The world is not flat. Discontinuities characterize everything, and it is in inefficiencies and breaks in the general pattern that exceptions can always be found. This is true in both good times and bad.
Recessions are spiky. (So, too, stagnant recoveries.) Downturns hurt a lot of people, but not everybody. In fact, some people even thrive. Down economies are not all down. They are filled with peaks and valleys – more valleys than peaks, of course, but not a flatland of stagnation. As reviewed in more detail in our recent Future Perspective, Unlocking New Sources of Growth: How to Find New Value in New Places, finding peaks to climb is the way to thrive, not merely survive, during a recession.
Obviously, discount brands and retailers are ready-made to spike during downturns. But there are other peaks to climb – three in particular.
First is innovation. The well-worn list of innovative new companies that were launched successfully during downturns is proof aplenty that real breakthroughs always find a market no matter what. Adding to that are numerous academic studies confirming that innovation is the best way to protect existing brands during recessions. (The longitudinal research of Belgium marketing professor Lien Lamey, who has studied 20-30 year business cycles in Belgium, Germany, the U.K. and the U.S., is particularly instructive.
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