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 PricewaterhouseCoopers

29 April 2010 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 PricewaterhouseCoopers

29 April 2010 Slide 6

Some facts about recessions

Top Quartile

Company performance in the 2001 recession

20%

25%

Bottom Quartile
How to be the breakaway company in the upturn PricewaterhouseCoopers 29 April 2010 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 PricewaterhouseCoopers

29 April 2010 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 PricewaterhouseCoopers

29 April 2010 Slide 9

³Only when the tide goes out do you discover who's been swimming naked´
Warren Buffett, Berkshire Hathaway
How to be the breakaway company in the upturn How to be the breakaway company in the upturn PricewaterhouseCoopers PricewaterhouseCoopers 29 April 2010 29 April 2010 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 PricewaterhouseCoopers

29 April 2010 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 í ESRI Spring 2010 Quarterly Commentary í Central Bank April 2010 Bulletin So««. Time to start planning for the upturn. 2.8% 1.9% í IMF World Economic Outlook April 2010 1.8% 2.5%

How to be the breakaway company in the upturn PricewaterhouseCoopers

29 April 2010 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 PricewaterhouseCoopers

29 April 2010 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

How to be the breakaway company in the upturn PricewaterhouseCoopers

29 April 2010 Slide 14

Navigating the upturn ± Structure of an upturn plan
Key Areas: Top Talent Access to capital Working capital, acquisitions, expansion
What are your forecasted capital needs for the short, mid and long term ? Are you well positioned to access additional capital ? Have you assessed and optimised internal sources of capital?

Leadership

Strategy Competitive intelligence, existing customers, acquisitions
What are you doing to early identify upturn opportunities ? Do you have criteria for any acquisition considerations ? Have you identified and closed all crossselling gaps among your existing customers?

Products, resources and capability Equipment, people, supply chain, information systems
Do you have the right resources to take advantage of the upturn ? Have you imagined the product/service that a competitor could launch this year that would severely disrupt your business? Have you asked your customers and suppliers ³how do you think we could run our business better´ ?
29 April 2010 Slide 15

Objectives to consider:

Retain, attract, incentivise
Have you assessed your short-term and long-term resource needs ? Are you positioned to attract top talent from your competitors ? How will you communicate your upturn plan to your people ?

Strategy, engagement, capacity
How much time do you plan to spend on growth v cost containment? How would you design the competitor you would always fear? How will you encourage your staff to bring forward suggestions ?

Prompts:

How to be the breakaway company in the upturn PricewaterhouseCoopers

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