The Leading Edge - Summer 2008 - (Page 10)

Briefs SMaLL BUSInESS LOanS rISE Lending institutions issued more loans to small businesses in 2007 than in 2006, according to a report released this summer by the Office of Advocacy of the U.S. Small Business Administration. According to the “Small Business and Micro Business Lending in the United States” report, between June 2006 and June 2007 the number of loans for: • Less than $1 million increased by 15 percent. • Between $100,000 and $1 million grew almost 32 percent. • Less than $100,000 (which includes many business credit card loans) jumped about 8 percent. The total value of the loans increased by 9.4 percent. All the rates of growth were greater than the previous year. “Small business survival depends on access to adequate capital for startup and expansion,” said Chad Moutray, chief economist for the SBA’s Office of Advocacy. The report uses both Consolidated Reports of Condition and Income from June 2007 and Community Reinvestment Act reports for 2006 to review small business lending activities by financial institutions. The report also ranks lenders in each state and territory by their small business lending activities (not just under SBA programs) as well as large national financial institutions. A complete ranking and the study can be found at www.sba.gov/advoc/research/lending.html. rESPOnSE TO COMPETITOr’S MOVE Forget theory. Executives from around the globe and a variety of sectors say when a competitor introduces a new product or slashes pricing, they generally assess a few options and look forward two years at the most. That’s the finding of a recent McKinsey Global Survey of more than 1,800 business executives. McKinsey says that the findings contradict the textbook concept of management theory, which says companies reacting to a competitor’s move should immediately conduct a complex analyses of possible steps and countersteps across the competitive field, assess those moves with sophisticated financial metrics and quickly mount a response. However, most executives say they review three or fewer options and think only in the short term (no more than two years). About half said they only examine one round of countermoves and a significant number rely on intuition to respond, The McKinsey Quarterly reported. “Companies most frequently respond with whatever counteraction is most obvious at the moment—answering a price cut, for example, with a cut of their own, which often doesn’t hit the market until at least one or two sales cycles after the competitor’s move,” the article noted. However, most managers are satisfied with the results of the less-active approach. Given most executives’ satisfaction with the status quo of their responses, McKinsey says other businesses may be able to take advantage of that thinking. “Knowing that responses to competitive moves are generally straightforward and relatively slow— and that companies are unlikely to change in this respect—gives managers new ways to think about how they might gain a competitive advantage from their own moves,” McKinsey stated. For more on the survey, visit www.mckinseyquarterly.com FUTUrE In US, WOrLd FOr ManUFaCTUrErS While North American manufacturers face an uphill battle at times, 44 percent still intend to expand production in the United States over the next three years, the National Association for Manufacturers reported in June. The “Made in North America” survey was conducted on behalf of NAM, The Manufacturing Institute, the Canadian Manufacturers and Exporters, and Deloitte Touche Tohmatsu. It surveyed 321 top-tier executives in manufacturing companies of all sizes. Of the respondents, 45 percent were based in the United States. About 57 percent of U.S. manufacturers say they plan to become more globally competitive in the next five years across the supply chain, from sales and marketing to engineering and information technology. However, growth will not come easily. Structural, non-production costs such as corporate taxes, employee benefits, legal costs, natural gas prices and pollution abatement for U.S. manufacturers are now almost 32 percent more than the average similar costs for major trading partners, says Emily DeRocco, NAM senior vice president and president of The Manufacturing Institute. 10 VOLUME 8 n ISSUE 4 n SUMMEr 2008 http://www.sba.gov/advoc/research/lending.html http://www.mckinseyquarterly.com

Table of Contents Feed for the Digital Edition of The Leading Edge - Summer 2008

The Leading Edge - Summer 2008 Contents Better Negotiations Instant-Response World Leads to New Expectations for Voice Mail Bits & Pieces Top 10 Misconceptions of Doing Business in Cyprus In a Nutshell: Q&A The Leading Edge Alliance

The Leading Edge - Summer 2008

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