What do J&J, Fed Ex, Morgan Stanley, Microsoft, GE, HP, Hyatt, Trader Joe’s, SW Airlines, MTV, and CNN have in common? A recent Newsweek article identifies these 11 great icon brands as US companies that started in a recession. A recent Wall Street Journal article contains market share data for different markets showing how leadership is changing rapidly. Who thought CIT and GE would lose their strong lending positions to businesses? The game changes in recessions, especially one like the present when the other side of the downturn is anything but an equivalent upturn. Consumers and businesses are in “reset mode” and their changes create new opportunities for: Followers to unseat leaders; Leaders to consolidate their industry; and, New-to-market categories from existing and new companies. Add in game changing new regulations for green house gasses – which essentially alters every comparative price –…
Use Real Problems to Drive Business Model Innovations
Here’s one highly certain trend: The U.S. consumer is unlikely to return to the level of spending before the recession. Blame it on the baby boomer generation, now realizing we must engage in a mad savings dash to make sure there’s enough money for retirement. With flatter consumption trends, US business investment absent an export surge will also grow more slowly. If you can’t ride an improving economy to success, what might guide your firm’s strategy to regain revenue and growth potential? Business investment and consumer spending priorities remain so uncertain, how can a leadership team define true north? Here’s what is certain: Focus business model innovations on unresolved problems and you’ll secure attractive growth. For example: Food safety Affordable heath care Quality of life as we age A lack of time to balance family and work Environmental degradation Business’ need to differentiate…
The Uncertain Consumer
If P&G can’t get it right, what will the rest of us do? P&G the master of consumer branding recently reported a 11% year-over-year revenue decline, more than analysts expected. The maker of Tide, Pampers, Bounty, Charmin, Crest, and Olay blames market share losses for part of the drop as more consumers switch to lower-priced products (e.g., store brands). According to the Wall Street Journal, “In recent years, Procter & Gamble has put more focus on higher priced products – like pricier Olay creams – in an effort to drive growth. That strategy has hurt the company during the recession as consumers cut discretionary spending in areas like beauty and traded down to cheaper pantry staples.” The key uncertainty facing P&G is: Where is the consumer headed? For national branded goods companies, Main Street or national big box retailers, Prada, in fact any…