It will be interesting to see what the corporate landscape will look like when we get to the other side of the recession. According to a report by The McKinsey Quarterly, it will be quite different to how it looks now.
“[After analyzing] nearly 700 high-tech companies during contractions in markets around the world over the past two decades. [They] found that the turmoil accompanying downturns significantly reconfigures the high-tech landscape. About half of the companies that entered these downturns as leaders—the top 20 percent—ended up as laggards when the economy regained momentum.”
There are many ways that this could come about of course, some are:
- The leaders were slow to react to changing economic pressures and costs dragged them down
- The leaders saved cash and did not invest in technology to keep up with market demands
- Entrants or non-leaders innovated around the leaders with a business model that the downturn actually strengthened
Of course, “business model” is not limited to “pricing” or “cost structure”. It could include the channel, licensing model, support structure, etc. Everything that goes towards how a company makes and uses money.
In a software-based industry, there is a great deal of opportunity in #3. And if you’re interested in discussing how Xuropa can help your company take advantage of the environment, please drop me a line via Twitter (sfojames), LinkedIn, or Xuropa.
It will be very interesting to see how things shape up. In a sadistic kind of way this is an exciting time to live through. Maybe some day we’ll be able to tell our grandchildren that we lived through the great recession… just like our grandparents talked about the great depression. What doesn’t kill you makes you stronger.