Micro, small and medium enterprises (MSMEs) are advised to pivot business models to meet changing consumer needs and adapt to a new normal amid the pandemic.
“Pivoting is essentially looking at your strength… So where do you find this strength and competency? Well, you can find them in your current product, process, your plans, your people, property, position in the market, your platform, your partners,” Rene Domingo, professor at the Asian Institute of Management, said in a webinar.
To support pivot strategy, Domingo said firms can repurpose their assets if they have idle ones and use them to develop new products and processes.
“(If you) don’t want to spend so much capital investment at this point in time so you have to find ways to use your idle facilities, idle machines, (and) idle land. And then equally important will be looking at your people as assets, reskill them so that they can help develop your products,” he added.
Domingo cited as an example a pawnshop which can shift to a jewelry shop or money remittance.
“If you have that core competency, you can pivot to any industry that is surviving the new normal…This is not random diversification, they are all related. You are jumping from one to another and you are not spending a lot. You may use the same people, you can re-skill your people very easily,” he added. “This is the way of thinking in pivot in the new normal.”
Domingo considered employees another asset of a business who can be partners in co-designing the products.
“Because they are the front-liners, they know the customer expectation. They are the closest to the voice of the customer. Make them think like entrepreneurs, don’t look at them as rank and files, as laborers,” he said.
Domingo also underscored the importance of supply chain business partners whom entrepreneurs can work together with and address the needs of the customers.
“Address the new needs, the new markets that are looking for safety, hygiene, convenience, and value for money and then deliver a compelling value proposition. Package it that the price will be affordable, (and) cut order processing time. These are the ways to really deliver, make it more competitive because the other competitors may be doing these,” he said.
“One of the value propositions is affordability. If they cannot afford it, they won’t buy it no matter how good the product is because they have lost their jobs, they have lost income. To them, the future is uncertain, they want to hold on to their cash,” he added.
Domingo said entrepreneurs must create a competitive edge for their products.
“You want to stand out among those who are pivoting. It is not just serving the market but trying to be better than other MSMEs who are pivoting in your space,” he added.