Surviving in a Recession (or a Slowdown)

There are essentially three strategies to survive, and thrive, in a slowdown or recession (whichever term you prefer). They are:

• Take advantage of opportunities and “sell” your way through the economic challenge, hence positioning yourself for the inevitable upturn. This requires vision; a strong, committed management; a well-run business from an operational viewpoint; strong cash flow and access to capital.
• Focus on cost reduction and align your operational and cost structure with reduced revenues. This requires significant cost management; improving cash flow through DSO and inventory management; as well as potential employee right-sizing.
• Opportunistically “sell” your way through the slowdown while managing your expenses and cashflow.

A recent article in the Harvard Business Review entitled “How to Market in a Recession” highlighted some key initiatives you may want to consider if you plan on taking advantage of the economic slowdown to position yourself to thrive. They are:

1. Research your customer to understand their challenges
2. Identify what your customers value, and what they value in you
3. Maintain marketing spending (It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times)
4. Adjust product portfolios
5. Support distributors (if you are a manufacturer)
6. Adjust pricing tactics
7. Stress market share
8. Emphasize core company values to your employees and communicate internally

More detail can be found in the article.

Distribution, and for that matter electrical manufacturing, is a market share game. What are you doing to retain, and increase, your market share?

Not to be crass, but these are areas where we are already helping progressive distributors. If you need feel you could be doing better, perhaps we should talk. Contact us. David. Allen.