Recession: a time for re-invention
Here’s a great article I read which talks about branding and business growth in times of economic recession…
You probably smiled the first time you heard someone say, “Flat is the new up,” and maybe even laughed when someone else replied, “Down is the new flat.” But the reality is that in a recession —when most businesses are either stalled or declining—growth can seem unattainable. But for smart companies, recessions have also proven to be periods of rich reinvention.
Here are a few insights from Rick Wise, Lippincott CEO and author of How to Grow When Markets Don’t (Warner Books):
Q. What’s wrong with the way most companies pursue growth?
A. Many companies compete in markets that are totally saturated, and focus on increasingly challenging traditional growth areas: Acquisition, international expansion, the occasional blockbuster, or specialized brand extensions. It’s hard to find meaningful growth with such moves in mature and flat-to-declining markets.
Q. How can recession help?
A. Besides shaking out the weakest players, downturns serve the valuable function of forcing companies to admit that their usual growth avenues are exhausted. Management talks a lot about hunkering down, sticking to their knitting or getting back to basics. But the core business is usually a slow or no-growth one. The sooner management admits they’re stuck in a no-growth model, the quicker they can move on to new strategies.
Q. So where can they find smart growth?
A. It takes a Darwinian leap, and the decision to push past product-centric models. People have to start looking for the next generation of customer demand, the higher-order needs that you and your competitors aren’t meeting but that represent opportunities to create new value in adjacent markets. What are the time-hassle economics that your customers face, and what new services or products would help?
Our client Walmart is a great example. It’s applied its core strength—low prices—into new categories and services, like groceries, pharmacy, and financial services. But it’s also adapted that value message to new formats. Its new Marketside, for instance, is a smaller store designed to cater to fill-in shopping trips poorly served by large Walmart Supercenters. It broadens the customer base and the market opportunity by bringing its core competency of providing great value to helping families answer the pressing question: “What’s for dinner?”
Q. What’s the most important quality for growth when your competitors are shrinking?
A. Rethinking the cultural definition of risk diversification. This is the time to be expansive—sticking to your knitting can be very dangerous when markets become so volatile. You can’t wait for the sunny day. You need to take measured moves to expand the scope of your business—and strengthen your customer relationships—now, when business is tough.
– Rick Wise, Lippincott CEO
Yours in design,
Janet-eratops
