Firms look to ‘leapfrog’ ahead of the competition

A SURVIVAL of the fittest mentality is emerging from the UK’s business community with firms viewing the recession as a way to “leapfrog” competitors.

Research by Barclays Commercial shows that corporate attitudes remain focused on competition over consolidation with more than half of the 305 business owners and managers questioned admitting they view the challenges faced by competitors as a key recessionary opportunity.

A third viewed staff loyalty, retention and productivity as their greatest chance during the downturn.

The research also revealed strong evidence that the recession was significantly and permanently transforming the UK economy, with 60% of businesses claiming their organisation had been transformed for good due to the impact of recession.

Fewer than a quarter of companies have continued to operate unchanged.

Lee Collinson, head of Barclays Commercial Bank in Yorkshire said: “These results show that far from being focused solely on survival, many companies are using this period to make a renewed push for growth and market share.

“We are also seeing a grass roots economic transformation in the UK as businesses change what they produce and how they produce it en mass. This transformation is one that businesses and banks alike are working hard to understand and plan for.”

In an interesting twist on cash flow, it appears late payments (37%) are in fact causing greater pressures than a lack of demand (34%) backing up recent research by Grant Thornton’s Sheffield office.

Meanwhile, in a boost for free trade supporters only 1% of business leaders surveyed said protectionism would help their sector through the recession.

Asked when their business would return to a sustained growth phase 24%claimed they continued to grow while another 60% envisioned a return to growth within 18 months.

Just 3% of businesses did not expect to return to sustained growth within two years.

Mr Collinson said there was further positive news in the findings for the banking industry as more than a third of businesses pointed to their banks as the single most important resource during the recession – second only to customer base.

“Banks must evolve quickly in the current climate, and with our relationship directors spending 50% more time with their clients and the launch of major initiatives to offer practical advice and support for business operating through the recession, we believe Barclays Commercial is moving in the right direction,” he added.