The Business of Relativity
A State of Being Referenced
By Esmond Ng 05/06/10 © Copyright
Recently, there was an article suggesting that the strengthening of the Singapore dollar would not affect our exports. In the conventional school of thought, the appreciation of a country’s currency would naturally lead to its exports being comparatively more expensive for the importing country. However this article suggests that because of the stronger dollar, the inputs (which are mostly sourced internationally) into the export products become cheaper; thus not affecting our export costs and quantities.
We are not probating nor assailing the article’s point of view, but instead using it to bring up a relevant issue of relativity. When we try to make any sort of comparisons, the subject will always be relative to another matter. When we purchase our end-product inputs, what is our exchange rate to the source country? Is the other currency moving in the same direction too? Or is our appreciation really a true indication of more value?
If we are assessing exclusively, then whatever we are looking at will always be absolute for there is nothing else to benchmark against. Personally, a 1.0L automobile is a luxury to me. (Or any other affordable automobile for that matter of fact) However, once you put the subject next to a Mercedes or even a Bentley, the comparison immediately becomes obvious.
I boldly propose that Sun Tzu’s most renowned phrase has remained famous over the last 2,000 years precisely for the same reason. Without knowing who and what we are up against is surely tantamount to failure. How can we expect to compete with something that we are not aware of?
There are numerous tools and methodologies known for carrying out competitive analysis. Most of which almost always boil down to the same few principles with “Research” commonly being the first agenda as it sets the forward direction.
Who are our immediate competitors? What advantages do they have? Are there gaps that my business can thrive in? These are perhaps just the tip of the iceberg when accosted with the increasingly competitive arenas that our industries are in.
Then who do we reference ourselves against? If we are the top few market leaders, naturally our strategy would be to compare our strengths and weaknesses against the other top brands available. If we are closer to being a statistic in the sheer volume of companies doing the same replicable business, then we should seriously investigate into setting unique propositions and differentiating ourselves.
Only through thorough reflection and more reflection would we know how to capitalize on what we’ve got and where to improve ourselves where it most counts. The important thing here is knowing which other business(es) we are relative to. Talk to many people; experts and laymen. Talk to consultants if you have to. Finding out how you compare to the next better player will set you free.