I hate to play around with this issue during this unfortunate time, but I’m part of the ‘What You See Is What You Write’ concept. Open the newspaper and every 10 out of 10 articles in the business section will have negative words about the economy being used.
So, ladies and gentlemen, we’ll now look into how companies can react to the state of this economic recession.
Involves acquisition of other organizations.
In this time, credit will be tight, so humongous spending like this would be very difficult to maneuver. So no, this strategy is useless.
Working the ass to penetrate the market more. Multiplying the sales of the same product to the same market.
Nay. With employees morale at the bottom, no one wants to do more of the same work.
Develop new product for the same market or new market for the same product.
Absurd. The investment to develop new product or entering new market will take years to start paying back. In this time, as jittery shareholders analyze companies' financial performance on a quarter-to-quarter basis, this idea of a strategy is nonsense.
Get involved in something new for the company.
Too risky. Company would not have the necessary experience to play around with new unrelated business…with their plummeting coffers. Dismissed.
Retrenchment / Divestiture / Liquidation
Shrink the size of the company either through lay-offs, partial sale of company or complete selloff.
The only group of strategies which will require less investments, provide quick return, remove excess baggage, lessen the responsibility, silent the internal pressure, all while delivering the effective message for employees to step up their effort.
The drawbacks? Well..with this strategy, more people will be out of work, the social well-being will deteriorate, the economy will worsen…but wait..those have got nothing to do with the company.
So yes. This is the only strategy that will work in the current state of economy. Well of course other strategies will work too, but with the squeeze companies get from the economy today, being greed is the only option feasible.
So retrench, lay-off, let-go, cut down, reduce, trim, bring down..whatever the word is- it’s not what the economy needs, but hey..if you care about other people, join a charity. Not a corporate company.