Judging by the trends in global markets, 2024 is showing signs of elevated consumer confidence. Of course, as Groucho Marx famously quipped, predictions are very difficult, especially about the future.
While we are not in the business of market forecasting, our team does understand how intangible assets play a role in helping companies protect both revenue and margin in the good times and bad.
But if opportunity is getting ready to knock, then it’s crucial to explain why doing the hard work to figure out what makes your company different could give it an advantage as you chase gaps in an increasingly buoyant market.
It all starts with the US Federal Reserve. In December 2023, the central bank held its key interest rate steady for the third month in a row. After a series of bullish rate increases in the early months of last year, the Fed’s change of strategy indicated it could be feeling more comfortable with the medium-term outlook for the US economy.
The US capital markets responded positively to the Fed’s actions. Most of the major indices (S&P 500, Dow Jones, NASDAQ) showed an immediate jump in added value after the decision and held at a higher level well into January 2024.
The Fed’s interest rate pause is already affecting consumer confidence in a healthy way. According to a University of Michigan survey, December showed a bump in market-wide confidence, pushing the sentiment higher than at the lowest point of the Covid-19 pandemic.
The survey’s reading of one-year inflation expectations also fell to 2.9%, the lowest level since December 2020, which probably will encourage the US central bank to start cutting interest rates in the first half of 2024. If it were to do so, that would no doubt boost consumer confidence across the US even more.
Ok, those are the raw numbers. There’s a lot of grey around the edges and the market is notoriously hard to forecast (as Groucho Marx quipped). But there are signs that 2024 could be shaping up to be the first year since the pandemic that things get back to “normal” – whatever that word means.
For B2C companies, rising consumer confidence is a good indicator. But positive public sentiment also affects B2B and other services companies as well. After all, interconnected economies mean that when one sector heats up it tends to raise the relative temperature of all other sectors.
So, how can your company prepare for a more robust economy in 2024?
The most important assumption any CEO can make is that if you’ve noticed a market opportunity, chances are that your competitors have also seen the same gap.
The second part of an assumption like this is that if your competitor can see the same opportunity, then you should be the first to take advantage of the gap. If you have a solution ready to go, that’s great. If not, you should be asking how quickly you can get off the starting blocks to gain a first-mover advantage.
That’s where intangible assets can offer a huge advantage.
When it comes to products or services, the point of difference between two competitors is often marginal, at best. The true differentiation always boils down to the intangible assets that wrap around a product or service. These are what make your product stand out on the shelf.
Intangible assets that give you a head-start on a competitor might include superior customer data, better software, stronger brand power, the ability to quickly gain regulatory approvals and certifications or perhaps a network of supplier relationships, among many other asset types.
None of these intangibles are replicable in the same way a tangible product might be and any of them (or a mix) could be the answer for opening economic doors. That’s why it’s so important to have a decent insight into your intangible assets before the economy starts to shift.
The question is: do you know what your critical intangible assets are?
This isn’t a trivial exercise, nor is it an action you can afford to delay. Intangible assets are upstream from any strategy. Without a clear vision of what makes your company unique, no strategy can stand up to the fluctuations of a changing market.
The sooner you begin the process of understanding your intangible assets, the better prepared you will be for when the economic winds fill your sails. Again, you must assume others will be blown by the same winds and will hoist their sales just as quickly as you.
Moving faster is only possible by cleverly wrapping intangible assets over the top of a product or service. Done right, consumers simply won’t even see your competitors’ offerings.
That’s the power of a robust set of intangible assets. Happy sailing!
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