Downturn Strategy


The plan may include seeking a new business that in a downturn sounds like a terrible time to diversify. But if one has strong financial base diversification gives more stability because a down market in one product may be compensated for by another product.

Acquisition for organic growth is also an option that could result in rewards. In a downturn, valuations are pretty attractive for acquisitions that in future result in generating better rate of return on the capital employed.

Corporations may also consider hiving off its non-core business in time of a downturn in order to streamline core competencies. This will defintely improve its financial efficiency by effective use of capital.


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