Tuesday, 24 March 2009

Winners in the Downturn

Recession has quite visibly taken almost everyone for a ride. From the stock market investor to the well-paid CEO to the lower middle class retail chain customers, everybody has tasted the bitterness of this downturn. Nonetheless it has been compared with the Great Depression of 1929. What is intriguing in this downturn is that there are many isolated winners amidst this chaos. Firstly, In any economic downturn, in every sector of the economy there will be businesses that fail. There will be businesses which struggle through and survive, and there will be businesses which grasp the upside of the downturn and emerge as winners. It is not a surprise that new age indian entrepreneurs saw an opportunity in this recession.

Bharti Airtel makes a good example to showcase how recession can be turned as an opportunity. A recent article in Business Today pointed out many reasons that made Airtel a run away winner in this downturn. But i strongly felt that only one of those many indicators was very critical in bringing profits to the Q3 and Q4 balance sheets. Airtel started the initiative to extend it's market share in the rural areas (commonly known as 'bharat'). Airtel did not resort to lower rates to attract customers. The focus was just to extend the market into the rural areas. The prime reason behind such an initiative, in my opinion, is that The buzzword (recession) was least heard in the rural areas. A strong belief about recession is that It´s all in your MIND! And we actually FUEL this recession much more than it warrants. And the rural market consisted of people who actually did not contribute to the "fuelling" process.

Challenging times are the true test of great leadership. Now is the time for owner managers to show the vision, determination, resilience and courage of the great leader. A lot has been talked about what caused this recession which is turning to prove a number of economic theories wrong. For instance, recession in economic terms is defined as a period of dull growth and plummeting GDPs for a period of 6-18 months. We are already crossing the upper threshold of 18 months. Federal agencies and governments are making almost vain efforts by introducing stimulus packages. But these are certainly not the solutions to the problem. These are just steps to reduce the impact on common man. The solution certainly should come from the consumer, from the common man. To be a winner in the downturn one has to be in control, be confident, be distinctive, be strong, be wise and be ready. If the consumer tries to be all those that i listed, We are definitely moving towards a strong bounce back.

1 comment:

pradeep sekhar said...

The concept of government inducing liquidity into the financial system with the aim of making the consumer spend is in direct correlation with keynesian econimics. Keynes has been spot on in devising ways out of downturns and other core economic policies which are required to get to the bottom of many economic crises.