The companies we looked at, all increased growth and profitability during recessions or the following recovery periods because of the choices they made when times were toughest."
According to the research findings, companies should focus on core business to create opportunities to gain market share from competitors who diversify and split focus. They must be flexible and take fast action when executing recession strategies such as trimming costs through process efficiencies or correcting bad past decisions. Companies should shred non-core operations to improve liquidity and/or focus on the core strategy. Operating non-core business splits both focus and resources.
It is never too late to prepare for a downturn; companies should assemble a plan and put in place a strategy for dealing with adverse conditions well in advance. This could include formal scenario planning or careful structuring of the business to maximise resiliency.
Acquisitions and strategic alliances help strengthen, re-focus and position the company for increased growth and profitability. Prices are likely to be lower and there may be less competition for acquisition targets. Acquisitions can also help accelerate access to new markets, products, technologies, customers and talent.
The research pointed out the benefits of increased advertising and marketing to increase market share and take advantage of greater advertising reach, possibly at more competitive rates. It is also important to invest in research and development activities to create new value in core products and services to sway recessionary customers. New product releases can have greater impact in a downturn as competitors are slower to counter with a 'me-too' offering.
Gibson added, "Businesses should think cautiously in the short term but be ambitious and plan for the long term. There is no doubt that times are increasingly tough, but to survive, businesses have to look to the future."
About New Zealand Trade and Enterprise:
New Zealand Trade and Enterprise (NZTE) is the New Zealand government's national economic development agency. It works to stimulate economic growth by helping to boost export earnings, strengthen regional economies, and deliver economic development assistance to industries and individual businesses. Through its global network of offices NZTE works with international businesses and investors, connecting them to New Zealand business opportunities. NZTE's focus is on industries and sectors where New Zealand has a long-term competitive advantage on world markets, and on businesses with high-growth potential.
For further info please contact:
Lisa George
ASDA'A Burson-Marsteller
Dubai, UAE
Tel: 009714 3344550
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