Recipe for business success revealed





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Published on Jun 2, 2010

But less than half of SMEs are getting a competitive edge.

57% of the UK's SMEs admit to undertaking only two of the six key actions necessary to allow them to compete with full effectiveness in today's tough market conditions, a major new report from Warwick Business School highlights today.

The six month study, commissioned by Royal Mail, has identified the six key factors firms need to address to compete effectively in current turbulent market conditions by accelerating their profitability and help generate an extra £15billion for the UK economy.

The report, which compares growth rates among 500 small and medium sized enterprises (SME) and their competitors, also proves companies which have successfully adopted at least half of the recommended 'ingredients' for success are more profitable than their competitors and in a better position to safeguard their business.

The six key factors in the Warwick Business School's "Blueprint for Success" are:
• Flexibility -- flexible and responsive managerial approaches enables customer expectations be surpassed
• Business process efficiency -- reduce costs and improve efficiency by addressing internal processes
• Marketing -- use the right marketing methods to make potential customers more aware of products and services, such the internet and mailshots
• Human resources planning -- actively developing staff and addressing a company's future employment needs increases flexibility, responsiveness and aids growth
• Growth ambition -- have a growth objective to shape a business's strategy and its willingness to invest in development
• Research & development -- get a thorough understanding of the markets and the best ways of delivering services, allowing a business to compete more effectively

Despite appearing to be straightforward business practice to some, the report reveals the majority of UK companies are not addressing these ingredients for success. More than half of SMEs (57%) admit to undertaking no more than two of the Warwick Business School "Blueprint for Success" recommendations and so are risking their competitors gaining an advantage.

And importantly the report's authors say that by adopting just one more of the "ingredients" these firms could dramatically increase their chances of increasing performance over competitors.

England's North West and Scotland are the only two areas where a majority of businesses are bucking this national trend. Over 10,000 companies (approx 55% of companies in the two areas) are actively addressing at least three of the success criteria identified by Warwick Business School.

The report, sponsored by Royal Mail, showed that companies in the best performing sector - business services - have been more than twice as likely (56% vs 27%) as those in the worst - the construction industry -- to have adopted at least half of the simple recipe for business success.

Stephen Roper, Professor of Enterprise at Warwick Business School says, "As the economy moves out of the recession and into a period of growth, adopting the blueprint will help firms make the most of the new opportunities that will emerge and so allow them maximise their growth and profit potential."

For more information visit http://www.royalmail.com/portal/rm/ju...


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