Today Business And New Economic Conditions

I discussed a new economic reality and what companies can do to preserve jobs in a down economy. As I continue addressing this issue with former CEOs, I find myself peeling the subject in layers as though peeling an onion.

As I have stated in the past, it is easy to layoff people or close manufacturing plants when the economy slows. It seems our business schools have not considered another possibility and we are perpetually stuck with laying people off to preserve profits.

At the same time, when you examine closely, you see this method is extremely unprofitable. Why? When you layoff a percentage of people to save a million dollars, for example, you don't openly discuss the repercussions. If your enterprise is to remain a going concern, you will eventually have to hire people to fill those vacant positions. When you rehire, you have to factor in the associated costs to fill the position. You have to advertise for the positions. 

You interview candidates which is time and then you train those people. The real dollar costs could be $3 million on a $1 million savings. That does not factor the intangible costs of lower quality customer experience that tarnishes your brand because former employees may have had better knowledge of customers' needs. As the layoff strategy incurs costs greater than the savings, it makes sense for many leaders to orchestrate financial engineering to hide the backlash of the unprofitable layoff strategy.

As an alternative strategy, consider the horse and buggy industry. As the proliferation of automobiles continued in the late 1800s, those horse and buggy companies changed their model. They started manufacturing cars. In this example, the move was reactionary. As technology and outsourcing continue to encroach on today's industries, a proactive plan is needed.

In another example, with the expansion of the digital age, paper manufacturers may be squeezed. Instead of shutting down plants, transform plants or look for new business abroad. As people use less paper and third world countries increase prosperity, new needs will arise. Furthermore, the global population continues to grow. Therefore, one opportunity for a paper mill is to transform the facility in whole or part from paper for newspapers and periodicals to toilet paper. This is an area technology cannot easily replace. In fact, with an increase in population and more countries participating in global commerce, this commodity will experience increased demand.

 However, this should not be a reactionary strategy like the horse and buggy companies. To thrive as your current industry dies, you should have your employees participate in this strategy. Have production look at the necessary equipment to make the change.

Sales and marketing should be researching new markets in the US and abroad. They should be talking to current and prospective customers as well as distributors and suppliers. In addition, it may be worthwhile to invest in training for key personnel in the targeted commodity.

If  leadership takes on the mindset that they are constantly training employees to mitigate the risks of a dying or transforming industry, they will have to think about training staff and management to perform in new territory. Even if your industry is bulletproof, it would be wise to use this strategy to navigate through recessions. That way you are less likely to fall into the cycle of laying people off and later filling the position with someone else. There are always new opportunities that can be exploited when faced with chaos. 

T.G.I. Friday's Marketing & Economic Trends

T.G.I. Friday's faces challenges every day. Certain factors from their general and specific environment pose threats to the company. There are many ethical issues surrounding the business that contribute to social responsibility. However, T.G.I. Friday's does not let these factors stop them from continuing to grow and thrive in an ever-changing economy.

Just like any other business, T.G.I. Friday's is affected by its general and specific environment. The general environment of a business is the economic, technological, sociocultural, and political trends that indirectly affect all organizations. T.G.I. Friday's economic trends are extreme. Their business runs in seasons, as seen in any other restaurant. The business struggles and income is low during the fall months, as trends are seen that customers eat at restaurants less frequently during these months. Technology is an extremely important factor in how T.G.I. Friday's runs. From the smallest use of technology when rewards customers sign up online, to the greater use of technology when servers use computers to ring in orders, to the most important use of technology when the accountant uses computers to do the business's accounting, technology absolutely runs the organization. When it comes to the sociocultural component, T.G.I. Friday's does not target one demographic. There is a wide variety of customers, employees, and managers which can be found within the organization's walls. The political trends that affect T.G.I. Friday's are ever-changing. Many different laws regulate the way the business is run, such as advertising laws, serve safe alcohol awareness laws, food safety regulations, and even employee policies.

The specific environment of a business is composed of factors such as customers, competitors, suppliers, industry regulations, and advocacy groups. Some would say that the customers run the business. Fact is, without customers a business would not survive because it would not make money. Competitors threaten T.G.I. Friday's every day when they develop new menu items that are similar to their menu items, and sometimes even at a cheaper price. Suppliers can also run a business, because if a company has no supplies, they cannot open for business. There is industry regulation that is in place to ensure that every T.G.I. Friday's is the same atmosphere and the customer gets the same experience no matter which location they go to. Advocacy groups threaten the business because they are constantly trying to influence the way the business is run as well as change their practices. These are just a few of the threats T.G.I. Friday's faces daily, however it is not uncommon for any business to face these threats and many more.
 T.G.I. Friday's has a social responsibility to increase its profits in an ethical way. However, behind closed doors there lie

certain unethical practices that could hinder the business from flourishing. As seen in the movie Waiting, many restaurant employees cut corners to make their jobs easier. One might call these types of employees "half-cheeked" workers. Nevertheless, T.G.I. Friday's has a social responsibility of making sure their customers receive the most superior experience every time they enter the restaurant. Not only is it morally corrupt to allow these shortcuts to take place, it is also illegal and disgusting. T.G.I. Friday's strives for a sanitary, healthy environment for every customer, every time.

T.G.I. Friday's is a staple not only in the American diet, but also in international diets. Although their main focus is to prevail in the United States of America, global forces affect how the company is managed, and where new restaurants are developed. Sixteen countries include a T.G.I. Friday's restaurant, and the business continues to grow. Needless to say, T.G.I. Friday's manages extremely well in the ever-increasing globalization of the economy.

T.G.I. Friday's brand has become bigger than the founders ever imagined in 1965 when the first restaurant opened. The business has blown the competition away, not letting factors like the general and specific environment, ethical issues, or globalization become a downfall to the company. Through a combination of franchise and corporate locations, T.G.I. Friday's has become one of the largest chain restaurants in the world. Not only is their food served within the restaurants, but recently their food has been produced and packaged to be sold in grocery store freezers. All Customers and employees, alike, agree that T.G.I. Friday's is an atmosphere that is fun and inviting and attraction.