Finance
What are your company strategies
in this new Economy?
T he Economic downturn is now a reality. With financial markets in turmoil and a daily stream of bad news,
from falling Profitability to company failures, the consensus view is now that we are in for an extended period
of economic pain that have a profound impact on both consumers and corporate. However times of change
create opportunities as well as threats. For some companies, survival will dominate the agenda; however for
others the downturn offers the chance to extend their lead over the competition.
A ripple effect, which started with the credit crunch, has been expanding. The global economic
environments has also changed dramatically since the re-engineering boom of the last 20 years and the wave
of outsourcing and off shoring that has dominated the last 10 years, have left companies leaner but less
flexible. Furthermore, some of the key assumptions on which many current business models were predicated
no longer hold true as low interest rates, cheap transport, consumer indifference and wage gap.
As a result, many companies are likely to find themselves with sub optimal business models, which will be
expensive and risky to change. It is not enough to understand what the effect of the downturn will be on
demand for your own products and services. It is equally important to understand what is happening to your
partners, customers and suppliers. A comprehensive risk analysis must look at all of these players, as their
fate can substantially influence your results different options for how to steer through and adapt to the
changing environment. Broadly, these Strategies can be grouped into three categories:
v Survival
v Repositioning
v Corporate Re-structuring
www.Venture-Care.com/Magazine
December 2017
5