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Recovery Plan- A financial marketing perspective.

Thursday, July 9, 2009

Siddarth Dudheria

Banking Management
GMBA - Dec'08



The Americans have literally thrown the kitchen sink at the problem called recession. They have tried every possible way to combat the recession. The solution will take time to address the problem and this time can be used by the corporates to prepare plans for recovery post recession. There are three problems corporates have faced as a result of the recessionary environment.


1. Loss of customer confidence


2. Loss of image and brand


3. Loss of human resources i.e. employees


For any corporate to prepare a recovery plan post recession, the above three must be the top most priorities.


Loss of Customer Confidence:


The recession has seen many corporates lose the confidence of their customers. One of the key reasons behind this is the inability of corporate to show survival skills. WoolWorths, UK is a very pertinent example in this context. The retailer was one of the most exclusive retailers in London’s High Street and remained the same till this period of uncertainty hit them hard.


Corporates must strengthen their core values and survival skills post recession to brace for a similar situation. Corporates must strip the non essential components of their business and stay lean. They must transform themselves into lean (not mean) fighting machines. By stripping non essential components, they must focus on their core competence and try delivering a confident customer experience.


Loss of image and brand


This recession has seen several big corporate with successful track record go under the belly. Several of these corporate have paid the price for being non transparent and over ambitious. They entered many businesses that made all logics disappear. Merril Lynch graduated from being an underwriter in CDO’s to becoming an investor and player in the same market. Merril was seduced by the gains that other players were making in the CDO trading space and chose to enter it. Little did it know that this decision would cost them their independence and loss of face, image and brand.


Corporates must now prepare a leadership team that is capable of not getting seduced by short term gains that will potentially risk their existence. Corporates must also rein in executive compensation and show the consumer / customer that they are a responsible company in all aspects.


A 360 degree marketing campaign highlighting the sustainability and responsibility to the soceity must be undertaken to restore loss of image and brand among customers.


Loss of employees


One of the most disturbing outcomes of this recession has been the way employees have been treated. Most of the Corporates in distress have shown no mercy for employees, firing thousands of them at will. This measure will save the corporate precious money in the short term but will sow the seeds of future doom.


Corporates seem to have forgotten that a satisfied employee can lead to higher productivity, drive margins upwards and thus result in higher stock prices. Post recession, corporates must devise an empathetic approach towards employees. The leadership must treat them as equal partners rather than as subordinates.


The post recession recovery plan must include the following


1. Following core competence to the last letter and exiting business that do not fit the core values.


2. Focusing on the brand/image and using marketing as a mode of continuous communication with clients/customers.


3. Treating employees as peers rather than paid subordinates.


4. Scenario Planning- Corporates must invest a lot of time and money to come up with best and worst possible business environments and test their responses to the same.


These are the key components of any post recession recovery plan. Recessions are violent but the will to survive and fight has to be stronger.

2 comments:

tostocktrading July 10, 2009 at 12:18 AM  

HI,

Nice post whole material was informative

Regards,
htttp://www.2stocktrading.com

StollepeCek August 5, 2009 at 4:05 AM  

Where can I fish round here?
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