01 Apr 10 Old Strategies for a New World?

A recent McKinsey survey Economic Conditions Snapshot, February 2010: McKinsey Global Survey results[1] is interesting reading – especially Exhibit 2.

Exhibit 2 looks at how executives propose to deal with a new economy. It is heartening to note that a large proportion (48%) plan to introduce new products and services to take market share from weakened competitors. An interesting feature of this research is that replies are analysed in two categories – (a) those who are optimistic in terms of the prospects for economic recovery and (b) those who are not. Of the survey sample, nearly three-quarters – 74% – were in the optimistic camp.

52% of the optimistic plan to introduce new products or services but only 29% of the pessimistic are new product orientated.

However, productivity and cost cutting and other inorganic activities still predominate in both camps and overall only 2% plan to increase spending on “philanthropic activities” (11% plan to reduce spending in this area).

This makes one wonder if businesses are applying old world strategies (most notably cost-cutting) in an emerging new world. I have argued elsewhere[2] that the deeper the recession runs then the deeper will be the change in customer needs, behaviours and preferences and this observation applies particularly in the “B3″ group – those developed economies that have been badly wounded by the recession[3].

It would be interesting to see the proportion of corporate leaders that are encouraging their organizations to actively go out and explore how these emerging needs, behaviours and preferences are actually manifesting themselves – and in turn what are the implications for the organisation’s offerings, distribution routes and competences.

Notes
[1] Economic Conditions Snapshot, February 2010: McKinsey Global Survey results McKinsey Quarterly, Feb 2010.
[2] See: Your clients: Who will be the winners and losers?
[3] See: The B3: The new face of globalization?