How some companies profit from the slow economy
Ralf Haller
October 9th, 2009
On my way back from a business trip I read a good article in the Economist, “Some companies are finding opportunities in the recession”. They mention four types of ways how companies take advantage of the current downturn to come out even stronger afterwards:
- take advantage of bargain-basement prices to make acquisitions (PepsiCo bought two of their biggest bottling companies, paying $6 billion)
- invest heavily into innovation (Intel’s Craig Barrett “you can’t save your way out of a recession; you have to invest your way out”; P&G is doing its biggest expansion in the company history opening 19 new factories around the world and IBM is holding a series of “innovation jams” to find new innovation ideas)
- companies reposition themselves (Cisco is buying startups, moving into services and expanding its business portfolio away from a pure network hardware provider)
- and last, but not least, entire new companies are being formed, following in the footsteps of others that were also started during recessions, such as FedEx, CNN and Microsoft
Update: nice slide from Phil Kotler on this subject.