Crack the Crunch with the Crunch Breaker
Golden opportunities in a downturn Posts
Innovation of the year! Is this a post recession trend?
August 24th, 2009
It all started when I was handed a flyer when rushing for the Tube (subway, metro) near to where I live in West London. Some guys were strategically standing in my path (the same way as ‘chuggers’ do) giving out flyers. My first reaction was, as always, to avoid them and (in a very London way) to keep my eyes down, avoid any eye contact whatsover and get to the Tube by the shortest possible route.
I could’t avoid the flyer though and just pushed it in my pocket. I short while later, when looking for something else, I found the (offending) flyer. Zipcar.
Hmmm.
Later that evening I rushed past the same guys still handing out flyers, again doing my best at avoiding them and making eye contact. On my walk home I passed a smart VW Golf with a small sign next to it which said simply ‘ZipCars live here’.
My interest was tweaked, so I got online to find out more.
Well, the net result is that I no longer have my gleaming Beamer but have chosen to use ZipCar instead. It’s brilliant. And I am sure that this recession will lead to a lot more people doing the same as me. I save a fortune AND I become a carbon footprint saint….
Just think – you find a car very near to where you live using the Zipcar website, access the car using a credit card type devise, find the key, use it by the hour, day or longer and just return it to where you left it. No insurance, no lease, no congestion charge to pay, no tax disc or residents permit. No searching for a parking space late at night. AND just think of the environment!
So when I realised how much I was paying for NOT using my car, ZipCar made complete sense.
I think it’s a great innovation that can only be a winner – in fact everyone seems to win. Obviously it’s of no use to someone living out in the country or miles from anywhere, but for city dweller it’s perfect.
I see this as a very real post recession trend. I wonder if it’s taking off elsewhere. It deserves to.
Guess which country escaped the recession?
July 31st, 2009
I wrote about this a few months ago and it seems my hunch was right – our antipodean friends down under are winning through when the rest of the world is limping along.
According to the UK financial paper CITY AM, Australia has managed to avoid the recession.
There has been alot written about the recession being a global phenomenon, affecting every developed country. Yet Australia is a glaring exception; it has not only avoided the worst of the destruction, but has not even gone into recession, which is truly astonishing.
Although Australian GDP contracted by 0.6% in the 4th quarter of 2008, it expanded by 0.4% in the first quarter of 2009, which seems to have gone unnoticed in Britain and elsewhere. But why has this happened?
The Reserve Bank of America started to hike interest rates in 2002, many years before the rest of the world realised that an irrational exuberance had set it. The bank had taken early action to cool the property market which in 2002 in Australia was spiralling out of control and the impending bubble threatening the economy. Sounds familiar?
Plus the Australian banks steered clear of sub prime loans – accounting for just 1% of the total in 2007 versus 13% in the US, so their banking infrastructure remained intact – there have been no bail-outs of banks and state-financed recapitalisations.
Their action led to a slowdown in home loan lending – from a peak of 21.5% in 2002 to only 7% in May 2007. As a result the housing market cooled down and Australians started to save money.
Even today the base rate in Australia is at 3.5%, much higher than the rest of the world – but the economy is ticking along despite this and they still have plenty of ammunition to reduce rates further if needed.
This may well be case-study material for the post recession analysts, one thing’s for sure. I will be happier than ever to jump on plane to Oz to visit some of my customers.
Seize golden opportunities in a downturn
February 6th, 2009
‘Most managers look for golden opportunities when times are good all and is well with the world. This is a mistake. The best one’s often arise during downturns’. So wrote Donald Sull last week in the Financial Times.
Ian King, CEO of BAE said recently in a speech on the economy that ‘the strong will get stronger and emerge with greater market share’. How true this is, especially in the current market.
Look at the vultures circling around the carnage left by the collapse of the Icelandic Banks. Philip Green jetting off to to Rekjavik to pick at the bones of ailing UK retailers. He may not have been successful then but he saw a golden opportunity to acquire businesses that were vulnerable and took first mover advantage.
Some smaller entrepreneurial businesses I talk to see the present as the time to grow; take tactical advantage and come out stronger. These are bold moves in uncertain times. But it’s easy in a downturn to focus exclusively on managing threats, whilst losing sight of the opportunities out there. To counterbalance this, business owners need to ask themselves if they are retreating from opportunities they can seize? Does our competitors’ pain create an opening for us? Can we snap up key resources at bargain prices?
All the economic bad news can be balanced by the reality that every downturn has an upside. Business leaders need to recognise these opportunities during hard times and seize them.