Competitive horizon
Article Type: Competitive horizon From: Strategic Direction, Volume 30, Issue 10
Growth predicted for luxury industry
According to a report published by http://www.swissinfo.ch, the market for luxury items is set for strong growth. Consumers in the USA are driving expansion, with jewelry being one of the market’s fasting growing segments. Perception of jewelry as an investment is further helping to fuel demand. Sales of accessories overall and watches are also significantly contributing toward growth. The report predicts that the sector will expand over the next few years by between 4 and 6 per cent, in part due to mature markets demonstrating considerable resolve to overcome any crises. As well as the USA, tourists from Asia are helping Europe to post strong sales. Demand is also rising in African countries like Angola and Nigeria, where consumers are purchasing luxuries as a means to flaunt their increased spending power. New technological advances provide additional encouragement for the industry. Analysts believe that this has positive implications for the wider appeal of watches, eyewear and other wearable devices.
The economy in China
China’s economy is predicted to grow by 7.5 per cent by the end of 2014, according to the International Monetary Fund (IMF). The organization is positive about consumption and the labor market, while also believing that economic activity will increase as the global recovery gathers momentum. The likelihood of inflation remaining under control at below 3 per cent is likewise noted. However, a reduction in investment as a consequence of lower domestic demand provides some cause for concern. Increases in debt and environmental costs together with income inequalities are other factors to threaten future growth. As reported by http://www.chinadaily.com, the IMF believes that achieving growth which is better balanced and more inclusive necessitates the implementation of various reforms. These include strengthening the financial sector and restructuring state-owned enterprises to narrow the void between private and public sector organizations. The report argues for a need to prioritize medium and long-term expansion over more immediate growth and advocates tighter control of credit, off-budget spending and expansion as key to such aims. It is believed that shifting the emphasis toward growth that is less risky and more sustainable makes economic expansion of between 6.5 and 7.0 per cent in 2015 a feasible target.
Business plans advised for small- and medium-sized enterprises in UK
Research conducted by Exact has found that small firms risk being disadvantaged if they do not have a business plan. The business and finance software provider claims that companies with a plan are over twice as likely to achieve business objectives. When it comes to increasing profit margins, the likelihood is around a fifth greater. Despite this, more than a third of UK small- and medium-sized enterprises (SMEs) confessed to not implementing a business plan. Lack of knowledge and a belief that the action is unnecessary to them were main reasons cited. As reported by http://www.mybusiness.co.uk, it is important to review the plan regularly. The vast majority of firms participating in Exact’s survey claimed to conduct reviews on a weekly, monthly or quarterly basis. Just 1 per cent waited a whole year before reviewing the plan. The report points out the need to inform companies better in order to educate them about the process involved when creating a plan. It points out that hiring a reputable financial advisor can simplify the procedure considerably and enable the firm to secure the many benefits that having a plan can provide.
How to protect customer data
Recent high-profile cyber attacks such as the one involving eBay customers has highlighted the need for companies to ensure that all the necessary measures are carried out to safeguard important customer data. An article published by http://www.growthbusiness.co.uk points out the first step for any firm should be to know what information it holds, how and where it is stored and who is able to access it. A comprehensive understanding of the company’s obligations is likewise a must, and the report emphasizes the need to become familiar with such as data protection legislation and specific requirements laid down by relevant industry bodies. Reference is also made to ISO27001, the internationally acknowledged standard for the management of information security. Implementing this standard where feasible demonstrates a commitment to best practice. Securing expert internal or external help is another key measure. That way, it becomes more likely that an effective security policy can be devised to ensure critical aspects of security are effectively monitored. These include management of passwords, encryption, physical security and due diligence of third-party providers. Frequent review of the policy is equally vital. In the event of a breach, the report notes that responses must be swift and effective and the security policy should specify what steps need to be carried out.
Small businesses failing to utilize technology
Research conducted on behalf of BaseKit has indicated that SMEs are not fully exploiting technology as a means to engage with customers. One of the major shortcomings identified by the website building platform is a continuing reliance of websites which can be accessed only via personal computers. The report, as published by Growth Business (http://www.growthbusiness.co.uk) states that 91 per cent of SMEs surveyed admitted to not enabling access to their site via a smartphone or tablet. This is despite the fact that using such devices to go online has doubled in recent years. BaseKit also reports that mobiles account for over half the traffic to Web sites of high street companies to further emphasize the need to provide a mobile offering. An inability to update business sites and not advertising through social media are other weaknesses uncovered by the survey. Firms are further hindered in their quest to attract the maximum number of customers to their sites by not using search engine optimization.
Liquefied natural gas to lead Australian exports by 2017
Commodity forecaster UBS AG expects liquefied natural gas (LNG) to become Australia’s second-largest source of export revenue by 2017, Bloomberg (http://www.bloomberg.com) reports. Coal currently holds this position behind iron ore, Australia’s biggest export earner. At this point, LNG exports should triple to $54 billion, leaving Australia to possibly overtake Malaysia and Qatar to become the world’s largest LNG exporter by the decade end. According to the report, new gas projects scheduled over the next couple of years will significantly drive exports of a natural gas that is converted into liquid form for easier storage and transportation. Japan is presently Australia’s main LNG market, accounting for 78 per cent of Australia’s LNG market during 2013. But strongest future demand is expected to come from China as the nation’s economy continues to expand.
Stable performance forecast for global auto industry
Anticipated lower demand in emerging markets like Brazil, Russia and India has led to Moody’s Investors Service lowering its growth prediction for global sales of light vehicles. The credit rating firm has downwardly revised its 2014 figure to 3.2 per cent from the 4.8 per cent announced earlier. As reported by China Daily (http://www.chinadaily.com), expectation of around 8 per cent growth in China’s auto industry over the next 2 years will help offset the weakening emerging market sales. Growth of approximately 2 per cent in Western Europe is cited as another positive factor in the report. However, light vehicle sales in the USA are expected to increase by 4 per cent during 2014, down from the 7.5 per cent growth recorded in 2013. If Moody’s global growth forecast rises above 5 per cent over the next 2 years, the agency may change its outlook for light vehicle sales to positive. But the outlook might get altered to negative if the predicted growth figure is reduced to below 2 per cent.
Demand for bioplastics predicted to soar
Strong growth virtually all over the world is expected to see demand for bio-based and biodegradable plastics increase by 19 per cent each year to reach 960,000 tons by 2017, according to Freedonia. The US research organization points to rising consumer interest in sustainability and heightened use of bioplastics among processors and compounders as key reasons. In addition, the development of new products is creating different ways of using bioplastics. As reported by http://www.prw.com, stricter regulation of plastic bags and other everyday products is expected to positively impact on demand for starch-based bioplastics. Healthy interest in new bio-based plastics like polyethylene and polypropylene is similarly anticipated. In spite of this increasing demand, Freedonia believes that bioplastics will still only account for less than 1 per cent of the total plastics market by 2002. Performance and price relative to conventional plastic resins are seen as ultimately determining success levels.
