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Recessional Preparedness
25 Feb 2015 | No Comments

According to Wikipedia “recession is a business cycle contraction. It is a general slowdown in economic activity. Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise” (http://en.wikipedia.org/wiki/Recession)
The quick fix is easy.  The economy worsens and customer confidence plummets.  Monthly sales begin to decline; fewer customers respond to the direct mail shot or visit the shops. The word goes out after the latest board meeting.  All functional budgets are to be cut by 10% as a strategic response to the economic crisis.  But does it work?  Or should a business take a much more strategic approach to cost management?
During a recession period, all companies must be mindful of expenditure and review/revise budgets that are currently in effect. These budgets can be cut, adjusted or redirected to another department. The trick is not necessarily to cut costs, but to optimize costs and create innovative methods to maintain their revenue. These methods can include:
•    Marketing research & development – Review and monitor your consumer/client behavioral patterns during the recession and plan cost effective marketing strategies that will penetrate new or existing markets.
•    Employee and Department Management – Review employee structure and identify if all employees are in the right positions and departments are operating in the most cost effective way.
•    Business Structure – There may be an option of outsourcing services from another company for any particular services such IT, Payroll, Transport etc. that can be initiated and eliminate headache and even cut costs. This can also ensure that the business can concentrate on penetrating a plummeting consumer mind set which has proven to be very demanding.
When planning marketing and research it must be kept in mind that a recession is usually followed by a boom and all marketing efforts should be made with a “long term mentality”.

Important Links:

1) Global Outsourcing
2) Online Consultancy

 


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