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In business cycle is like wave (up curve and down curve) ; why only few company are successful in downward trend of business cycle?

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Hi Rajarajan,

If you're refering to the up trends and down trends of the market, for example in a recession period, then the reason why only few companies do well in such periods is because there is less demand. With less demand, less money flows in the market from clients to suppliers. This problem is further compounded by Marketing. In a recession period, most companies tighten their belts and stop actively marketing themselves to save cost. Companies that perform well in a downward trend tend to take larger risks by increasing their marketing activities to stand out in the competitive landscape even though the amount of revenue they are making is lower than normal. This focuses more attention on them and theoretically increases the rate of growth they see as the precision dies down due to the compounded effect of marketing they invested in whilst everyone was quiet.

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Thanks Yanfeng Lee, I understand your view that top line decrease due low demand and low promotion is a contributing factor during down trend. I see some more additional perspective: Bottom Line , Cash Flow and Culture. With respect to Bottom line : Companies which are consistently reducing their operation cost, delivery cost. With respect to Cash Flow: companies which are consistently reducing their cash conversion cycle time. Last but not the least, these companies utilise the human capital as their biggest asset by nurturing and developing creativity and innovation culture at level of the organisation.

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The key here is working capital and access to cashflow. During a down cycle or recessionary period, companies that are in better tune with the business environment take actions to plan ahead and forecast their cashflow.

Operating businesses layoff least critical employees (often the biggest expense) and reduce expenses.

Startup founders must find an alternative source of cash (raise capital, find a job, credit card) or capital (expensive in Down cycles) but the core of all problems is available cash on hand.

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Thanks Pre Joshi, You are right cash management is the biggest difference.I would like to add, the operational efficiency of reducing cash conversion cycle would improve the company competitive advantage in the long run, result in better cash management and cash flow.

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The blog post is for the asking question and answers for the sessions with the profile of Rajarajan Tamilselvam as association for enterprise opportunity. In the business cycle, the wave is like the up and down curve with the company of https://www.bestessayservicereviews.com/ trendy business cycle in the downward and the advance matter.

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