Two scenarios for a new normal: the Big Tent or the Sharkpool
Post-COVID reality for fuel and fleet markets is going to look profoundly different. But how
One thing is for certain: the b2b fuel payments and fleet mobility sectors won’t be going back to the way they were before. The players in our market have all told us over and over again, using the tired old cliché, that they have been operating in a “fiercely competitive market”. Right….
This is, of course, nonsense: fuel and fleet management doesn’t look too much different now from the way it did three decades ago. Still driven by uber-conservative oil majors and sluggish automotive OEMS, technological innovation is snail-paced. Even the new kids on the block have been more interested in deploying industry-standard packages (yawn) than pushing the boundaries of functional road-mapping.
So is it all about to change?
There may be an appetite in some of the less progressive corners of the market for everything to go back to normal – for things to go back to how they were. Perhaps this impulse is driven by fear of change, perhaps it’s complacency, perhaps strategic laziness. Still, while there will be organisations more and less affected by COVID19, the virus will be not be crowning its own winners and losers (no pun intended): instead, growth or decline, maybe even success or failure, is going to be determined by a firm’s attitude and response towards changemore than anything else.
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So will it be the Sharkpool or the Big Tent?
If we think “back to normal” as a strategy is cowardly, lazy, visionless or complacent (and there’s an argument to say it’s all four of those) – then what sort of strategic thinking will build future foundations on granite rather than jelly?
We think there are two scenarios equally likely to play out in fuel and fleet. The Sharkpool and The Big Tent. Organisations should be assessing each scenario and, depending on strategic fit with their own objectives and capabilities, preparing marketing strategies and investment cases to deliver growth through one, the other or both. In a nutshell, these are the scenarios…..
The Sharkpool
Logic: a number of players in the market are severely negatively impacted by COVID. Multiples lower for the potential acquisition of attractive customer portfolios and strong assets. Consolidation results from aggressive investment as private equity mops up, and the strong absorb the weak. Potential for highly aggressive pricing in some segments as dominant players seek to buy market share.
Implication: a frank assessment of COVID impact, recovery dynamics (time/cost), repositioning and growth capacity. Overhaul and refresh of marketing mix, plus outward look at potential targets for investment and acquisition.
CFS is capable to accelerate your Business!
The Big Tent
Logic: widespread negative impact across fuel and fleet sectors affects ability to recover and maintain existing business structures/processes or develop new business. Most players looking to streamline operations, slim down asset base, reduce operating costs and outsource non-core business functions.
Implication: significant re-engineering of sales and marketing channels and ruthless segment selectiveness. A new openness to strategic alliances and joint ventures, alongside a decrease in protectionism of customer and data ownership. An outsourcing of processing platforms to specialist providers, and a collaborative approach to technological innovation. Widespread opening-up of major networks to independent mobile payment apps and general liberation of acceptance structures.
So which way will it go? And which way will you go?
Will it be the Sharkpool or the Big Tent? Or will “the new normal” combine elements of both scenarios?
Whichever variant it is, it’s time to think it through and nail down a clear strategic plan. Do nothing, and you’ll be in the killing fields – the third scenario we thought it best to leave you with at the end.
If CFS can help you think through, build and implement a post-COVID strategy and shape your business up for the new normal, then get in touch. Our expert practitioners across Europe can support you. Just visit our website at www.cfs-europe.cc or contact us directly via email on office@cfs-europe.cc
You’ll be glad you did.
