Achieving sustainable growth in today's market requires a focus on business models, as Karl Edge, partner at KPMG in Birmingham, explains... Over the next three to five years, local companies will see significant changes to their marketplace. The rate of change in our increasingly global environment is unprecedented and this coupled with increasing competition from emerging markets will put even more pressure on companies to differentiate and challenge the way in which they operate. For management teams, knowing how your business is to grow and deal with market forces will be fundamental to success. Yet, many are finding themselves immersed in the day-to-day operation of the business, leaving them with little or no time to reflect on and evaluate the position of the business. Knowing how to take a business to the next stage of its growth life-cycle isn't always easy, especially if you are operating in a mature market and spending most of the time fire-fighting the ever increasing daily challenges of running a successful business. However, for those management teams who are successful in finding the time to step aside from the business to think strategically, the rewards are there to take. Clear strategic vision from management is fundamental and the business model plays an important role in determining this. If this model is designed and then locked away in a filing cabinet only to reappear every 18 to 20 months for review, then its use becomes obsolete. The frequency of rethinking and flexibility of the business model is fundamental to driving a business forward and there is an emerging logic that a fixed cycle review of a business model is not the way to go. In most organisations, a strategic rethink often coincides with the annual budgeting round. In doing so, however, you will incur a standard set of behaviours at a standard pace. In reality, the external marketplace is not operating in this way. Changes are taking place rapidly and by delaying any strategic review so that it fits with annual internal events is unlikely to mean that market forces and opportunities pass you by. You only need to look at the rapid changes in technology to realise how quickly things are moving. All management teams should ensure they are actively monitoring their marketplace closely - not only the changing dynamics but also watching the competition, regardless of how long it will be before they become a serious threat. By reviewing the business model outside of the annual set period, management teams are able to adjust their procedures and tactics on a timely basis, rather than implement costly wholesale change annually. This approach is also more acceptable to the company's stake-holders, including importantly, the employees from whom the management team will need complete buy in from if they are to succeed in delivering growth. As with any form of change, the smaller the alterations, regardless of frequency, the more acceptable they are. For those who remain on the annual cycle, one of the main considerations must be - how long can you wait before taking action? There is no doubt that the competition, whether from emerging markets or from operators within the domestic market, will be looking at how quickly they can take additional market share. ..SUPL: | 
