Understanding the strategic impact

Download in itunes    Download to desktop
 
Read the transcript

Asking the right questions

At the start of 2008, a downturn in the main economies was identified by a majority of UK CEOs as a substantial threat to business growth. (Source: PwC global CEO survey). As the rising cost of essential household purchases forces changes in discretionary spending, recent media reports have suggested that consumers are already plundering their savings to sustain their current standard of living and if this is the case, the cuts in spending may come more swiftly and be far deeper than anticipated.

In a consumer led downturn, the first questions for any business to answer must be, “Are my products or services seen as discretionary purchases by my customers, or am I threatened because I supply other businesses in the discretionary sector?”  Regardless of where you believe your business to be today, to assess the possible impact of the downturn and to take advantage of opportunities that will arise, ask yourself some strategic questions:

How flexible is my business model – will it allow me to react quickly to a change in my business environment?

What is my long term financial position – how significant could a loss of revenue be?

Even if my product is of a non-discretionary type, could customers choose a cheaper option?

What are my competitors doing and are there opportunities for organic growth in my sector?

By proactively answering such questions, the very best businesses then develop a range of scenario based plans that define possible futures and plan for each individual eventuality. 

In the video above, Strategy Director Matthew Alabaster considers the three key areas that a business should consider when developing scenario based plans.

Click below to find out more about the challenges facing businesses when managing in a downturn:

• Finance and funding
• Operational capability
• Stakeholder support