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Smart companies “never allow a crisis to go to waste”

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Apr 14 2009

Market forces are brutal. I still remember one of the most insightful things I heard during graduate school was one of my economics professors saying "for all of the good things a free market does, people tend to forget one key point: the market shows no mercy". With all of the depressing economic news in recent months, it is easy to understand why companies are standing pat and generally not taking on new marketing strategy and infrastructure projects.  That said, there are companies that realize that an economic downturn can be the best time to build market share and strengthen their position within a given industry.

At a recent Dice Summit, Electronic Arts CEO John Riccitello stated that the current recession is a blessing for the video game industry, in that "it will force the riffraff to go bankrupt" and ultimately result in higher quality games. While it is debatable whether decreased competition for EA will result in better quality games for the consumer, his statement shows that he recognizes this recession as an opportunity for his company.  Jo-Ann Fabrics and Bed Bath and Beyond represent other examples. With competitor Linens and Things filing for bankruptcy, both companies have seen an increase in available prime real estate and an influx of new customers that previously shopped with their competition.

When discussing marketing strategy with existing and potential customer, it is important to remember that the current economic downturn is Darwinian in nature.  Is your customer or prospect an evolver and a survivor? Or are they the "riffraff" that are likely to fall victim to market forces? Do they recognize that now is the time to solidify their infrastructure and marketing efforts and ensure that they are the key player in their industry when recovery comes? If the answer is yes, then the opportunity is there to help them reach their vision. If not, it may be time to run.

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