Peek of economic crisis still to come
Western Europe is bracing itself for still more waves of layoffs
Companies the world over are expecting the crisis to bottom out toward the beginning of 2010. On average, global forecasts are predicting recovery no earlier than mid-2010. Managers in Europe are especially pessimistic, not expecting a recovery until the second half of 2010. Their counterparts in the US and Asia are somewhat more optimistic: they are expecting an economic upswing already by the end of 2009. To get back on track, managers are cutting costs and trying to manage liquidity better. But the crisis also offers the opportunity for structural adjustments and strategic realignment. These are the findings of a study entitled "Restructuring International 2009". Roland Berger surveyed the management boards and CEOs of about 400 international companies in twelve different industries.
The crisis has gripped companies everywhere, but the worst is still to come. The financial services, automotive and engineered products industries are taking the brunt of the crisis. According to the study, these sectors will recover only slowly. The forecast for the pharmaceutical and healthcare industries is somewhat rosier: The opinion is that these industries will recover most quickly. At least half of those managers surveyed are expecting declines in sales of more than 10% in 2009. 40% of managers in Asia and Europe are assuming a decline in sales of more than 15%. In the US, 55% are forecasting a decline of more than 10%.
Western Europe is bracing itself for still more waves of layoffs
To get back on track, managers are cutting costs and trying to manage liquidity better. Some 60% of companies in the US and Europe have already cut their personnel costs by more than 10%. In the future, 30 to 50% of companies will reduce personnel costs by more than 10%, depending on the region. This holds true especially in Western Europe, where layoffs are expected to rise from 42% to 52%. Almost half of all companies surveyed rated short-time work as important to very important.
Successful restructuring means fast implementation
According to the top executives who participated in the study, successfully combating the crisis primarily entails quickly implementing restructuring programs: 79% of the respondents named it as the most important success factor. Second most critical (76%) was "Management commitment," meaning support of the restructuring by management, followed by "Intensive project monitoring" (67%).
Companies want to cut costs and make acquisitions
From an entrepreneurial point of view, the crisis also offers opportunities: 64% of the survey respondents believe that they can now reduce their cost bases. Similarly, 64% also see opportunities for concentrating on their core business, and more than half see a chance to streamline the market. Other opportunities mentioned include sound investments and acquisitions. The study also revealed that companies recognized the benefits of government aid programs for the economy as a whole: 21% view these actions as positive. However, concerning what these government actions mean for their own companies, opinion is somewhat more critical. In global comparison, Asian companies rated the aid programs most positively.
Structural adjustments and strategic realignment
Companies can survive the crisis and even emerge stronger from it, as long as they set the right priorities. They need to introduce rigorous liquidity management and work closely with banks and credit insurers so that they can respond quickly to liquidity bottlenecks. In addition, structural adjustments are an absolute must for reducing fixed costs.
Companies the world over are expecting the crisis to bottom out toward the beginning of 2010. On average, global forecasts are predicting recovery no earlier than mid-2010. Managers in Europe are especially pessimistic, not expecting a recovery until the second half of 2010. Their counterparts in the US and Asia are somewhat more optimistic: they are expecting an economic upswing already by the end of 2009. To get back on track, managers are cutting costs and trying to manage liquidity better. But the crisis also offers the opportunity for structural adjustments and strategic realignment. These are the findings of a study entitled "Restructuring International 2009". Roland Berger surveyed the management boards and CEOs of about 400 international companies in twelve different industries.
The crisis has gripped companies everywhere, but the worst is still to come. The financial services, automotive and engineered products industries are taking the brunt of the crisis. According to the study, these sectors will recover only slowly. The forecast for the pharmaceutical and healthcare industries is somewhat rosier: The opinion is that these industries will recover most quickly. At least half of those managers surveyed are expecting declines in sales of more than 10% in 2009. 40% of managers in Asia and Europe are assuming a decline in sales of more than 15%. In the US, 55% are forecasting a decline of more than 10%.
Western Europe is bracing itself for still more waves of layoffs
To get back on track, managers are cutting costs and trying to manage liquidity better. Some 60% of companies in the US and Europe have already cut their personnel costs by more than 10%. In the future, 30 to 50% of companies will reduce personnel costs by more than 10%, depending on the region. This holds true especially in Western Europe, where layoffs are expected to rise from 42% to 52%. Almost half of all companies surveyed rated short-time work as important to very important.
Successful restructuring means fast implementation
According to the top executives who participated in the study, successfully combating the crisis primarily entails quickly implementing restructuring programs: 79% of the respondents named it as the most important success factor. Second most critical (76%) was "Management commitment," meaning support of the restructuring by management, followed by "Intensive project monitoring" (67%).
Companies want to cut costs and make acquisitions
From an entrepreneurial point of view, the crisis also offers opportunities: 64% of the survey respondents believe that they can now reduce their cost bases. Similarly, 64% also see opportunities for concentrating on their core business, and more than half see a chance to streamline the market. Other opportunities mentioned include sound investments and acquisitions. The study also revealed that companies recognized the benefits of government aid programs for the economy as a whole: 21% view these actions as positive. However, concerning what these government actions mean for their own companies, opinion is somewhat more critical. In global comparison, Asian companies rated the aid programs most positively.
Structural adjustments and strategic realignment
Companies can survive the crisis and even emerge stronger from it, as long as they set the right priorities. They need to introduce rigorous liquidity management and work closely with banks and credit insurers so that they can respond quickly to liquidity bottlenecks. In addition, structural adjustments are an absolute must for reducing fixed costs.
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