Having completed a strategic review, RAMP has decided to focus on the development of its full member programme and has axed its associate membership scheme as a result.
I guess it’s inevitable that as new business becomes less abundant, firms will close ranks and protect their positions. It may not be nice for those ousted but it’s the only way to ensure the strong survive.
And survive they will. I’ve never subscribed to the theory that packagers’ days are numbered because they have shown they are capable of adapting to changing market conditions time after time.
John Rice, managing director of RAMP, says: “While the current market is undoubtedly challenging, it will also throw up many significant opportunities for RAMP and its members. I foresee mergers and alignments that we will be well placed to take advantage of.”
I suspect he is right. The market is tough and packagers must change, but change can bring opportunity and packagers have shown a great entrepreneurial spirit in the past that has enabled them to go from strength to strength. But the size of the challenge this time around should not be underestimated. Although some thought Mortgage Day signalled the beginning of the end for packagers, they showed they could operate effectively in a regulated market. But that was an environment where lenders were happy to work with packagers and pay a good price for market share.
Today the lending landscape is different and lenders are less willing to buy business at any cost. So packagers face the double whammy of less business and lower returns on the work they transact. This is a new business environment that will be tough for all and impossible for some. Rice’s prediction of mergers and alignments seems accurate and I suspect many packagers will have to rethink their business models.
If you look back at the history of British business, there is plenty of evidence of companies emerging from downturns fitter and stronger than before.
A turbulent economy forces firms to reconsider the business they are in and the businesses they want to embrace in the future.
In this light, I suspect packagers will spend less time looking for lender exclusives and more time negotiating added value and profitable deals with other types of product and service suppliers.