Idea in Brief
The Challenge
Even in severe economic downturns and recessions, some companies are able to gain advantage. In the past four downturns, 14% of companies increased both their sales growth rate and their EBIT margin.
The Winners
A shock like the Covid-19 pandemic can produce lasting changes in behavior, and those firms quickly spot the changes, adjust their business models to reflect them, and are not afraid to make investments.
The Approach
Examine the changes in the ways that people spend their time and money and the effects on the businesses involved. Then look at what the changes might mean for how you create and deliver value, who you need to partner with, and who your customers should be. Finally, be ready to put your money where your analysis takes you.
It will be quite some time before we understand the full impact of the Covid-19 pandemic. But the history of such shocks tells us two things. First, even in severe economic downturns and recessions, some companies are able to gain advantage. Among large firms doing business during the past four downturns, 14% increased both sales growth rate and EBIT margin.
