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Marketing Profit Hunt Series
A Recession is a Terrible Thing to Waste
"It was the best of times, it was the worst of
times, it was the age of wisdom, it was the age of foolishness, it
was the epoch of belief, it was the epoch of incredulity, it was the
season of Light, it was the season of Darkness, it was the spring of
hope, it was the winter of despair . . ." (Charles Dickens, A
Tale of Two Cities)
Charles Dickens wrote this in the mid-nineteenth century about a
different time, but he could have been writing about the
Since 1948, we have had nine recessions; the average contraction
lasts eleven months, and the average expansion is four years.
In separate studies of
leading U.S. industrial companies, McKinsey and Co. and Bain and Co.
found that successful players pressed their advantage and placed
counterintuitive bets that proved to be transformational to their
companies. In an
article in the McKinsey
Quarterly (Preparing for the Next Downturn - April 2007),
McKinsey’s analysis shows that in the last recession, 40 percent of
U.S. industrial companies toppled from the top quartile of their
industries; 24 percent moved from the bottom to the top quartile;
and 15 percent emerged as new industry leaders.
What causes the opportunities that are created by recessions?
1.
Competitors can’t see the
forest for the trees; they become so involved with their problems
that they can’t see a solution.
2.
Competitors retreat in
the market by cutting budgets and costs.
3.
Competitors without
sufficient cash reserves cannot out-spend you.
4.
Low priced competitors
depend on volume to survive, and it’s no longer there.
5.
Competitors in survival
mode, who retreat from marketing planning and real sales generation,
and who lose their focus on genuine customer satisfaction and
motivated employees, bite the dust.
The
companies that rise to the top will have done so
because they will have
seized this rare opportunity
to gain market
share while their competitors shrink back and lose ground. That’s
why I say, "A recession is a terrible thing to waste": it creates
opportunities for companies to behave in a strategically
counterintuitive manner and pull ahead of the herd.
Companies that take advantage of this opportunity can
emerge from this recession
stronger and better for the experience.
The most
important thing to keep in mind about tough times is that they pass,
and are replaced by good times.
Where some people see danger, others see opportunity.
Those who recognize and act on the opportunity are the ones
that prevail.
This article is fourth in the Marketing Profit Hunt series -
Surviving and prospering during the economic downturn.
About the Author: Ken Wilson: Strategist, marketing guru, educator, facilitator, author, university lecturer and consultant, he can be reached at ken@wmg-mn.com or 763-476-2216
Copyright ©2017 by Ken Wilson All rights reserved