Theyear 2009 was the year of learning for the Indian Industry. In the face ofrecession and economic uncertainties, organizations throughout their valuechain focused on reviewing their priorities and business strategies. Theyinstilled efficiencies and fortified their strengths to prepare for the year2010. Acting rationally, many companies judiciously applied modern managementstrategies to old business to stir through the crisis. It was the survival ofthe fittest, and companies which acted smoothly, braving all odds, are nowincorporating what they learned from the crisis to ascertain a sustainablegrowth in near future.
Takinglessons from recession, industries are now started looking at ways to diversifyinto newer spaces of products, adopting new technologies and improved businessstrategies. The industries feel that high demand areas like automotives,electronics, consumer electronics, LEDs and renewable energy, low pricedproducts in clothing are the drivers helping the industry in recovering fromthe recession and sustaining in market even after recession is over. Eventhough the demand is still distinctly below the 2007-08 level, they see theindustry growing in 2010.
Addingnew products to existing business portfolio: The sales dropped during recession considerably, but the industrialsector has surely improved since then and is now leading the way to recovery.The crisis compelled industries to the most fundamental aspect of business moving from valuations to value creation. Many of the industries were forced todiversify into new markets.
Addingbetter marketing practices: Thenew approach of customer delight services has adopted as part of their newmarketing strategy. The services like additional warranty on products/services,on site service, on road assistance or telephonic support, loyalty bonus,keeping service level a notch higher than competitors are some of theadditional steps that the companies are taking to reach customers. They areaggressively marketing their products and trying to reach customers by allpossible means like exhibitions, advertising, personal demo etc.
Focuson higher ROI and lower TCO: Therecession has also reinforced the idea that customers are not just looking forquality and solutions, but also at higher returns on investment (ROI) and totalcost of ownership (TCO). Now industries are trying to provide products andservices that can help customers in lowering their potential risk andincreasing their potential reward. The industries are implementing bestmanagement practices and providing more cost effective reliable products thatensure productivity gains for customers.
Adapting to fastchanging technology: The recessiontaught companies the importance of being customer centric, nimble and adaptiveto fast changing technology and business concepts. Overall the market performedbetter than expected in 2009.
Market
Analysis: Many organizations get
the opportunity to consolidate and build business around consumer, manufacturer
and small and medium enterprise segments. The key to their recovery and growth
will depend on their focus on quality add-ons and understanding about the
customer needs.
Cost cutting tactics: The immediate steps taken by many industries are use of video/teleconferencing, lowering foreign trips for their employees traveling in lower class railways/flights, holding /postponing promotions and increments of employees, sorting out poor performers and removing from organization, lowering of working capital by lowering inventory with focus on delivery of goods, curtailing all investment plans, increase in outsourcing at low cost, hiring employees on contract basis rather than recruiting salaried employees to meet temporary demand of man power etc.
Market
penetration: Due to slow down,
many companies had curtailed their expansion plans/ up gradation of technology,
but now they are gearing up to invest in developing new markets.
Shifting
from Low Volume/High Profit to High Volume /Low Profit products: This is one of major and important paradigm shift
globally during recession and it opened eyes many of the industries. Many of
the leading industries those were earlier producing low volume high profit, now
started learning manufacturing high volume low profit products to widen their
business in local as well as in international market because of lowering in
buying power of customers world wide. The customers also started cutting down
their expenses.
Taking
advantages of globalization: Many industries
not only learned / understand the concept of globalization, but also followed /
implemented in their business. Earlier globalization was also in existence but
in different way. The industrial revolution started at western countries,
gradually came to European countries, now shifted to Asian countries and next
favorable area will be Africa and already many industries have started
searching opportunities in Africa.
Shift
in Industrial hubs: During and
after recession, India & China have become major industrial hubs. Their
economy is improving day by day. In India, the industries whose domestic market
& after sales service is good, survive better.
Strategies to counter recession: Diversified product portfolio, Explore alternate markets for growth, Strengthen old customer relations, Keep in touch with existing clients, Reward existing customers with discounts/gifts, Bend your rules a little to accommodate smaller clients, Move from valuation to value creation, increase your level of service, Analyse market condition, Try to delight your customers with extra services, understand customer needs, Maintain low cost of working capital, Control internal expenses, Increase advertising budget, Concentrate on big orders, Most important is to have patience in managing the organization during the recession as recession is cyclic in nature and not permanent.
The author is Senior Manager & HOD at Spinning PV, Raymond Limited, Textile Division, Chhindwara, Madhya Pradesh.
Image Courtesy: cobbgop2008.com
Strategies to counter recession: Diversified product portfolio, Explore alternate markets for growth, Strengthen old customer relations, Keep in touch with existing clients, Reward existing customers with discounts/gifts, Bend your rules a little to accommodate smaller clients, Move from valuation to value creation, increase your level of service, Analyse market condition, Try to delight your customers with extra services, understand customer needs, Maintain low cost of working capital, Control internal expenses, Increase advertising budget, Concentrate on big orders, Most important is to have patience in managing the organization during the recession as recession is cyclic in nature and not permanent.
The author is Senior Manager & HOD at Spinning PV, Raymond Limited, Textile Division, Chhindwara, Madhya Pradesh.
Image Courtesy: cobbgop2008.com
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