As most literature gives examples of how avoiding to get into a declining market, almost nothing can be found concerning how to get out of a declining market.
First, it is necessary to give a working definition of market in this context.
A market is the direct link with the production of a company's goods and/or services.
E.g.: Production of B/W TVsets, analogue mobile handsets, out of date fashion.
This does not mean that there isn't a market for this products anymore, but that the market has become too little. The same counts for new products. There, the device is 'If there is a niche in a market, is there also a market in the niche?.
Second, the best is preventing to get into a declining market. Innovation is a key-issue, but this requires an organisational flexibility. There must be space for personal development of all employees, because they are at the base of all processes. Job rotation is one way of stimulation. They also should have an idea of the total picture of the company and the market.
But in reality, what happens? Not much. In fact it is a complete other manner of management. The leadership capacities of managers have to be very strong. For the long term, there are many advantages, where under the continuously questioning of necessity of activities.
Now, suppose that your company experience a falling revenue, without better explanation as increasing competition, lack of technical knowledge of salesmen, not enough people or not the right people. In this stage, the advice M. Porter gives you is leave the market ASAP. For huge corporations, this is relatively simple to close down a unit, but for small businesses, it is a question of live or die. For many companies, it is the only solution.
(2) Business, not busy-ness!
(3) Do it!
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by Mario Parys, also for more information.
The groundrule for this process is to think about the difference between busy-ness and business. Where it is a fashion in many companies to be as late as possible in the company buildings, questions can be posed about the productivity of these hours. Isn't it that since industrial revolution, man is eagerly searching for having things done in less time.
This method of operations is frequently used to re-engineer departments in a company. On the other hand, there is the anxious
This paragraph may sound a bit paradoxical, but it is an essential attitude. It is the reference to not enough people or/and to the right people.
In case of starting up a new business, a lot of things have to be done. At first sight, many manpower is needed. But this is not really true and even more, it is the creation of excessive costs and non-adding value tasks.
The actual problem is that business is not good defined in the company. Too many times is thought that a lot of (historic) information is imperative to take good decisions, where common sense and basic insight is far sufficient (in fact it is the tacit knowledge you have gained that helps you to make the right decisions).
About the definition of the business/market, I learned that it is something on the job. That's why one must start with a small team. To make this real, take next example. Suppose you start up a new business and hire from the beginning 10 people, all with little knowledge about the company. They all build their network to gather information and having interviews several times with the same persons or having meetings with them. They all come at the end to other conclusions about the mission, and start to work into different directions.
Initial Version 14 May 1998