We are all aware that the global economy is currently going through a significant downturn, making executives cringe while watching the evening news, fearing that another – once solid – financial institution might go down in flames or in the generous pockets of a bigger fish, all because of the so hated credit crunch plague.
The general tendency during a crisis is to tighten up pockets and kill or stale all cash hungry projects, often times these being marketing campaigns or new development projects. Unfortunately, companies often focus only on downsizing or cutting potential losses rather than identify actual opportunities that a crisis can bring along (and I don’t refer here to pure financial or exchange rate speculations).
Ironically enough, an economic crisis can be a boost for quite a few types of businesses. Educational programs, such as MBA’s, are becoming more attractive during a crisis, either because managers struggle to keep their potentially insecure jobs or because they want to change their current jobs into better looking jobs in another company or industry, as Zoya Zaitseva, QS World MBA Senior Operations Manager, recently declared in Ziarul Financiar.
However, the boost in educational business doesn’t happen necessarily without schools lifting a finger, just watching applicants flocking their hallways, hungry for knowledge. It is important for schools to position their offering in such a way that it appeals to both managers wanting to develop their professional skills, as well as companies wanting to train their employees to better deal with a crisis, both categories driven by an urgency call to improve their security, a much stronger drive and much easier to sell to.
It is interesting how this urgency call, the initial step in the typical change process, comes out so clearly and loud during a crisis. Clearly, during an economic crisis, companies need to change and adapt to the new environment by readjusting their positioning in such a way that they can travel safely through the troubled waters, while even making money in the process. But beyond adapting to the environment, companies should also look out for opportunities, because cutting costs is most often not the best alternative out there.
There are many opportunities out there, opportunities that often companies treat as a low priority, simply because the context is not usually there to bring them into the spotlight. The automotive market is quite a good example of this behavior, because during a financial crisis, both companies and customers try to minimize their expenditures, but companies don’t see how this customer behavior is actually an opportunity for them.
A recent Hitwise article shows the fact that the number of UK Internet searches containing “second hand” increased with 22% over the last 12 months, with cars being the most popular second hand product, accounting for four of the top ten searches containing the above mentioned sintagm. In Romania, Trafic.ro Tools shows that second hand cars are by far the most searched for items on the online second hand market with five of the top 10 searches for “second hand” being related to cars or auto parts and another three of the top 10 searches being linked to lighter two and four wheels vehicles (ATV’s, motor bikes and scooters).
The Romanian auto importers are whining about the decline in their new car sales. However, instead of tightening up their belt and hugging their new cars tight in order to resist to the global financial crisis they should focus their operations on their second hand divisions (and most of them have important second hand businesses running alongside their new car sales networks). The second hand auto market is actually booming in Romania right now, fueled by both the global financial crisis, as well as the reduction in the local environmental tax charged for the car’s first matriculation.
As seen in the examples above, a financial crisis can actually be an opportunity for various industries, despite the negative outlook of the global economy. If we think about this for a moment, leaving all fears aside, a crisis is nothing more than a context for our businesses, but a context that creates a sense of urgency that forces us to leave our comfort zones and change in order to adapt and survive.
If we think about this in marketing terms, the issue is actually a repositioning process generated by a change in the context that we do business in. The question is: why do we need a crisis to force us to reposition in order to take advantage of opportunities that have always been out there?