Chamber of Commerce

How to be the breakaway

company in the upturn
29 April 2010

| |
Speaker

John Dunne
Partner
Private Company Services
john.a.dunne@ie.pwc.com
Agenda

‡ Some facts about recessions

‡ Lessons from previous recessions

‡ Where do we go from here ?

‡ Navigating the upturn - 10 fundamental priorities

‡ Navigating the upturn ± Structure of an upturn plan

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 3
 ³Everybody¶s got a plan««

PricewaterhouseCoopers
 ««until they get hit´ - Mike Tyson

PricewaterhouseCoopers
What
Happened?

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 6
Some facts about recessions

Top Company performance

Quartile in the 2001 recession

20% 25%

Bottom
Quartile

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 7
Some facts about recessions

70% of those who made

gains in the last recession
held onto those gains
(Bain & Company)

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 8
Some facts about recessions

‡ Gains made during recessions tend to endure

‡ The number of opportunities to make deals or take advantage of weaker
players increases during a recession
‡ Companies that hunker down or become defensive create openings for
others (Bain & Company)
‡ Good times mask the hard truths of company performance - tough times
reveal true strengths and weaknesses

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 9
 ³Only when the tide
goes out do you
discover who's been
swimming naked´
_

 



   
How
How to
to be
be the
the breakaway
breakaway company
company in
in the
the upturn
upturn 29
29 April
April 2010
2010
PricewaterhouseCoopers
PricewaterhouseCoopers Slide 10
Slide 10
Lessons from previous recessions

‡ Successful companies prepared themselves strategically during the good

times

‡ Cost cutting and market-share expansion can occur simultaneously

‡ Profitable internal growth favoured over acquisitions

‡ Bargain assets can be acquired and should be pursued

‡ Costs should be selectively reduced and expenditure delayed or eliminated

‡ Explore innovative perspectives on existing customer relationships

‡ Successful companies took actions not taken by others

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 11
Where do we go from here ?

‡ Economic cycle is moving as expected

‡ Recession will end and growth will return
‡ Latest economic forecasts for Irish GDP growth in 2011:
í PwC Irish Economic Outlook March 2010 ĺ 1.8%
í ESRI Spring 2010 Quarterly Commentary ĺ 2.5%
í Central Bank April 2010 Bulletin ĺ 2.8%
í IMF World Economic Outlook April 2010 ĺ 1.9%
So««.
Time to start planning for the upturn.

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 12
Navigating the upturn - 10 fundamental priorities

‡ Challenge your business model

‡ Shift the leadership focus towards growth
‡ Challenge your high-performing talent
‡ Categorise revenue opportunities
‡ Reshape supplier relationships

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 13
Navigating the upturn - 10 fundamental priorities

‡ Invest in the product/service portfolio

‡ Target growth industries and markets
‡ Refresh your acquisition list
‡ Use market intelligence to identify
opportunities early
‡ Create your upturn plan and team

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PricewaterhouseCoopers Slide 14
Navigating the upturn ± Structure of an upturn plan
Products,
?ey Areas: Access to resources and
Top Talent capital Leadership Strategy capability
Competitive
Working intelligence, Equipment,
Objectives
capital, Strategy, existing people, supply
to consider:
Retain, attract, acquisitions, engagement, customers, chain, information
incentivise expansion capacity acquisitions systems
Prompts: Have you assessed What are your How much time What are you Do you have the right
your short-term and forecasted capital do you plan to doing to early resources to take
long-term resource needs for the spend on growth v identify upturn advantage of the
needs ? short, mid and cost containment? opportunities ? upturn ?
long term ?
Are you positioned How would you Do you have Have you imagined
to attract top talent Are you well design the criteria for any the product/service
from your positioned to competitor you acquisition that a competitor
competitors ? access additional would always considerations ? could launch this year
capital ? fear? that would severely
How will you Have you disrupt your business?
communicate your Have you How will you identified and
upturn plan to your assessed and encourage your closed all cross- Have you asked your
people ? optimised internal staff to bring selling gaps customers and
sources of forward among your suppliers ³how do you
capital? suggestions ? existing think we could run our
customers? business better´ ?

How to be the breakaway company in the upturn 29 April 2010

PricewaterhouseCoopers Slide 15