STRATEGY SESSIONS #22

LINKING MARKETS AND STRATEGY

by Dr. Steve Payne

Strategies such as “retrenchment” and “reinvention” take on greater relevance during recessionary periods such as Americans have faced in recent years.   Some research is required, though, to indicate which strategies better “fit” particular markets.  Some people choose contrarian approaches, for example in their investment strategies.  Contrarians go “against the grain” or contrary to typical strategies, such as buying when most people are selling (in expectation of changing market conditions).  Markets such as stocks and mutual funds, gold or other precious metals, and real estate all share at least one major strategic issue -- the question of when individuals should enter and when they should exit such markets. 

Career decisions that don’t reflect at least some concern for changing supply and demand characteristics in markets have much greater likelihood for disappointment.  Passion or enthusiasm for a particular career path is probably the greatest decision consideration, but that factor alone is often not enough.  I’ve known friends who really regretted their degree choices – even with a terminal or Ph.D. degree.  Some who chose in the past to get a Ph.D. in literature, for example, were disappointed at their career prospects upon completion of the degree.  Due to an excess supply of PhDs in that field, many encountered low starting salaries and opportunities limited to teaching a few classes in several community colleges that were many miles apart.  Because of  supply and demand characteristics in certain fields, such as engineering, college graduates can see extreme swings over three or four years in the number of jobs available and their starting salaries.  I was disappointed myself to see that the number and quality of entry-level positions were very low the year that I happened to complete my bachelor degree in engineering, while jobs were much more plentiful only a year and two earlier for those who graduated then.

Books are available at public libraries that focus on supply and demand projections for particular jobs that require either high-school or college degrees.  These projections for the future may not  be 100% accurate, but the projections do offer information that is much more likely to be true than mere speculation.  Knowledge about demand and supply in particular career or job markets can help you establish more grounded expectations for job search, which could be important in personally handling early failures.  This knowledge might also help you to develop a finer-tuned strategy that might be aimed at a particular segment or niche of a market and one that has somewhat better supply-demand characteristics.

Improved market-based information can be important for more than career or job searches.  I mentioned investment strategies earlier.  Financial investments might be aimed at higher education for children, retirement, etc.   Investment strategies could be shorter- or longer-term ones, or they could be integrative plans linking short-, intermediate-, and long-term decisions.  Short-term financial moves can have higher risks, particularly those who are “day traders” or those involved in commodity markets.   Longer-term investments, such as for retirement purposes when this is conducted at a fairly young age, usually have very different market considerations.  Factors such as the time value of money as well as the relative stability of returns in certain financial markets over long years of investment offer more security and predictability than commonly found in short-term investments.

Market-based considerations can even be a concern for some in personal relationship planning.  I remember an article in The New Yorker years ago that discussed using tools of strategic analysis for dating and marriage potentials.  There have also been articles written and debated about single women of a certain age and their declining prospects for finding suitable marriage partners.  Some of you have probably even heard the unfortunate expression “the meat market” used to describe going to nightclubs, pubs, or other places in hopes of meeting “Ms. or Mr. Right.”  On-line and commercial dating services exist as types of markets for dating and relationship or marriage potential, beyond the traditional ones of chance or friend referral.  This perspective of markets for finding relationships or marriages can certainly seem somewhat cold or impersonal, but knowledge of more and different places and ways to meet potential partners, no doubt, does increase the probability of one encountering more suitable candidates for personal relationships.  Romantic, intuitive, and emotional factors concerning dating and marriage prospects could at least be supplemented by a few more strategic and analytical concerns.