Global Recession

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Ways to survive current global recession

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Global Recession

  1. 1. Effects of Global Economic Recession in India
  2. 2. Recession – An Overview
  3. 3. What is a recession? <ul><li>Decline in a country's gross domestic product growth for two or more consecutive quarters of a year </li></ul><ul><li>Preceded by several quarters of slowing down </li></ul>
  4. 4. Causes of recession <ul><li>Currency crisis </li></ul><ul><li>Inflation </li></ul><ul><li>National /Government Debt </li></ul><ul><li>Speculation </li></ul><ul><li>War </li></ul>
  5. 5. Effects of recession <ul><li>Bankruptcies </li></ul><ul><li>Deflation </li></ul><ul><li>Foreclosures </li></ul><ul><li>Reduced sales </li></ul><ul><li>Stock market crash </li></ul><ul><li>Unemployment. </li></ul>
  6. 6. Current Global Recession
  7. 7. Causes <ul><li>Sub-prime Lending Crisis </li></ul><ul><li>Tightening of liquidity </li></ul><ul><li>Rising oil prices </li></ul><ul><li>Capital Flight in Emerging Markets </li></ul>
  8. 8. Effects <ul><li>Difficulty in borrowing </li></ul><ul><li>Unemployment </li></ul><ul><li>Falling Profitability </li></ul><ul><li>Falling Stock Market </li></ul><ul><li>Decline in Consumer Confidence </li></ul>
  9. 9. After-Effects <ul><li>US likely to shift US$24 billion to it's International portfolio – large amount expected to reach India & China </li></ul><ul><li>ITES set up to take major hit due to dependency on US </li></ul><ul><li>Lowering of prices due to scale economies, improved productivity and operational efficiency </li></ul><ul><li>Opportunity for flourishing health tourism </li></ul><ul><li>Concept of Social Security may gain momentum due to high amount of job cuts </li></ul><ul><li>Appreciation of INR leading to reduction in trade deficit </li></ul>
  10. 10. Benefits <ul><li>Lower interest rates for borrowing </li></ul><ul><li>Lower inflation rates </li></ul><ul><li>New ways of cost cutting and Reevaluate the financial situations. </li></ul>
  11. 11. Indian Scenario
  12. 12. All is not well in Indian Industry <ul><li>Delhi University, Economist, Ram Khanna - &quot;The impact is mainly on those companies which are either internationally exposed for raw materials (steel, oil) or whose revenue is in dollars.&quot; </li></ul><ul><li>MakeMyTrip, Founder and Chief Executive, Deep Kalra - “Things are tough in the industry as a consequence of US recession, which has now slowly started impacting the Indian economy as well.&quot; </li></ul><ul><li>Yo! China, Managing Director, Ashish Kapur - &quot;The food prices have gone up phenomenally, but we rationalised our business to insulate our company (from the crisis) by exiting business which are not profitable.&quot; </li></ul>
  13. 13. Deal with Current Recession
  14. 14. Survival Strategies <ul><li>Reevaluate your entire pricing structure. </li></ul><ul><li>Think strategically. </li></ul><ul><li>Go bargain hunting. </li></ul><ul><li>Consider strategic investments. </li></ul><ul><li>Monitor your cash flow. </li></ul><ul><li>Engage your employees in the process. </li></ul><ul><li>Be slow to hire and quick to fire new employees to keep only the best. </li></ul><ul><li>Talk to your bank, investors and other sources of capital. </li></ul>
  15. 15. Adapt to Recession <ul><li>Project cash flow in advance and monitor budget </li></ul><ul><li>Pressurise debtors to pay up </li></ul><ul><li>Review overheads and improve cost efficiency </li></ul><ul><li>Reduce Stock Levels </li></ul><ul><li>Keep upto date with latest financial information </li></ul><ul><li>Think hard before incurring capital expenditure </li></ul><ul><li>Aggressivley seek new business </li></ul><ul><li>Be open to new ideas and accept constructive criticism </li></ul><ul><li>Relieve pressure on cash flow. Ask suppliers to extend credit </li></ul><ul><li>Provide quality goods and service </li></ul>
  16. 16. SWOT Analysis <ul><li>Avoid taking bad business </li></ul><ul><li>Don't accept business that cannot cover costs </li></ul><ul><li>Survival is more important than size </li></ul><ul><li>Operate in “lean and mean” mode </li></ul><ul><li>Aggressively pursue debtors for payment </li></ul><ul><li>Look for talented unemployed people </li></ul><ul><li>Marketing assumes further importance </li></ul><ul><li>Solidify business through Mergers and Acquisitions </li></ul>
  17. 17. Thank You

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