The Commercial Modular Building Blog

I briefly touched on the topic of downsizing in my previous post when I explained a solution for our modern problem of limited space, but the real reason for today’s prominent downsizing trend is the change of living and buying behaviors in the wake of the recession.

The baby boomer generation embodies this trend, as aging consumers seek to downsize from their previously larger homes. Most of these downsizers cite expense, maintenance costs, and overall effort when explaining their need for downsizing.

Large homes are costly in several respects. First of all, the homes themselves are expensive. Then you have the heating and cooling costs, which can be hefty in themselves. Add to that list cleaning costs, general maintenance costs, and landscaping (since large houses are usually situated on a large plot of land of course) and you’ve got yourself a pretty high cost of living, a cost of living that’s certainly going to be unacceptable in post-recessionary times.

So what does it mean to downsize? Well, this term does not only connote the act of moving into a smaller house, it has many connotations in today’s market, and has become quite a business of itself.

First, a consumer looks to moving into a smaller house, condo, or apartment due to excessive expenses, which is happening on a mass scale, since many newly prosperous builders cite small, green houses as their major seller.

But the process of downsizing doesn’t end there. People want their smaller houses green because not only do they care about the environment, they want to save on energy and other utility costs. Modern houses are being smartly built to take advantage of environmental utilities such as wind direction and natural light to handle heating and cooling needs. Some people are opting for solar paneling, some for improved insulation, and others for water saving technologies. Still others are opting for all of it to save money in the long run. All of these green technologies are creating quickly growing markets as well.

People are seeking to get rid of many excessive objects they once owned, and there are businesses out there that seek to help with that. Then there is the process of actually taking advantage of what little space people have to work with to still live comfortably in their homes. Single rooms are now multi-use thanks to smaller appliances and modular technology, all of these things creating other markets.

Businesses themselves are actively involved in the general process of downsizing as well. Businesses are constantly looking to cut costs and become lean and efficient in the face of a weak economy. Smaller facilities, more efficient use of materials, harnessing of green energy, whatever it takes to get by.

So as you can see, today downsizing is a big deal, and the term itself implies many different facets of slimming down and optimizing smaller amounts of space and material. The practice itself is generating its own newly booming market, generating a perpetual engine for efficiency/ecology-minded technologies and space utilization. This is how we will recover from the recession.

Supposedly the recession ended in June 2009. Until recently I had no idea that this was the case. I was still under the impression that we were continuing to experience the recession.

However, the recession might have been over more than a year ago, but that doesn’t mean the economy is suddenly “alright”. The economy is still in a very fragile state, which accounts for the appearance of a continuing recession. Unemployment is still high and consumer confidence is still pretty low, but on the other hand, recovery is slowly underway.

Many economists will say that recovery can be more painful than the recession itself, and it is looking like our economic recovery is going to be a long, arduous process, so we probably won’t see a vast noticeable improvement in the economy for a while. But the manufacturing sector has been expanding, and retail sails are slowly going up, which are both good signs that we could be on track for a slow but sure recovery.

Businesses are encouraged to continue moving forward while innovating, investing in capital for the future, and hopefully accepting more and more hires as they expand to get the economy back on track.

But the picture is more complicated. In today’s global economy, international economies are dependent on each other more than ever. Europe is still experiencing a serious debt problem that could have further ramifications for the U.S. economy (due to faltering exports). Though China’s rapid expansion can be a bit disconcerting to some of us, seeing as how China is now our #1 rival, their growth is very good for the global economy, and serves as a great place to invest. Various conditions outside of the U.S. pose various problems and solutions so it will definitely be interesting to see how things pan out.

On the upside, the modular construction industry continues to go strong, even in a weak economy, which is good indication as to where the future will lie. Allied Modular continues to report healthy profits and we are continuing to grow. Expanding industries like the modular construction and green industries will definitely help in getting the economy back on track.

Companies that adapt to the new economy have to innovate and slim down.

We understand pretty well now that today’s global economy is fast-paced and highly competitive. Many CEOs are asking themselves what they need to do to survive in this new, ever-changing global marketplace in the face of an ongoing recession. We’ve talked about what successful companies are doing to adapt: preparing for change, investing in green energy, branding…now I want to talk about the final two attributes that make today’s businesses adaptable and successful in this economy: the ability to innovate and slim down processes for maximum efficiency.

The necessity of innovation 

In today’s global economy, it is highly necessary for businesses to make innovation one of their dominant philosophies and to take measures in carrying out innovation on a practical level, which relates back to the article in which I stressed the need for businesses to be change-ready.

 The market is constantly changing, and very rapidly, with the incredible speed and availability of information. New competition is entering the marketplace all the time and this competition is constantly offering new ideas, taking advantage of previously untapped and unrealized consumer power. Technology is constantly changing as well, posing new problems and providing new marketable solutions.

The highly adaptive companies that are surviving are the companies that are constantly innovating to keep up with the market.

Innovation itself can pertain to technology, product ideas, marketing, or even the organization of the company. It doesn’t simply have to be about coming up with some new gadget or style, it could just mean restructuring the company as a whole or radically altering a company’s image.

Innovative companies are best able to remain relevant and appealing…and thus successful.

On slimming down

I approach the topic of slimming down with caution, especially when coupling the topic with the topic of innovation.

One of the main barriers to innovation is when a company insists on efficiency and profit-making ability as opposed to nurturing innovation and taking risks. Slimming down business processes can go two ways: either you make your processes more efficient and more effective, or you halt innovation and suffer for it.

Adaptive companies can restructure their processes and trim unnecessary waste in order to become more efficient, but they must also take care not to stifle much-needed innovation, and they must not be afraid to take risks either.

The optimal strategy is striking a balance between lean business processes and bold innovation. Not easy to do, but the successful companies will keep in mind both elements.

Conclusion

We’ve seen that the new economy poses quite a challenge for businesses. But with challenge comes innovation and change, and the emerging victors will be stronger and more successful than ever. To come out on top of the competition, it takes a business that can adapt and pursue bold new ideas, while taking advantage of existing methods and infrastructure to keep moving.

Branding

Branding has become an increasingly important practice in the new economy. As the global marketplace becomes increasingly crowded and competitive, it becomes necessary for a business to distinguish itself and develop a lasting consumer following. Because of the importance of developing a good brand, branding itself has become a highly involved science.

Today, the process of building a brand involves coming up with an appropriate name, color scheme, a possible symbol, slogan, and then marketing all of this not only to consumers but to the company’s employees themselves. Today’s successful brand is not just a name with some pleasant imagery; it is a culture, a way of life.

Sounds pretty involved, right? It sure is. Businesses spend big bucks on consumer research, figuring out what demographics to target and what makes those demographics tick. They then spend big bucks building brands that will connect with their desired demographics. After that they spend some more big bucks marketing their brands and nurturing and sculpting their brands into something distinct.  So is it all worth it?

Well, for starters, today’s most successful companies have built distinct brand names. Think of giants like Starbucks, McDonalds, or Nike. They have universally identifiable brands that can perpetuate their own cultures. Think of Apple’s products. Apple hardware has its own aesthetics that are immediately recognizable and completely different from everything else. A huge body of consumers identify with Apple’s products because of their slick appearance and air of elegance. Consumers identify with Apple on an ideological level. Owning an Apple product becomes part of that consumer’s identity. The consumer will defend that brand if they are taken care of. If a consumer identifies with a brand that deeply, that consumer is going to be loyal for life, as long as the company is still around and doesn’t do anything stupid or terrible. That is a powerful notion and essential in a competitive economy.

Now earlier I talked about how rapidly today’s marketplace landscape is changing. A brand will serve as a sort of anchorpoint for a changing company. A company’s product can change visually, or different features can come out or phase out of existence. A company could put out a completely different product altogether, or change the way it does business, but with that established brand, the consumer will continue to be loyal to the company, no matter what changes it goes through (as long as the company has been keeping up its side of the bargain and remaining true to its fundamental ideals of course!). With a brand, a company doesn’t have to start all over in marketing every time they change up their products.

Am I suggesting it is necessary to get as involved in building a brand as today’s business giants to survive in today’s economy? No of course not. However, it is important to understand the power of brands and why the big guys pay so much attention to them. Engaging in branding (whether committing to the full blown science or just creating a brand name to slap on a product) is one of the major tools a company can employ in adapting to and surviving in today’s economy. A brand is a way for a company to stand out in the crowded marketplace and gain loyal consumers.

In the last post of this series, I will go over the last two ways a company can survive in the new economy: innovate and slim down.

Flexible, Agile Businesses

In previous posts, I have beaten the notion of the necessity of change into the ground. So in this post, I am going to talk about it some more! However, this time I will relate it to survival in the new economy.

What characterizes our modern economy? Well, we are increasingly doing business on a global scale. The strongest companies in the US are growing and expanding their operations into other regions, such as Asia and Europe. Then, we see strong companies in regions such as Asia and Europe expand into our region and do business here. New competition is arising from different places in the world every day. With new competition, new ideas, and new innovations come changes in the market landscape and the way we do business. The changes we make in response to the changing market affect the market back and our competition as well and so this feedback mechanism continues back and forth.

But what’s the big deal? Hasn’t this always been the nature of competition? And hasn’t global commerce been around for a while?

To an extent, yes, global commerce has been around for quite some time, and we have seen these competitive behaviors since the dawn of competition. But what is different today is the extent of the global market and how fast information travels.

In the past, businesses were confined to the regions they did business in and traded goods worldwide. Now, businesses have a more pervasive presence worldwide, which affects respective economies and even cultures in a new way.

With the rapid information transfer that the internet allows, market activity has become faster and denser. Research can be done quicker and efforts can be coordinated instantly. What all of this results in is a highly volatile, ever-changing market to do business in. New innovations pop up all the time. Advances in technology change the market environment over night.

To survive, today’s businesses have to adapt to all of these changes and leverage the changing market conditions in order to attract more consumers and increase revenue. A changing market calls for changing businesses.

Businesses that are flexible are going to be the businesses that can change when the market takes a sudden turn. Flexible businesses have plans for reorganization. They also encourage employees to innovate and try new things whenever possible. They make change their policy.

I’ve talked about this before, but building with modular construction allows a business to have change-ready facilities. If a business needs a new workspace to begin working on smart phone applications, or a new computer room for social media marketing experts, that business will be able to expand upon their existing facilities without necessitating disruptive construction. New technologies require new workspaces to produce the latest product on the market. A smart business has to be ready for whatever is around the corner so they can be among the first to take advantage of it.

In the next post, I’ll talk about the significance of the green movement in relation to the new economy and how smart businesses are getting on board.

The Overview

Today’s economy is a fast, rapidly changing, virtually unpredictable landscape to do business in. The market landscape is changing every day. New businesses spring up and old businesses close as market trends take off in new directions, seemingly without warning. New, unexpected sources of competition emerge, forcing competing companies to alter their strategies quickly and effectively.

With the advent of the Internet and continuing on today, substantial research can be done quickly. Companies can check up on their competition with ease and alter their business strategies accordingly. With a rapid exchange of information comes an increased rate of business activity and change. As the global market sees more and more activity and encompasses more and more countries, we see new sources of competition arising all over the globe; as if domestic competition wasn’t enough!

It lends credit to the phrase, “It’s like a jungle out there.” And to an extent, this phrase rings true. Analogous to the diversity of jungle life, we see a diverse assortment of businesses out there, all of them with different services, approaches, and (sometimes strange) personalities. But with diversity and healthy competition comes a brilliance and vibrancy of life. Just take a look at the Amazon. Though this new economy is sometimes unpredictable and at times crazy, I myself am optimistic about the resulting benefits it will provide.  

But the question persists: in the face of this new, global, fast economy, how does a business survive?  Well by adapting of course! A business can adapt by becoming stronger, more intelligent, and craftier in method. This is not easily done, of course.  

Our struggles to understand this strange new fast-track economy have been exacerbated by this seemingly endless recession we have been stuck in. Times are still tough! But they are also getting better. And though this recession has been hard on us all, I think it is also making us stronger: more lean, more efficient, more conscious of the market.

Add our current environmental crises to the mix and we can be seen to have a lot on our plate. But even though it has been a struggle, we are now more conscious of the environment than ever. Our hardships and worries have given us a greater awareness of the need to generate sustainable living…both on an ecological level and an economic level as well. Our hardships have proven to be bittersweet. I believe we will come out of this recession stronger than ever and able to build a better society in the future.

This article series will cover how businesses are adapting to the changing economy and how they are continuing to survive in this new, crazy marketplace.

In the next blog post, I will go over how successful businesses are becoming more flexible and change-friendly in order to keep up with changing market conditions.

I recently spent some time with one of our customers who were making a change to one of their facilities. I asked him how the people were handling the change. His response was like many I’ve heard in the past. He said, “I don’t understand why people don’t want to change. I can’t figure out if they are lazy or just scared of what will happen.”

My response was very simple: “People are reluctant to change is a result of their peer groups’ ability to change.” He looked at me with a blank stare. I went on to explain further.

When a company goes several years without changing, that is the expectation that every employee has. When a company is continually changing, then continual change becomes the norm. Their peer group around them all feels the same way when change has never happened at the company. In other companies such as Google®, Microsoft®, Apple® and thousands of others who change daily, weekly, monthly and annually, change is the expectation. Change is the way they do business. Continue reading…

Time is Money and with The Economy in Flux, Successful Businesses look at a Fast New Building Product to Stay In Front

As businesses change, so do their facility’s needs. In this day and age slowing down is simply not an option. Downsizing and expansion both require changes in physical space; prefabricated modular wall systems can accomplish both these tasks with minimal impact on productivity or workflow.

Businesses today must meet the changing business environment quickly and intelligently. Using prefabricated modular products can save companies tremendous amounts of time and money. The look of modular has become so streamlined that it is virtually indistinguishable from standard construction; however, the cost savings, non-intrusiveness, flexibility, and reduced environmental impact of modular truly makes it the best business solution on the market.

Standard stud and drywall construction causes enormous strain on companies looking to transform their workspace. “Many organizations overlook the productivity lost during a lengthy construction project; the cost of downtime can be staggering! Invasive drywall dust, sanding, and painting can become a thing of the past, although few companies have realized that prefabricated modular building systems are available and are a better solution” said Scott Nielsen, LEED Certified Operations Manager of Allied Modular.

Now, modular construction, which is pre-manufactured before arriving at a job site, eases the strain on companies looking to modify their facilities. Offices, lunchrooms, conference rooms, and a host of other applications can be completed in days instead of months, with very little impact on the operations of the organization and by purchasing prior to year end; you can maximize your tax benefits under http://www.section179.org/section_179_deduction.html [IRS tax law, section 179].

In addition to providing a non-intrusive and highest-quality business solution, prefabricated modular products offer myriad other advantages over standard construction. Modular products can be reused and relocated with very little effort or financial impact. Also, modular companies like Allied Modular Building Systems manufacture building solutions that are environmentally friendly using only recyclable materials and small installation crews, the carbon footprint on the environment is as minimal as the impact on your company’s productivity.