Strategising your way through the recession
Global recession storm clouds are gathering fast on the horizon. Is it all doom and gloom or can smart strategies keep your business focused on the silver lining?
There seems little doubt that a recession is on its way – whether that’s a self-fulfilling, fear-fuelled media prediction or simply the downturn we have to have, boardrooms are abuzz with what-ifs and what-nexts.
Australian consumer confidence is certainly falling. The September 2008 Sensis® Consumer Report found a net balance of 32% of Australians reporting confidence in their financial prospects for the coming year – the lowest recorded since this report began in 2004.
The August 2008 Sensis® Business Index found only 25% of SME operators felt confident about their business prospects for the year ahead, a fall of 8% from last quarter.
In some sectors, business is already slowing. Many new businesses are feeling the crunch of competition for the first time.
So is the answer to bunker down, consolidate and be conservative about spending? Or do you be brave and see the downturn as an opportunity to optimise your outcomes with some smart thinking and strategies?
BRW has just published its latest “Fast 100” list of Australia’s fastest growing businesses. When asked about their biggest business issues for the upcoming year, 43% of the list cited slowing economic conditions - a clear indication of increasing concern around the global financial crisis. Yet, BRW characterises the Fast 100 entrepreneurs as “extremely confident about their futures” and “still hungry for growth”.
So how do these high-achievers plan to weather the slowdown? Not surprisingly, 70% said they would market more aggressively. No bunkering down for this savvy lot … it’s about getting out there, reaching markets, building brands and being strongly competitive.
Many experts view a recession as a Darwinian-style natural purge of the weakest players, where businesses built on flimsy foundations are more likely to come undone and be culled (or simply hoist the white flag).
As renowned businessman Warren Buffet famously put it, “Only when the tide goes out do you discover who's been swimming naked.”
“Slowing demand exposes all businesses to new challenges, testing capacity to compete and perform,” says DDG’s Managing Director, Jonathan Roberts. “The ones that survive are those built on comprehensive strategies that align to business objectives … where financials, communications, operations and brand are all driven against a central plan and understanding of the marketplace.”
There is a lot of hype around about types of businesses most likely to thrive or survive – the “recession-busters”. From accountants and lawyers to IT providers, beer brewers, fast-food franchises and cosmetics companies. Good news for those of us in those sectors, but how can you strengthen your existing business to weather the economic twister?
“History shows us that the businesses that survive best through bust (and boom) are those with powerful brands,” says Jonathan. “They offer consumers the certainty they seek in unpredictable times. Businesses that operate with confidence and optimism are also attractive to consumers. That means being visible, being proactive about marketing and communications and devising intelligent strategies.”
The big players are already implementing change. We’re seeing capitalist-driven messages replaced with advertising that better reflects changing consumer sentiment. Just a short time ago financial services marketing seemed to burst with images of self-funded retirees enjoying big-ticket luxury holidays. Now we see them safe, secure, at home with their favourite pets. Supermarkets are telling us how to put together budget meals and the simple pleasures of gardening, tree-change and domestic travel are being touted as the new black.
Like it or not, we live in interesting times, where only the fittest brands with the smartest strategists are likely to succeed.
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