Companies that invest in stable economies on most occasions stumble after entering more volatile markets. Such changes happen because most firms believe they can derive a sustainable strategy that offers them a cutting edge. However, survival demands that these companies position themselves to deal with likely threats while taking advantage of available opportunities by including the concept of actively waiting during comparatively quiet times. Companies specialized in active waiting often thrive and survive unpredictable markets. The first principle of active waiting is having clear priories and a fuzzy vision by describing your company’s scope and domain geographically and having broad aspirations (Quaglia, 2020). The second principle of active waiting is probing the future. The principle involves scanning the future environments while experimenting with potential markets and opportunities. For instance, a company like Brahma in Brazil took advantage of the potential for future growth of the soft drink industry in Venezuela and Argentina by using affordable forays to create a solid market position.
Additionally, the Brazilian brewer researched the established markets to identify new techniques that were likely to affect their operations. Brahma, which changed to InterBev, is currently the most prominent beer manufacturer worldwide (Quaglia, 2020). Similarly, BEA Systems, a software company, took advantage of a rare, exciting opportunity in the new software market and received revenue of over one billion dollars quicker than any other firm in the software industry. The third principle is maintaining a war chest, which involves providing a perfect hedge against threats and reserving cash. For instance, Embraer, an aircraft manufacturer, was able to avoid debt by buildings its cash reserves, pilling its stocks, and even getting a listing on the New York stock exchange market (Sull, 2005). The fourth principle is keeping the pressure on while continually machining cost-cutting routines and operational products. The last principle is declaring a company’s main effort. Such is done by evaluating all investment activities and how they support the main action.
Bibliography
Quaglia, Lucia. The Politics of Regime Complexity in International Derivatives Regulation. New York: Oxford University Press, USA, 2020.
Sull, Donald L. “Strategy as active waiting.” Business Strategy Review 21, no. 4 (2005), 58-63.