The economic slowdown has set in. Prediction suggests that the slowdown will get converted to recession. It will leave impacts on all countries. Indian incorporates are preparing themselves for the difficult times in the best possible way
SLOWDOWN HAS already set in and is seen invariably in all the countries. The effects will be more devastating if the United States goes into recession. The companies are preparing themselves for the tough times ahead. The strategies are being built not only to improve the bottom line but also built a shelter for the recession period.
The banking is worst hit sector by the present meltdown. The banks earlier focused their attention on increasing their loan exposure to increase the profitability. However with changing time, the strategies change. They are now more interested in deposit growth. They now want to increase the low cost deposits. They can be optimistic about their working module because banks still forms the place where 55 per cent of the household saving is parked. This give them a good chance to handle the situation effectively.
Apart from the domain area of working, they are actively involved in growing non-banking subsidiaries. Different sectors are chalking out different plans to tackle the situation according to their own requirements. Realty sector companies are completing their projects before time. This saves a lot of manpower and can be effectively used for other projects. Also this gives them the chance to earn bonus amount for early completion of job. They are constantly in search of unexplored region, following blue ocean strategy.
Agreement are signed with a clause that any variation in the input cost will be shouldered by the customer. This shields the companies from the price variation from the internal or external factors. The companies are importing the raw material from place where it is cheaper, as in the case of DLF, which imports cement from Pakistan. The broker houses are not spared by the current meltdown. Sufficient margin is maintained in account before the customer place the order. They are increasing the number of customer camps across various cities to increase the customer base.
Although the information technology sector receives major part of its revenue from west and have a good exposure to the finance sector, it has slowed down marginally, but it is very optimistic about the situation.’ The companies have not slowdown on the recruitment spree. This indicates that there are number of projects waiting for execution. These are now more focused on the opportunities in the telecommunications, health care and manufacturing sector. Companies are trying to improve average revenue per employee.
However, there is one sector which everyone can easily digest that it is least affected by slowdown. This sector is ‘advertising’. The companies can’t cut down on advertising, because this is only way by which they increase their brand visibility and sell the product. The sectors most affected aren’t cutting their advertising bill. This is only hope, for the way out. Max New York Insurance have pumped in Rs 100 crore in marketing the product. This is a small example. Adverting spent goes in millions to earn billions.
Hope this strategies hit the right code and the companies overcome this crunch situation.
