Making headways in a slowing economy is very difficult but one can always get into things like reorganisation of the company, streamlining delivery models, reducing expenditure etc that will benefit the company in the immediate and long-run as the market picks up eventually.
Increasing efficiency
A downturn is all about investing in the future. If one does not recognise this opportunity to improve processes, the company may not find a way later on.
Organisations progress in growth, at the same time it should keep the expenses at their minimum level. In the period of downturn, if a company can come up with a product and/or service that will attract good business even in the dull period (through some novel business/managerial process )- that will pave the way forward for the company.
The company should revise targets, rethink strategy, dynamically set parameters for review, minimise costs, reduce borrowing, recover pending dues, become wary of delays in financial or all other receivables, look to maintain liquidity, set aside vanity projects, reduce lending/credit and take all possible measures to maintain solvency.
Cost-cutting should not be in haste, rather well thought; implemented with surgical precision- major areas that are streamlined are marketing, headcount and even product development.
Product or services on offer should always be improved and developed because no matter what of a particular product/service is providing tremendous value for money or quality par excellence, people will buy even in a downturn. Ex- Apple’s iPhone was launched in the wake of the economic crisis of 2008-2009.
Pricing is key to generating revenue. In a downturn, pricing has to be maintained at a functional level by measures such as offering free complimentary products to clear the inventory etc or by cutting down production costs or the production itself ( as done by many automobile manufacturers).
Acquisition of a business that is finding it hard during the downturn may be effective given that as the market picks up later on – the particular business gives high returns. However, the success of the acquisition depends on the evaluation of the circumstances by all stakeholders in the deal otherwise it could be damaging or lopsided.
” Every downturn produces new winners and losers. Those Who try to wait out the storm are usually disappointed. The future belongs to those who create it.” – Sanjay Kirloskar, President AIMA .