What Business Is Thriving In This Economy

What Business Is Thriving In This Economy – Summary. Even in the most severe economic crisis and recession, some companies can find an opportunity. Over the past four recessions, 14% of large companies have increased both their sales growth and their EBIT margin. A shock such as the Covid-19 pandemic can cause lasting changes in consumer behaviour. To survive and thrive in a crisis, start by studying how people spend time and money. Challenge conventional thinking and use data to find anomalies and surprises. Then adjust your business model to reflect changing behaviour, consider what new trends mean for how you create and deliver value, who you need to work with and who your customers are. Finally, put your money where the analysis takes you and be ready to make more compelling, persuasive statements.

Even in the most severe economic crisis and recession, some companies can find an opportunity. In the last four recessions, 14% of companies have increased both their sales growth and their EBIT margin.

What Business Is Thriving In This Economy

What Business Is Thriving In This Economy

A shock like the Covid-19 pandemic can lead to lasting changes in behavior and these companies are quick to see the changes, adjust their practices, business models that reflect, and are not afraid to make investments.

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Analyze changes in the way people spend time and money and the impact on businesses. Then see what the changes mean for the way you create and deliver value, who you need to work with and who your customers are. Finally, be prepared to put your money where the research takes you.

It will take some time before we understand the full impact of the Covid-19 pandemic. But the history of these shocks tells us two things. First, even in severe economic downturns and failures, some companies can find an opportunity. Among the major companies that have done business in the past four recessions, sales growth and EBIT margin increased by 14%.

Second, disturbances are not only mainly temporary changes (usually short-term changes in demand), but also some permanent changes. For example, the 9/11 terrorist attacks caused only a temporary decrease in air traffic, but they led to a permanent change in corporate attitudes toward international trade, privacy, and security, resulting in higher levels of research and surveillance. Similarly, the SARS outbreak in China in 2003 is often credited with accelerating a fundamental shift in e-commerce, paving the way for the rise of Alibaba and other digital giants.

In the following pages, we will discuss how companies can reassess their growth opportunities in the new normal, restructure their business models to better realize these opportunities and improve the economy.

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The Covid-19 pandemic has greatly disrupted global consumption, forcing (and allowing) people to unlearn old habits and adopt new ones. A study on habit formation suggests that the average time for a new habit to form is 66 days, with a minimum of 21 days. At the time of writing, the lockdown in many countries is already long enough to completely change the habits that were the basis of demand and supply.

Companies trying to emerge from the crisis in a stronger position must develop a systematic understanding of the changes. For many companies, a new process is needed to track and analyze changes before everyone notices them. The first step is to analyze the impact of the trends to identify specific product or business opportunities that may arise or contract outcomes. Think about how the disease made people stay at home. The impacts include increased home office remodeling, increased demand for products ranging from paint to printers. Unless we are aware of new trends and their indirect effects, we will fail to see weak signals and miss opportunities to shape the market.

The next step is to classify the changes in demand using a simple 2 × 2 matrix, based on whether they appear to be short-term or long-term and whether they predate the problems or whether they have occurred since the beginning. The four signs are classified as dynamic (temporary deviation from current trends), disconnection (temporary new situation), dynamic (acceleration of existing systems) and innovation (continuous innovation). Consider the changing behavior to “living in the best house”, which has had a profound effect on sales. The question is, Will the change from online stores be temporary, or will it be a fundamental change with ripple effects in other areas, such as commercial property?

What Business Is Thriving In This Economy

We place sales in the premium category. The disease increases and accelerates the existing situation instead of creating something new; people switched to e-commerce before the shutdown. But the change is planned rather than temporary, due to the size and length of the activation key, together with the normal performance of the channel, it indicates that most of the sales will not be known Customers do not need to change. So retailers need to adapt their plans to the new norm. In fact, before the shutdown, many retailers responded to the digital revolution by redefining the purpose of the physical store, often by rethinking shopping as a non-functional activity, but it is a nice social experience.

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This framework can then be used to decide which practices to follow and which to be more aggressive. Companies cannot pursue all opportunities and should not attempt to. To get an idea of ​​which things will go back, ask yourself if the change in demand is temporary or permanent. Many of the rapid changes observed in the response to Covid-19 were due to fear of infection or compliance with official instructions, and therefore appear to be temporary. But others were with more convenience or better finances, so they stick around more.

Any analysis of growth opportunities should be more than a simple summary of what you already know. You should challenge your assumptions about what is happening in your traditional business by carefully examining the data. This is why you need to explore the oddities and surprises.

Information often appears with relative (revealing patterns hidden by average upper lines) and higher bars (allowing for more detailed sampling). shown to be recognized immediately). As behavior changes during the Covid-19 pandemic, for example, rich sources include information on foot traffic and credit card spending. An analysis showed that the recent decline in cinema attendance occurred before cinemas closed in the US. This, along with the current trend of declining participation, suggested that the change was consumer-driven and that it might continue if there is nothing new. Attendance at live sports, on the other hand, fell only when concerts were officially cancelled, indicating a sharp decline.

In the military, one technique for finding out what you don’t know is to use the “eyes of the enemy”. The army commanders asked themselves: What is it that the enemy notices? then modify their own ideas to illuminate blind spots and other perspectives. The same can be applied to business people and competitors: Who succeeds? Which market segments are your competitors targeting? What products or services do they market? The same principle can be extended to consumers: Where do new behaviors emerge? Who remained faithful? What new needs do customers have, and what are they listening to? It can also be applied to countries: What patterns emerged in China, where illness and recovery were earlier than in Western countries? Ask in your own organization: What workplace innovations are being implemented at leading companies? What new needs are employees responding to? What opportunities do they represent that can be developed and spread more widely?

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Armed with an understanding of where your opportunities lie, you can now move on to the next step: tailoring your business model to capture .

Your new business model will be shaped by the changes in demand and supply necessary for your business. Many manufacturing companies, for example, will be greatly affected by the scheme and may remain shocked worldwide as a result of the disease. With major markets like the US building barriers, for example, many companies will need to overhaul key areas of the supply chain – from R&D down to assembly.

To determine what business model the new normal requires, you need to ask some basic questions about how you create and deliver value, who you are with, and who you are as a customer. For example, let’s look at how retail is adapting to the changing needs of digital.

What Business Is Thriving In This Economy

The value that most retailers provide to customers often comes from the quality of their in-store service. Consider the Chinese cosmetics company Lin Qingxuan. It suffered a 90% drop in retail sales after the pandemic, as many locations were forced to close and others saw a drop in traffic. In response, the company created a plan for digital communication with customers to change the store experience: It turned the beauty consulting company into an online store. The success of this activity has inspired many investments in digital channels. Thank you

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