At the start of 2020, executives weren’t exactly in an upbeat state of mind about the economy. Now as many companies wrap up the first quarter of the year, their minds are on the subject of health – both for their employees and their businesses. With developments coming daily around the spread of Covid-19 globally and its deadly effects, are there any guideposts for what comes next, and how might vendors adjust business strategies?
Looking back to see ahead
Two surveys by competing global consulting firms completed as recently as January 2020 now seem like they were done in another epoch. What they both show is that even before the global crisis of the Covid-19 pandemic, top corporate leaders were expecting economic trouble.
PricewaterhouseCoopers LLP released a survey Jan. 20 in which 53% of chief executives in 83 countries say they expect a global downshift this year. PwC talked to 1,600 CEOs for its 23rd annual survey.
Just 22% of CEOs see a rise in growth in 2020 and they expect their own companies to falter with the global economy this year with only 27% percent saying they feel “very confident” about their ability to lead their firms to higher economic ground this year, according to the survey.
PwC noted that this is the darkest view held since 2009, the first full year of the Great Recession.
Joining in the gloom were North American chief financial officers respondents to Deloitte LLP’s fourth-quarter survey. According to Deloitte, 82 percent already have taken at least action to defend their firm against a downturn.
Only three percent of respondents say the U.S. economy will grow this year, while 14% say their own companies show signs of a pullback – and remember, that was in 2019.
Economists have been rapidly revising their outlook in March as events rapidly overtake financial models. With many countries (as well as cities in the US) having issued “stay in place” restraints on citizens, economic activity in sectors such as travel (airlines, hotels), services (restaurants), and retail is abruptly slowing. Even assuming that “normal” economic activity resumes by May, economists are predicting a recession of at least six months’ duration.
As seen in the pre-pandemic surveys, there was already plenty of pessimism in C-suites, making a rapid turnaround unlikely.
What does this mean for companies positioning services and products for the edge computing market? We offer a few suggestions:
|• Vacate “disruption” from your marketing vocabulary. You are talking to people who are facing plenty of upheaval in their personal and professional lives; a promise of more disruption is going to lose appeal. Instead, focus on helping maintain continuity for their existing lines of businesses.
• Focus now on the use cases where services can provide cost savings or improve worker/production efficiency.
• Try to sell where there is a clear ROI, and be open to working with customers on pricing models that share risk/reward.
• If you don’t already have traction in a market vertical like retail, hospitality or consumer goods/services, now is not the time to spend time and money on verticals where there will be volatile macroeconomic conditions. Find a partner with an established customer base and sales channel for better capital efficiency.
There are no hard and fast rules for the challenges we’re facing to our personal health as well as the health of our businesses. Edge Industry Review welcomes readers to share their thoughts and experiences by contacting us here.
analysis | consulting | Deloitte | economy | edge computing | PwC | strategy