Falling companies

Today, strategic management should have a more close regard for downturns, paying more attention to the external environment and its development around economic cycles. Economic cycles are well known for economists, stockholders, traders, etc, but also for companies executives, which even having their own shares on stock markets seem to ignore their cycles. Do they think on uncertain futures and economic downturns?

I believe Toyota is not going to ask for a Japanese government bailout. Within thousands of reasons, Toyota business approach along the years is quite solid, it even compromises a strategic planning of 100 years ahead, aside from creating many well known effective management tools which comply with their strategic approach. Moreover they are growing in other markets and concern other industries as well. South Korean conglomerates such as Hyundai does the same, and many others around Asia extend their portfolio to other industries in order to expand and sustain themselves.

GM, Chrysler and even Ford are now counting on US government when they should count with themselves on this downturn. With years of history and achievements, perhaps the fast track to gain short term profits and strive on the shareholder value principle is hitting hard now on their brand, or better, their foundations. Simply, they have become unable to handle such a downturn. Its true that recession affects obviously companies immediate sales, but shouldn’t be these multi billion companies with million wage executives be prepared for downturns? Shouldn’t they adopt similar tactics as Toyota in terms of strategic planning and management practices? Shouldn’t they assure economic sustainability in the worst of scenarios? Shouldn’t they expand their portfolios and make investments in other industries? Shouldn’t they had realized hybrid cars would be responsible for the environment at the same time could cut gas costs on their customers, which by the way they should think about?

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Giving your competitors an advantage

A Sony executive once put, the major difference between a Sony television and others is solely the design. Certainly didn’t add the story each brand tells, as well as sales people at the buying decision moment and many other factors. True that quality is often apparently equal at the sense of a normal consumer, but when brands simply forget their marketing at the point-of-sale is something that amazes me.

In this case I mention what I realized at a electronics store other day. Some brands such as Apple, correctly invest in making product videos and carefully positioning them at key points inside the store. Other brands, correctly put their own product videos at their own television set’s making it obviously aligned, like Aquos by Sharp presenting images from ocean life (curiously not in the picture example above). Worst then becomes when a television set displays other brand product videos.

In a very quick analysis on primary perceptions, a corporate video with a Samsung logo on the top displaying quality images and wonderful scenarios makes people think it is a Samsung television – the eyes first catch the glimpse of the TV screen, not the small logo at their base. Then when consumer realizes that this same TV is a Philips one, their first impression was already recorded and the brain previously started automatically to process the brand value plus its associations, leaving this next perception to a corner where is going to be more hard to change, specially to impact. If you want to give your competitors an advantage, follow the example above, if you want to earn yourself an advantage at a key moment where purchasing decisions take place, invest in marketing at the point-of-sale rather than many mass market waste tactics.

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