The economic resection time can be a chance for the organisations to excel, even though many companies show a decline in their growth with a strategic planning there is a chance for the organisations to show a positive growth even during the financial crisis. Some of the well established companies were able to withstand the crisis, companies such as Nike, Colgate-Palmolive and Unilever etc (). It is said that in addition to the idea of protecting and developing the market brand, organisation must also ensure that at the time of crisis operation flexibility is mush necessary for making an innovative and decisions which coincide with the market opportunities.
In order to run a smart business at the time of resection a company must balance in their cost reduction and in smart Investments. SAP AG a German software corporation, which is an expertise in business solutions, is one of the companies which made a much profitable business during the last financial crisis. The chief executive of SAP has said that few practices with less effort were enough to pass over the world financial crisis. The few practices are managing the cash flow, Run lean operations, Drive compliance Activities, Protecting and Nurturing our Brand, Getting closer to our Customers and Retaining the companies top talent (). Managing cash flow is to be done as the revenue within the company tightens, the company must be able to manage the cash flow from proper hand to hand and keep up the share holders’ confidence. Lean operations must be carried out in order to reduce the internal cost and by improving the employee productivity and making a stream lined operation. By lean operation a company can reduce 25 percentage of operating cost, and as for the external costs the company must take proper measure to reduce the Maverick and worthless expenses in the supplier environment.
Driving compliance activities in an organisation makes the rules and regulations of the company more rigorous than the existing initiatives. A streamlined work out in a organisations’ management will lead to a positive result of the company.
During crisis period the brand name must be looked upon, because there are chances that can break the brand name. Customer retaining is one of the important thing that must be done, since retaining profitable customer needs greater innovation and dedication towards the business. With this strategic approach like innovating new products and services, the best example can be apple which dropped out few products which did not reach its border line and came up with new products and its best service such as iTunes. The iTunes is now one of the highly recommended and used software worldwide.
Retaining the top talent is much needed at the crisis period. It is known that most talented people stay employed in market segment. Any organisation seeks best innovative employee who can creative a product or program that can make the company retain at the top level and a consecutive growth.
Korean Telecom Company (KT) is one of the leading market leaders, which showed up a tremendous growth during the last financial crisis. The Korean telecommunications is the largest IT organisation in Korea. At the time of Asian economic crisis in the year 1997, the company started facing challenges which came to an end in the year 2002. By the time KT started making strategic decisions which made the company excel through the tough situations. The first step taken by the company was to be privatised by the year 2002 and the company generated $9 US billion with an average of 44,000 employees. As of 2008 report the organisation generates revenue equal to $27 US billion with a prestigious rank of 13 among the largest Korean companies. The KT has got a benchmark for having the highest number of Internet users among the major players in global IT sector.
The strategic decisions were done by the top level managers; they crafted each and every decision made by and for the organisation. The company stated that they implicitly assume the ‘strategic choice view’ which helps in guiding the top level managers to deal with the external environment. In the year 1987 Korean government announced that 49 percent of KTs’ share can be sold to public, but only 10 percent were sold out. In the year 1989 British Telecom was successfully privatised which made the working class people to afford buying KTs’ shares.
During 1997 the Korean government announced that KT had a debt around 725 million dollars, which was less compared to other public companies in Korea. The KT had a powerful restructuring after the privatising; these results helped the organisation in convincing the direct investors. Korean Telecommunication had a successful transformation during the economic crisis was completely based on the virtuous cycle between both the strategies.
Reports have shown few companies that were successful during the economic crisis.
Fig 1: Companies that sustained financial crisis
The above shown report is for the Green winners, i.e the companies which showed a better performance to sustain the financial crisis. The analysis involved about 99 companies which had a strong commitment towards sustainability and it was also noted that 16 of 18 companies which had commitment to sustainability averaged about %650 million. Few common characteristics were also found in the companies like the companies had a focus on long term strategy and not for short term, a strong corporate governance were seen and sound risk management practices were found in common with the sustaining companies.
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