The art of companies being nimbler to survive tough times

Growth can result in a stronger position in the market. With a large market share, the company may gain more bargaining power with suppliers, which will eventually benefit the company’s performance. 
Unfortunately, in the past few years, the world economy has not been growing as expected and each country has to encounter its own challenges with different issues. The economic slowdown has caused many companies to adapt in order to survive in this tough time.
Instead of looking at how to grow the company bigger, many companies have had to scale down so they are leaner and strong enough to continue operations. With sales dramatically dropping, the gross-profit margin becomes lower until it may not be able to cover the operating costs. This is a crucial time, when a company must reorganise and streamline its operations in response to its shrinking market share. 
To achieve the target, management has to come up with a well-planned course of actions consisting of all aspects of the business and its current status. Some of the areas to be considered are:
People. The productivity of staff needs to be reviewed, taking into account the current business situation. Reducing staff may be an option. This should be followed by an action plan that is sound enough to be implemented.
Process. Processes and procedures have to be reviewed from inside-out and outside-in viewpoints. Certain functions may be outsourced so that some important changes can be made. Redesigning of the workflow though automation is an area for cost savings. 
Place. Sales distribution channels should be reviewed, improved or eliminated depending on each performance. Some under-performing units may deserve a period of close monitor-ing before a final decision can be made.
Product. When certain products are non-competitive or inefficient, they may need to be discontinued.
Price. The pricing strategy is important in competing successfully in the market. There is always debate when management has to trade-off between product positioning and fierce price competition in the market that results in the loss of market share. 
The success of a company’s transition to be more nimble depends on the leader’s decisiveness and the time constraint. In many cases, the action plan has been properly crafted by the management but is not implemented quick enough and it is too late to turn around the company. The speed of action is a crucial part in making the company stronger in a tough time. Management needs more discipline in several areas. Without moving quickly, the |chances of a company surviving can be slim. 

Dr Yanyong Thammatucharee is senior vice president /finance and accounting at Central Marketing Group. He can be reached at |[email protected]