Things are bat shit crazy. Businesses are going bananas.
but not brands like staples.
Before we talk about staples, let’s analyze the three different nature of strategies brands are using in an attempt to save their asses from recession.
1. Aggressive
2. Defensive
3. The right balance
-Sony being safe
In December 2008, playing-it-safe Sony cut 16000 jobs to feed their cost-reduction target of $2.6 Billion. Furthermore, they delayed a much-needed investment in building a LED factory as well. This mirrored their 2000 recession approach too.
Was it worth it?
Today Sony finds itself outgunned by brands like Microsoft, Samsung, and Apple.
-HP Turned up the heat
During the 2000 recession, American info-tech giant HP turned up the heat by buying Compaq for freaking 25 billion dollars not to mention, the $200 million dollar brand campaign launch.
Happy ending?
Trust me, I would have loved to say yes but HP’s competitors Dell and IBM rode the high tide out of recession but bro HP got balls, ill give them that.
-Combining aggressive and defensive.
Staples got it right. During a recession, it’s important to cut down costs. Staples did so too but smartly- by closing down its underperforming facilities. (defensive)
Secondly, it introduced high-end products and services to stay innovative and increased its workforce by 10% to support it. (offensive)
Lastly, they took care of their existing customers “because the customers remember when they are not treated well”(retention)
Results?
Its sales doubled, from $7.1 billion in 1997 to $14.6 billion in 2003
Staple’s CEO, Ron Sargent’s 3 step recession plan:
“During the worst recession of our lifetime, we had a three-step recession plan: The first step was to take great care of customers because they remember when they are not treated well. The second step was to hunker down on expenses, which all good companies do in a recession. The third point was to invest for the future,” Sargent says. “That is how we got through the last recession very well, and I think it is true of this one.”
Conclusion:
According to the Holy Harvard Business Review:
“The CEOs of pragmatic companies recognize that cost cutting is necessary to survive a recession, that investment is equally essential to spur growth, and that they must manage both at the same time if their companies are to emerge as postrecession leaders”
This equally essential growth investment isn’t gonna be an impulsive guessing game.
“Progressive companies stay closely connected to customer needs — a powerful filter through which to make investment decisions.
In short, retention, cost-cutting, and future investment is your way out of recession.
What do you think?
Peace
nouman.
