Strategic savvy (company management during the recession)
Article Type: Abstracts From: Strategic Direction, Volume 25, Issue 11
Steidl P. In the Black (Australia), June 2009, Vol. 75 No. 9, Start page: 38, No. of pages: 4
Purpose – To describe how companies can adapt their strategy to cope with and benefit from recession. Design/methodology/approach – Warns that many companies experience difficulties because they ignore change in their operating environment or because they focus exclusively on day-to-day issues. Identifies survivors, exploiters and disrupters as three business categories,focused respectively on ongoing viability rather than risky new ventures;identifying opportunities and implement systems that use speed and flexibility to take on new challenges; and creating a new model to carry them beyond the recession. Presents two case studies showing how companies have achieved the transition from survival to alignment with the changing environment, managing and eventually benefiting from change. Describes how a telecommunications startup company (TheBuzz Corp) had to rethink its growth plans and undertake a painful restructure to ensure survival. States that it subsequently made radical changes in its marketing approach, replacing high fixed marketing expenditures with variable costs per new customer gained. Explains how Group M, the world’s largest media group, made the transition from exploiter in the second half of 2008, to disrupter during 2009. Highlights the importance of flexibility during a recession, particularly where the operating environment is changing rapidly and unpredictably. Advises executives to review long-term plans for change,cutting back on those with long lead times to free up resources for short- and medium-term initiatives and strategic developments with positive outcomes. Originality/value – Concludes that a recession can provide businesses with the opportunity for dramatic internal change to create a more competitive,differentiated business model. Article type: Case study ISSN: 0004-8631 Reference: 38AP821
Keywords: Change management, Corporate strategy, Recession
