Those successful companies in history have always been able to flexibly adjust their strategies according to changes in the market environment in a crisis, so as to overcome difficulties and grow stronger.
The spread of the financial turmoil has made life difficult for the former corporate giants. If an enterprise wants to survive and develop in a crisis, it can only wait and hesitate. But what should be done to survive the crisis? What strategic changes and adjustments do companies need to make?
The study found that those successful companies in history have always been able to flexibly innovate and adjust marketing in a crisis according to the market environment Strategies, for example, some companies develop strengths and avoid weaknesses in products, develop previously neglected markets, some focus on price adjustments to adjust brand and product positioning, and some companies focus on developing new marketing channels, etc.
Enterprises Surviving from Desperation Taking history as
a mirror and learning the survival methods of past enterprises to deal with crises is undoubtedly a shortcut. Let’s first look at a few companies that have changed during the crisis.
Ericsson—A two-pronged approach to cost control and slimming During the economic depression
in 2001, Ericsson, which had maintained high-speed growth for 10 consecutive years, stopped growing and even began to fall into losses. According to the 2001 financial report, its annual loss amounted to SEK 21.3 billion.
In the face of losses, Ericsson made timely adjustments. Ericsson has launched a “cost control plan” – to outsource peripheral businesses, discover new profit points, and join forces to refine and strengthen advantageous businesses. In 2001, Ericsson transferred the mobile phone production business to Flextronics OEM, and concentrated on the technical research and development, design, brand promotion and marketing of mobile phones. At the end of 2001, it formed a joint venture with SONY to develop and provide 2.5G and 3G terminal equipment to global users, and expanded the scope of service business to enter the fields of telecom network management, virtual space service, system integration service and so on. With the recovery of the global communication industry, Ericsson’s previous series of strategic adjustments have gradually shown results, and the company has steadily developed and improved, laying the foundation for today’s global market leader in the 3G field.
VW – Discover the market behind your competitors
During the economic depression in the 1980s, the U.S. consumer market was in a downturn again, and mass consumption tended to be more rational and pragmatic. General Motors, Ford, Chrysler, etc. have drastically reduced the advertising expenses of light passenger vehicles, and the entire auto industry is also immersed in the fantasy of a beautiful blueprint for energy-saving vehicles, and the light passenger vehicle market is particularly deserted.
Faced with such market conditions and consumption characteristics, Volkswagen has redeveloped the market segment of light passenger vehicles with the characteristics of economy and multiple passengers. They launched the new Routan minivan with a marketing budget larger than any other Volkswagen model in the US market at the time, and the price of this minivan was also very attractive-starting at only $2.4777, which was very attractive to car buyers. This strategy of Volkswagen just hit the soft underbelly of its competitors.
Hong Kong Apple——Internet Fast Sales
In June 1999, the Asian financial turmoil had not completely subsided, and when everyone in Hong Kong’s retail industry was in danger, a retail company named “Apple Fast Sales” was born, which quickly became popular in the market. A “fast-selling whirlwind” has severely impacted Hong Kong’s retail industry. The market entry strategy it adopts highlights the idea of speed (with 248 special trucks, 983 delivery and logistics personnel, 150 operators, 20 showrooms, 8 loan warehouses, and a network throughout Hong Kong) and highlights Two major selling points – “extraordinary price” and “door-to-door service”, enable customers to buy electrical appliances, stationery and even food products without leaving home. The “Apple Express Sales” series of fast-selling actions that seemed unconventional at the time brought it great success, and its turnover reached an average of 750,000 Hong Kong dollars per day from the very beginning. In contrast, its main competitors such as the powerful Wellcome Supermarket Group are shabby, with less than 100 trucks, 1 warehouse, and 18 operators. They can only compete with another retail giant, ParknShop Group. Hurry to deal with the newcomer in the retail industry of “Apple Express”.
Crisis Countermeasures
Through the study of the above three cases, we can clearly find that the common characteristics of the success of the three companies can be attributed to change and innovation. The following analyzes the way of survival in a crisis environment.
Abandon tasteless products and focus on core business
The business of an enterprise is generally not single, but mostly diversified. Of course, if the weather is good and the capital flow is smooth, you may be able to live in peace for the time being. However, once you encounter an economic downturn or a company encounters a crisis, such as the economic depression experienced by Ericsson, the capital flow will inevitably be in trouble. At the same time, the business area is spread too wide, and the coordination of multiple services is at a loss, and the business shrinks, and even ends the life cycle of the enterprise.
Everyone is familiar with the “Matale Law” which has a very important “28th financing rule”, that is, 80% of business income is created by 20% of enterprise projects. Therefore, enterprise managers should invest limited funds in The key projects that can really give full play to their own advantages are used to continuously optimize the investment of funds and improve the efficiency of fund use in order to better achieve corporate goals.
Therefore, in the harsh economic winter, shrinking the business scope of the enterprise, eliminating the drag on the enterprise from weak businesses, integrating enterprise resources, and focusing on core industries is a good way to survive the crisis. It’s like a person who is better at conserving heat than stretching his body in a cold wind. Just like what Ericsson has done, outsourcing even eliminates non-core businesses, so that resources such as human and material resources can be better concentrated on core resources, so that the core competitiveness of enterprises can be better preserved and developed, and ultimately reborn itself .
When the financial tsunami hit in 2008, Samsung Techwin, a subsidiary of the Samsung Group, also adopted this strategy. Because it does not have an advantage in the competition with Japanese manufacturers such as Nikon and Olympus, and the financial crisis has led to an expected decline in sales, its digital camera business is in a state of loss. Therefore, Samsung Techwin decided to split this business from the company’s business, and Samsung will establish a new company dedicated to the digital camera business. The integrated Samsung Techwin can concentrate more energy and resources on the main business – industrial equipment.
Control costs and low-end routes
In times of economic depression, cost control is the key to companies being able to withstand the pressure and survive the winter, because costs are related to the flexibility of corporate funds. In turbulent times, it is often those companies that can flexibly use funds (including cash flow and long-term and short-term liabilities) that have the last laugh. For example, Ericsson, during the period of economic turmoil, quickly responded to cost control and implemented the “cost control plan”, and finally turned around after three years of losses, and its market share has further improved compared to before the economic recession. For many companies with a relatively single product line, judging the situation and reducing the positioning of certain products in a timely manner is also an effective and market-compliant measure to control costs.
Because high-end products or brands not only require higher costs in manufacturing, but also need to pay a high price in maintaining these “nobles”, so the expenditure of such costs must be properly controlled by enterprises in times of economic downturn. In times of crisis, brand value can be fully developed and utilized. Opening the way with low-end products or low-end brands can not only seize the low-end market, but also effectively avoid the risk of loss of high-end mainstream products or brand value, which is a good medicine. For example, Apple, which has always adhered to the high-end line, cut the price of its iPod shuffle by 40% in December 2008 to kill the low-end market. This move also made Apple a typical example of controlling costs by reducing product positioning during the financial crisis.
As the old saying goes, “He who knows the current affairs is a brilliant man”. In the context of economic recession, enterprises must assess the situation and adjust their product positioning to adapt to market changes. Products that are out of the market will surely sleep forever in the cold economic night.
Develop Neglected Markets The
market is the petri dish for corporate profits. If an enterprise wants to survive, it must have good insight and foresight to market changes, and the market is changing rapidly, especially when the economy is in recession, it is even more elusive. Become “cold food”, some market segments that are considered to be gone or considered to be of low value at first may become the lifeline of the enterprise, so what the enterprise has to do is to discover and seize these previously ignored Life-saving straw. Philip Kotler defined such a market strategy as a filling strategy, that is, a company positions its products in a part of the market that has not been discovered or occupied by competitors.
Volkswagen, which is in crisis, has been unhappy in the North American market before, and it seems that it can’t get rid of the role of a loser in the face of the top three in Detroit. However, just as competitors were proudly promoting energy-saving vehicles, Volkswagen was keenly aware of the subtle changes brought about by the crisis to the market, and thus took decisive measures to seize the light passenger car market that competitors had neglected. In the North American market brought a turning point.
The current similar example is that international mobile phone giants such as Nokia and Samsung have begun to seize the rural market in China, but this market has been ignored by the giants before, and only some domestic brands wander in it. For China, although the income of farmers is not very high, the combined force of 900 million consumers should not be underestimated, especially in this period of economic turmoil, such a market potential is still very attractive. Therefore, it is not surprising that giants such as Nokia have a strategy of going to the countryside. Instead of competing head-to-head with competitors for the same shrinking or cooling market, it is better to see the right time and find a unique way to cultivate a neglected potential market.
Developing the “Internet Fast Selling” model
Although “Hong Kong Apple Fast Selling Company” eventually faded out of people’s sight due to various reasons, the online fast selling itself is of great reference value in today’s economic downturn.
Professor Lu Taihong once made such an analysis of consumers: according to whether they like to shop and whether they have time to shop, they are subdivided into four categories: like and have time, like but have no time, dislike but have time, dislike and have time time. Online fast selling is mainly aimed at the latter three types of target customer groups, especially the last type, which is easy to cultivate and become its loyal customers. At the same time, with the acceleration of people’s life rhythm, private leisure time is further compressed, so enjoying life more conveniently and efficiently has become a requirement that people urgently need to meet. And online fast sales can just take advantage of the convenience of the Internet to provide efficient and convenient direct sales services to meet the needs of busy people. In addition, because online fast sales greatly reduce the rent, logistics, maintenance and other costs of physical stores, it can benefit the people and at the same time ensure the company’s profits.
Changes in the general environment have also created new opportunities for “network fast sales”. After nearly ten years of development, online shopping is no longer a new thing back then, but has gradually become a part of many people’s lives. “Online fast sales” can just make up for the time and space barriers when people shop. In July 2008, for small and medium-sized enterprises in the B2B market, INTEL, Lenovo and Alibaba formed an e-commerce promotion alliance for small and medium-sized enterprises. Business-specific PC terminal. This is no longer a single computer, which integrates Alibaba’s one-click e-commerce platform building program for small and medium-sized enterprises, and through the cooperation between INTEL and Lenovo, it will provide uninterrupted remote online technical support, which is widely recognized by small and medium-sized enterprises praise. In addition, although traditional clothing companies such as Youngor and SAINT ANGELO are launching their own online direct sales stores, compared to the current situation of online direct sales in the clothing retail field in some European and American countries, there is room for development of the online direct sales market in my country’s clothing industry. Also very big.
The days of economic downturn may be a good time for “Internet fast selling” to become popular. But this is not to say that all enterprises should sell products through e-commerce websites such as Taobao, but should broaden their sales channels, establish their own network direct sales model, and strengthen service quality, and sell products through the “network fast sales” model. .
As an enterprise, like an individual, it does not have the privilege to choose the age of its birth and development. All it can do is to make its own life more comfortable and more adaptable to the development and changes of this society and the market through its own efforts. As long as the enterprise firmly grasps the core issues of marketing management, absorbs the experience and lessons of the predecessors, and adds its own efforts to explore and implement, it is believed that there will be a brilliant rainbow after the storm.
