Batten down the hatches - strategies for the next downturn

Is it really 18 months since many of us were pouring over research sources for the 2010 AQA BUSS4 research task on strategies for handling an economic downturn? Well dust those notes off folks cos here we go again with a second looming UK recession. But this time, will UK industry be ready?

Back in 2010, AQA students were required to examine how firms were affected by the last UK recession and what strategies were successful (or not) in dealing with the downturn.

The well-informed business student will surely have spotted the many signs that economic activity in the UK is slowing once again, with consumer and business confidence sliding in the face of the Government’s austerity programme, uncertainty about the future of the Euro Zone and the US economy struggling to shake off the last recession.

This article in the FT (caution: paywall) is an excellent and accessible update for a lesson on strategies in a recession.

Enterprise Editor Jonathan Moules talks to several entrepreneurs whose businesses survived the last recession but who were forced to take some decisive action in order to survive.

http://www.ft.com/cms/s/0/3dddfad8-fa39-11e0-b70d-00144feab49a.html

Some great learning points in here for students, including:

- How cutting overheads (fixed costs) lowers the breakeven point for a firm and makes it more likely to survive a substantial fall in demand and revenues

- The need for a clear focus on activities & markets where a firm has genuine competitive advantage

- The importance of effective cash flow management in a downturn

- Not losing sight of growth opportunities - for example by entering faster-growing markets in emerging economies