RECESSION EFFECTS

"The global recession has driven 100 million more people below the poverty line and has caused 61 million more people to lose their jobs world-wide in the past two years, says a new U.N. report that Secretary General Ban Ki-moon was to present to the General Assembly on Wednesday."

Source: The Wall Street Journal, Joe Lauria, Wednesday, September 23, 2009, p A-5.

UNLOCK-IT-FORUM

This past Thursday THE STRATEGY EXPERT served as a Solutions Provider at the Unlock-It-Forum. It was great to find nearly 100 business leaders getting together to positively discuss the opportunities ahead instead of negatively talking about the past economy.

I told the leaders that the opportunities that are out there today are greater than anytime, perpahs in the past 15 years. The playing field is "flatter" and small and medium-sized oragnizations now have a realistic chance of earning market share.

I think leaders are beginning to think strategically and plan for the next growth stage.

PREDICTION COMING TRUE

Earlier this year, the government announced that if it did not move forward with the stimulus package, the unemployment rate could go as high as 7.5%.

I predicted that if the federal government did move forward with the stimulus package, the unemployment rate would go as high as 10% to possibly 10.5%.

This week the official unemployment reached 9.7%. Closer to my prediction than that of the economists in Washington.

CLUNKERS RESULTS

Well, the results are in for the Cash for Clunkers program that was supposed to revitalize the U.S. automakers. According to The Wall Street Journal, the top 10 models purchased in the rebate program are:

1. Toyota Corolla
2. Honda Civic
3. Toyota Camry
4. Ford Focus FWD
5. Hyundai Elantra
6. Nissan Versa
7. Toyota Prius
8. Honda Accord
9. Honda Fit
10. Ford Escape FWD

It appears you can have any domestic car you want as long as it is a Ford.

GOVERNMENT VERSUS BUSINESS

Business in the United States is almost like a “bad word”. To say you are in business conjures up images of flying in a plane and offering bonuses.

I am reminded of the fact that the U.S. government is also out of money and operating at a deficit and has been since before the economic downturn. In fact, the government is $11 trillion in debt. http://www.brillig.com/debt_clock/

While it is popular today to criticize business, there have been times in the past when the Federal government has needed the financial backing of business.

Let’s begin with the founding of the United States. During the Revolutionary War, the tobacco industry helped finance the war by using tobacco as collateral for the loans from France that were necessary to survive. Thus, the United States might not even be a country if it not for business. http://academic.udayton.edu/health/syllabi/tobacco/history.htm#industry

In 1877 JP Morgan and August Belmont, along with the Rothschilds, floated $260 million in U.S. government bonds. After the government ran into some problems with gold, JP Morgan bought $200 million work of government bonds with gold; thereby preserving the credit of the United States. {And he didn’t even ask for control of the government or fire the CEO – the President]. http://www.financial-inspiration.com/JP-Morgan-biography.html

There needs to be a strategic relationship between government and business and at the present time, the government seems to be taking advantage of the situation.

Do You Strategically Plan for What You Sell or What you Market?

Here is a sales and marketing strategic thought to ponder:

The percentage of visitors who say they come to Las Vegas to gamble: 5

Perentage of visitors that actually gambles: 87

Source: Las Vegal Convention & Visitors Authority.

Do you strategically market to the philosophy or the behavior?

KEEP ON ADVERTISING

For months now I have been advocating that now is not the time to stop planning strategically, conduct research, or decrease advertising. In fact, I have even stated on several occasions that those companies who continue to progress, will be the market leaders once the recession ends.

I am reminded of a study McGraw-Hill conducted during the last major recession (1980-1985. The study indicated that those companies who continued to advertise aggressively experienced a 256% increase in sales. That is significant.

Those companies that decreased advertising during that same period found that not only did sales drop dramatically, they had to work 2.5 times as hard and as fast once the economy improved, just to get back to where they were before the economic downturn.

In fact, when presence in the marketplace is decreased for 2 years, 40% of the targets don't even know you exist.