This is a presentation which I found extremely helpful in terms of how we think about the downturn. Given at the last Trinity Business Alumni morning meeting.

1. Strategies for the Downturn
Anindya Roy
Head of Strategy Consulting,
Ireland
Copyright © 2008 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

2. This downturn brings different
challenges
• A generation of management without experience of a sustained downturn
• Global interdependence
– Global supply chains, engineered to eliminate slack
– Distributed operations, facilitated by communications technology
• New competitive challenges
– Straddling developed and emerging markets
– Rise of emerging market multinationals
• Changing expectations around sustainability
– Aggressive emission targets demand new ways of operating
• Lack of liquidity driving healthy companies under
2
Copyright © 2008 Accenture All Rights Reserved.

3. We have seen several waves of impact
• Housing slowdown
• Consumer discretionary spend
• Consumer “big ticket” spend – notably automotive
• Business discretionary spend
• Business structural investment
3
Copyright © 2008 Accenture All Rights Reserved.

4. The Credit Crisis has exacerbated
problems
• Short term financing difficulties as banks refuse to extend credit
• Trade financing and insurance withdrawn
• Suspension of dividend payments
• Pension funding shortfalls
• Breaching of loan covenants
• Corporate bond market very difficult
4
Copyright © 2008 Accenture All Rights Reserved.

5. Lessons From The Past: Winners pull away
from Losers during and after a Recession
Our Findings
Performance comparison following
the 1990 – 1991 recession The divergence in High performers manage for
post recession value all the time and build
performance up strong balance sheets
between “winners” that create flexibility
and “losers” is
High performers position
dramatic
themselves strategically in
strong periods to take
Winners coming out
advantage of downturns –
of the recession
rather than the reverse
tend to maintain
their lead2 and have
High performers execute
lasting advantages,
differently during a
not just a fragile
recession such that they
edge
strengthen their existing
Notes:
positions rather than
1. Winners are those that outperformed others in their industry for the six
years following the recession of 1990-1991; losers are those that under-
changing course
performed others in the industry – See Note 1 on p.16 for more robust
definition
2. ROIC for the three year period following the 1991 recession explains more
than 60% of return for the remainder of the decade – See Notes 2 and 3
on p.16 for additional discussion
5
Copyright © 2008 Accenture All Rights Reserved.

6. Assess your exposure and choose your
response
• Understand how the different factors could play out in your industry
– Changing consumer spending patterns
– Reduction in business spending
– Impact of credit shortage
– Changing global trading patterns
• 360 degree risk assessment is essential
– How will you be affected by failures upstream, downstream or amongst
partners?
• Define your options and choose your response
– Survival
– Positioning for advantage
– Acquisition-led growth
6
Copyright © 2008 Accenture All Rights Reserved.

7. Survival strategies
• De-leverage and re-structure debt
• Tactical Cost Reduction
• Cash flow preservation
• Renegotiate pension obligations
• Asset Disposals
7
Copyright © 2008 Accenture All Rights Reserved.

8. Repositioning strategies
• Respond rapidly to changing customer needs
• Redesign your operating model to streamline and simplify
• Upgrade Performance Management Systems
• Invest in innovation
• Selective acquisitions
• Upgrade your human capital
• Go green
8
Copyright © 2008 Accenture All Rights Reserved.

9. Growth strategies
• Invest in new, game changing concepts
• Use M&A to leapfrog the competition
– Broaden geographic reach
– Achieve economies of scale
– Access new capabilities
• Look beyond beleaguered Western markets
• Take advantage of hesitant competition to grow your market
share
9
Copyright © 2008 Accenture All Rights Reserved.