1 Take a closer look

What is the issue?

Determined to secure profit, some companies tend to take over-hasty measures in an economic slump. Many businesses will be tempted to freeze infrastructure investments, mothball new growth projects, slash advertising expenditure and cut loyalty programmes for customers and staff. The path of least resistance leads to defensive and piecemeal actions. Most damaging of all, these businesses risk losing out to their competitors.

What do I need to be aware of?

However, some businesses will take a different approach and invest where others are cutting back. These are the businesses that will benefit from the on-going situation. Businesses that understand the situation can navigate a downturn in a way that makes the most of the opportunities arising. Consequently, it is worth taking the time to understand just how an economic downturn can impact the company.

What questions should I be asking myself?

• What have been, and will be, the real drivers of performance across my portfolio?
• How is performance exclusively driven by the market across my segments (products and clients)? How is it driven by my competitiveness?
• What services do my customers value? Which are they happy to sacrifice?
• Why are my customers switching to other providers? Is it simply trading down or do others represent better value for money?
• What are my competitors doing or planning to do?
• What did they do during the last downturn?
• Who gained and lost as a result?

How can PwC help?

Drawing upon a network of expertise and the experience of our professionals, we help you chart the right course in a downturn. Check the column on the right for details of who to contact and for further information.