Wednesday, December 16, 2009
Companies Find Opportunities Even In Recession
Darrell Rigby has a really hard job. He advises CEOs on what to do during a downturn as part of his work at the Boston consulting firm Bain & Co. He tells them to think of their companies as race cars careening around a track, where recessions are the curves.
Rigby says it's hard for companies to pass each other during good times on the straightaway. The big companies stay in front on power alone.
"But on a curve, curves are driven by strategic finesse and so even a company that has less power — if it is skillfully maneuvered in curves — can pass much larger, stronger competitors," Rigby says.
The U.S has just been through its worst recession in decades. More than 100 banks have failed and countless businesses have gone under. But there's a growing body of research that suggests some companies actually do well in recessions. That's because recessions create opportunities that don't tend to occur when the economy is humming along. Inevitably, some companies are able to take advantage of these opportunities.