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Peanut Butter or Jelly? Market Share that Sticks

Peanut butter is sticky. Jelly slides right off. If your business borrower is pursuing growth during the recession, use this analogy to evaluate their choice.

This thinking was inspired by today’s post in  Steve McKee’s blog: Find Your Nerve. Each business day in the fourth quarter an executive from a different company weighs in with a guest post.

In today’s post, Opting Out of the Recession, Eric Bipus CEO of CNH says:

Before we go rushing head first to implement a
recession-busting growth plan, the key strategic question to consider
is whether or not our actions will lead our companies to a permanent
shift in market position
.

The Peanut Butter Strategy: Market Share that Sticks
 


PnutButter.jpg True, Mr. Bipus did not mention peanut butter in his article. But it is what came to my mind immediately. (I guess that is because I did not have my peanut butter on english muffin yet this morning.)

In balancing the two competing objectives of minimizing any hit to
profits while attempting to capitalize on long-term growth
opportunities, CNH found three opportunities that compelled them toward the growth strategy.

  1. Opportunity to create strong relationships with competitor’s distributors
  2. Opportunity to take advantage of weaker competitors currently at risk
  3. Opportunity to capitalize on recent product innovations

And this reality…they would lose market share if they retrenched while their competitors invested in growth.  Read the post here.

CNH did not opt out of the recession.

Taking advantage of recession-induced opportunities is definitely participation.

  • What stories can you share of business borrower’s successful efforts to solidify market position and/or grow their business during the recession? 

  • How are you as a business lender going to differentiate between
    • a business whose profits are down because they are challenged by the recession and
    • a business whose profits are down because they are strategically taking advantage of the recession to grow their business?
About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.