Buffering the impact of an economic slowdown

In the country where the Asian financial crisis started in 1997, today’s economic slowdown can be considered the next high-impact one. 

This situation has caused some companies to leave the marketplace, while those remaining have to struggle tremendously for survival. 

What else can be done so that companies can pass this turbulent period, which no one can tell how long will take? 

The following are some measures that many companies have taken in response to the tough situation.

 

Belt-tightening – Cost control and cost reduction will be popular measures that most companies will have to include and ensure that they have been well understood by employees. 

The important thing is how to implement a measure that can give an impactful result rather than small savings. Management needs to think out of the box to come up with strong measures that can really help the company see improvements.

 

Extra income – This is the other side of the coin, when the company is trying to find additional revenue. This may come from the existing business or newly developed products or services that the company is familiar with. 

Normally this kind of initiative will take some time before really materialising. However, it is still worth considering and pursuing instead of doing nothing.

 

Staff morale enhancement – Surprisingly, companies that emphasise creating trust and nurturing the morale of employees can see a brighter future than those that mainly look at the bad results. 

Keeping existing people at a high level of morale through well communicated messages from the top and showing sympathy and providing encouragement can help the workforce keep moving no matter how difficult the situation might seem to be.

 

More in-depth analysis – By looking into more details regarding operating performance and finances, a company may see more room for improvement and react to the situation in a more effective manner. 

The company may focus more on understanding inventory, the sales mix, the channel of distribution. 

Once an area for improvement is identified, the company can come up with a proper strategy to deal with the challenge.

 

Close relationship with stakeholders – To fulfil requirements, sometimes a company needs to seek cooperation from external stakeholders such as suppliers. Any adjustment to the normal business process can be discussed and revised based on mutual benefits and the facts. This is another way to deal with the tough issues relating to the company’s performance.

It is important that we realise that uncertainties are waiting and can come to us faster than they did in the past. 

We just need to make ourselves ready to withstand the impact in a way that will not push us into an even worse situation. 

 

Yanyong Thammatucharee is the head of international finance and operations at Central Marketing Group. He can be reached [email protected].