Regulation and business strategy: how to make the most of regulation | Articles

SMEs must constantly adapt in order to thrive, and this includes regulation. The European Union (EU), the main market for Swiss companies, is adopting increasingly detailed and complex regulations, and Switzerland is following this trend. Boards play a key role in supporting strategic thinking. To make the most of regulation, directors can establish a regulatory watch that analyses the regulations relevant to their business and identifies the challenges and opportunities they present.

Here are three lines of action to help you think strategically about regulation.

Strengthen your company’s compliance. Whether it’s consumer protection rules, e-commerce, data protection or competition law, SMEs need to equip themselves with the necessary resources to ensure a sufficient level of compliance. This is not only a matter of risk management, but also a way of demonstrating to customers that their interests and needs are being taken into account. For example, a non-compliant online sales site is often perceived by customers as untrustworthy. For digital projects in particular, regulatory requirements need to be considered from the specification stage. It is less costly to consider them at the design stage, but then they must be included in all subsequent revisions and audits.

Compliance can be used as a differentiator. Once a company’s activities have been assessed and brought into compliance, it can use compliance as a differentiator. Compliance with personal data or ESG (environmental, social and governance) criteria becomes an important asset that can be used to position the company more effectively in the marketplace. The cost of compliance is transformed into an opportunity to improve customer relationships, attract a more demanding clientele or even open up new markets and strengthen the brand.

Leverage Swiss and European regulations. Finally, regulation is not just an obstacle; it can also be an asset. Examples include using the new provisions of the Swiss Cartel Act on relative market power to obtain the same conditions for goods and services purchased abroad, or reminding European buyers of the maximum payment periods laid down in EU Directive 2011/7. Other European regulations in the digital economy (such as Regulations 2022/2065 and 2022/1925) or in the agri-food sector (Directive 2019/633) aim to remove barriers and rebalance power relations between SMEs and large technology companies or in the agri-food supply chain. SMEs can therefore seize the opportunity to benefit from these provisions and overcome the obstacles created by powerful business partners.

By following these three axes, the management and board of SMEs can integrate EU and Swiss regulation into their strategic discussions. This will make the challenges and opportunities of regulation accessible to SMEs.

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