The war with Iran has perhaps permanently altered the world economy, making the cost of goods and services to be forever more expensive to businesses and the consumers alike.
Airlines
Just recently, Spirit Airlines, which was one of the last surviving competitors for lower pricing, went formally out of business.
This is at a time when Southwest has pivoted away from their customer-friendly brand and adapted more to the business model they previously competed against.
All the while American has begun wiping accumulated miles from the flyers who are flying less frequently than they would like them to. They are forcing flyers to decide if they want to continue their loyalty or move their loyalty to another airline.
Baggage prices are increasing.
Delta is also the first major airline to end the food/beverage service for flights shorter than 350 miles. Not much, but is it only the beginning of another trend?
The bottom line is that the emphasis of the major airlines is now moving toward dramatically expanding their more lucrative business class and first-class offerings while making it even more miserable for the average Joe.
Autos
Average car buyers are just now realizing that 10 years of financing becomes unsustainable. Especially when the cars they purchased are still worth less than what they needed for their trade in – leaving the up-side down.
Why? Because the average auto payment is now closer to $800/month. Think about it, this not so long again was a monthly mortgage payment.
Questioning College
In a time when many jobs are being wiped out because of the AI revolution, people are scrambling to find gainful employment, and college grads now realize that their $60-$100K college degree may now need to be traded in for learning a trade!
The New Reality?
Businesses who want to succeed in the current economy must be proactive in their strategic planning! They might be wise to assume that prices are not coming down, customers may continue dropping off, and wages need to adapt.
Surviving will require a hard look at what is the most profitable offering to customers they serve and drop the others. More importantly, reaching out to their existing customers with fresh ideas and offerings under consideration. (i.e., Focus Groups and comprehensive Surveys)
And to be competitive, make it as easy as possible for a customer to reach a “live” human. Because, remember most already feel that they have been served up a raw deal in today’s New Normal.
The Russell Strategy Group is your go-to resource to review your current business model and offer pivoting solutions to help you adapt to the New Normal.
For over 30 years, John (the founder and Senior Adviser) has been instrumental in guiding business through chartered water of adversity. Let’s turn these challenges into opportunities! About russellstrategygroup.com