DCCI Calls for Multi-pronged Strategy to Survive Slowdown

DUBAI - Companies need to adopt multi-pronged strategies to survive the economic slowdown, a new study by Dubai Chamber of Commerce, or DCCI, said.



Viewing downturn as a short- to medium-term event, with a return to growth in the long-term, the study said that it should be viewed as part of a business cycle of periods of relatively rapid growth in output and periods of recession around a long-term growth trend.

A business needs to reassess its own strengths and weaknesses, competitive position and make changes in certain aspects of its business outlook towards the current economic downturn and even take advantage of it.

In its study titled ‘How businesses can survive the downturn,’ DCCI specifies the short-term and long-term measures that can help businesses achieve stability.

As a short-term measure, businesses have to improve cash-flow. More sales, higher prices and lower costs can boost cash-flow — all of which are still possible in a recession.

“To make your costs variable, understand what your cost base is and compare it with your revenue. When your revenues go up, your costs should also go up with it. Avoid long–term costs, review your main costs, hire more temporary workers and consider alternatives,” the study suggests.

DCCI says businesses should focus on the customer. The need to understand how much customers will be willing to pay given the current credit situation. They can even increase sales by giving the customer a more positive experience compared to competitors.

Reducing wastage of resources could be another short-term measure.

While implementing these short-term survival measures the business should continue to focus on its long-term objectives. The long-term measures include retaining and motivating the staff. “Balance any staff reductions with a long-term view to preserve talent. Retain talent by openly, consistently and frequently communicating to staff,” says the report.

“Outsourcing should be done to save costs. Whether it is outflanking competitors, unlocking new industries or complying with growing environmental mandates, outsourcing should be done with a strategic approach.”

Businesses need to improve corporate social responsibility. It can have a positive impact on financial performance by affecting stakeholder satisfaction. Training is essential for both junior and senior executives to help them think out-of-the-box solutions and innovate their way through the economic downturn, says the study.

aneela@khaleejtimes.com


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