Its in every news you watch, every news paper you read. The world is facing an economic downturn. Its genesis its generally agreed was in the USA sub prime mortgage lending debacle. Its effects is being felt just about everywhere. The world being a global market, everyone trades with everyone directly or indirectly, so even you and I will not escape the effects of this crisis.
As I ponder these developments, I keep wondering what products/companies will go under and which ones will thrive in spite of/because of the prevailing circumstances. Generally luxury products that were more increasingly finding their way into the hands of the rich and hitherto swelling middle-class will suffer a decline. We have already started seeing some of the big boys on the local scene beating a retreat. Zain Kenya has laid off more than 141 members of staff and talk of similar downsizing by EABL is rife. Are we likely to see strategic changes by companies driven by changing consumer behaviour? Time will tell
There are many questions but few answers. One thing is certain though, companies that put value ahead of sales will remain relevant and profitable. Obviously profitability is proportional to sales, however sales will only be secured by products that provide value to clients. So how valuable is your product/service to your customers? Will they substitute it with a cheaper product? Will they forfeit it in favour of a more essential product?
Parting shot: Be innovative, think value and beat the recession!
This morning I bumped on the book MARGIN by a certain Dr. Swenson. In the first chapter this author laments the "unexpected pain of progress" inspite of the unpredcedented affluence, education, entertainment & technology bequethed on this generation.
ReplyDeleteIts utterly preposterous that what is now being liken to the 'Great Depression' is actually the handiwork of the world's great Superpower!!