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GlassBuild Speaker Helps Companies Strategize in Current Economic Climate
Comparing your business with economic trends, practicing diversification, and understanding the phases of business were the themes of “Building Profits into Tomorrow”, a seminar presented by Jeff Dietrich of the Institute for Trend Research, Tuesday at GlassBuild America.
“As the U.S. economy goes, so goes your business,” said Dietrich, pointing to Florida, which at one point believed it had “beaten the market” but today is experiencing worse recession than the rest of the nation. He explained how a business can compare its historical and rate-of-change data with information such as U.S. Industrial Production and Home Improvement Production Spending to maintain a clear picture of where it fits in the grand scheme, thus improving forecasting and strategy.
Dietrich also encouraged window and door companies to watch not only year-to-year, or 1/12, data, but also 3/12- and 12/12-month moving totals, which helps remove volatility from the figures and offer advanced notice of what’s happening, when compared to national and global economic data.
Diversification was recommended as means to deal with the current economic climate. “There are a host of new companies who entered the window and door business within the past 10 years and are not prepared to handle this downturn,” he contended. He suggested non-residential construction, particularly office and retail construction, as a good place to dedicate at least a small portion, though not all, of a company’s attention. “Build your safety net,” he advised.
The Institute has identified the “four phases of a business” cycle, with which companies can assess its current activities and determine where it stands in the cycle to strategize and protect itself if it discovers it’s in a dangerous situation.
Speaking briefly about China, Dietrich attempted to reassure attendees, declaring, “the impact of the global economy is very real,” defining a number of factors he believes will create a “leveling effect” to the current boom from China. He did exhibit a degree of respect, however, noting “they’ve achieved [growth in the manufacturing industry] in 20 years what took most countries, including us, a century.”
Finally, Dietrich addressed the importance of energy efficiency. He cited countries like China and India that have booming populations but are only beginning to use oil-fueled transportation such as automobiles. The cost of oil, he contends, will only increase. “We are developing alternative energy fuels, but are 10 years away from true independence [from oil],” he said. “If you’re looking three-and-a-half to five years out, and you haven’t addressed energy efficiency, you do not have a strategic plan for your business.”
Dietrich summarized his presentation noting the U.S.’ long-time ranking as the largest contributor to the world’s gross domestic product (currently 27.7 percent, trailed by Japan with 9.3 percent) and how it positions us with a very good foundation to branch out in new directions and explore new opportunities.
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