a change in strategy. Almost half of the managers believe that a minor adjustment is enough (49%), but one in three say that their strategy definitely needs a deeper revision. Only 14% of respondents believe that in the current situation it is enough to stick to the direction set before the outbreak of the war in Ukraine, while 5% admit that their company needs a change in the business model or a thorough overhaul of the operating model (1%).
4 market strategies of Polish companies for 2023
Four main approaches to the challenges of the coming year emerged from our conversations with managers. These are:
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Leader (15% of surveyed companies): We will run faster than others!
These are companies that intend to grow faster than their competitors. In their operations they want to focus on both existing and new customers. More often than others, they focus on simultaneous development of new products and sales channels, and are particularly concerned with strengthening the e-commerce channel. They intend to accelerate growth by establishing partnerships and leveraging licenses, looking at it from a broad perspective. They want not only to conquer the market, but also to optimize their processes, so they are more willing to invest in digitization and automation than other companies. This is the strategy more often chosen by market leaders.
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Sprinter (38% of respondents): Aggressively fighting for the market will allow me to survive!
This group includes companies that more often than not are already in a difficult situation today. Their survival is to be ensured by restructuring their operations and focusing on a more aggressive sales policy aimed mainly at existing customers. This strategy is more often taken by large manufacturing companies.
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Marathon man (35%): We spread our strength, we look further than others!
It's difficult to maintain a market position these days. The surveyed companies in this group are not looking for new segments or markets - instead, they are aiming to be more effective in developing relationships with existing customers. This requires reviewing the organizational structure and adapting it to new conditions, and perhaps recruiting employees to ensure better quality of cooperation with customers. Such plans are more often made by mid-sized manufacturing companies.
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Short-distance runner (12%): You have to run, you might make it!
Such a strategy is characteristic of a group of companies that are thinking about growing broadly and want to reach new customers and develop relationships with existing ones. However, they lack ideas, directions and tactics. They don't take special measures, they just wait for the situation to develop. This is how large service companies behave more often.
Summary
- Declining profitability and loss of liquidity are the biggest concerns for entrepreneurs, with as many as 50% of surveyed managers indicating this.
- One in three managers believes their company's strategy needs to be revised. The most popular strategies are Sprinter (fighting aggressively for the market) and Marathoner (developing relationships with existing customers) - 38% and 35% of respondents, respectively.
- Large service companies are more likely than other companies surveyed not to take specific actions; they lack ideas about the direction of development.
About the study
The project was carried out in August 2022. 300 managers participated in the survey. Half of them were owners, CEOs and board members, the rest were directors of key functions. The respondents represented medium and large companies in manufacturing (50%), services (26%) and trade (24%). The vast majority represented companies that are leaders or key players in their industries (80%).
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