11.50am-Boston Consulting gives a stern warning, by Pukky, this blog’s neutral business and economics analysis

 

BCG has a long history of helping companies survive and thrive during global economic downturns. This expertise is encapsulated in the Collateral Damage series, which addresses the main issues senior executives should be thinking about and acting upon in a time of crisis.

 

Two key features underpin the Collateral Damage series:

 

A comprehensive, big-picture analysis of the global economic downturn as it evolves in different regions, countries, and sectors

Practical guidance for senior executives on tried and tested steps that should be taken to protect companies from the worst of the crisis and to prepare them for when the economy recovers

 

 

The Collateral Damage series draws on experts from across BCG, reflecting the global nature of the economic downturn. The five parts of the series published so far are:

 

 

 

“Collateral Damage Part 1: What the Crisis in the Credit Markets Means for Everyone Else”

 

This paper presents BCG’s initial prediction that the financial crisis will have a damaging impact on the wider economy. It investigates the roots of the crisis and enumerates the various ways that nonfinancial companies will be affected, including limited access to funds, a higher cost of capital, tougher stock markets, government protectionism, more regulation, and weaker consumer demand. It also outlines a series of practical steps that senior executives can take to counter the worst effects of the downturn.

 

 

 

“Collateral Damage Part 2: Taking Robust Action in the Face of the Growing Crisis”

 

This paper examines the developing economic crisis as it spreads beyond the financial sector and assesses the likely impact of the interventions on companies around the world. It warns of a deep and prolonged recession in the United States and Europe and provides a holistic three-part executive action plan.

 

 

 

“Collateral Damage Part 3: Asia, Advantage, and Action”

 

This paper considers the likelihood of a deflationary outcome to the economic crisis, reviews the impact of the crisis on some Asian markets, explores what effect this might have on global sourcing strategies, and describes in more detail what companies should do in three specific areas: leadership and people, the financial fundamentals, and pricing. There is also an appendix for readers interested in examining where the culpability for the crisis might lie.

 

 

 

“Collateral Damage Part 4: Preparing for a Tough Year Ahead – The Outlook, the Crisis in Perspective, and Lessons from the Early Movers”

 

In this fourth part of our Collateral Damage series, we consider the outlook for 2009 (including the likely effect of the crisis on consumers around the world), revisit the history of the crisis in order to understand why the economic story has developed as it has, describe the very varied assumptions that some major companies are making for 2009, and detail how four major companies responded early to the crisis. We also include three appendixes. The first contains an analysis of the parallels between the current recession and the Great Depression; the second provides a portrait of the recession through a series of statistical graphics; and the third describes some of the seminal events in the crisis.

 

 

 

“Collateral Damage Function Focus: Responses for Marketing and Sales in the Global Downturn”

 

Markets in crisis may represent an opportunity to capitalize on weaker competitors—or they may drive a mandate to cut marketing and sales budgets for the coming year by 20 percent, 30 percent, or more. This paper outlines pragmatic actions to consider now with regard to commercial cost reduction, revenue management, and pricing

 

Blog Note: We just hope BCG is wrong on this one!