Industry Responds to Tough Times—Acquisitions, Innovation Offer Hope

More than half (57 percent) of chief financial officers expect improved business conditions in 2010 although they are concerned about the shape of an economic recovery, according to a poll conducted by financial consulting firm Deloitte & Touche Inc.

Some 120 senior finance executives also noted in the same poll that they believe business leaders must continue to look for growth opportunities during these times through strategic acquisitions although they are uncertain about the type of economy in which they will complete those deals during the next few years.

“Perhaps the most significant uncertainty is the continuing fall-out from last year’s financial crisis and to see your company’s future the way you do and to keep confidence and trust for the road ahead,” said Barry Salzberg, Deloitte’s chief executive officer. “Getting through this period will also require managing receivables even more carefully and monitoring suppliers that may not have the resources to survive. Having a ready-list of alternatives for credit and components is a wise precaution.”

While the financial forecast is sobering no one can agree on what lies ahead. The Blue Chip Economic Indicators, which regularly polls America’s top economists, predicts that for 2010 Gross Domestic Product (GDP) growth will be 2.3 percent while corporate-profit growth will hit 8.5 percent.

“There are opportunities for cash buyouts and growth during the next six to 12 months and CFOs need to be prepared to take action and look for places to buy,” said Matthew Slaughter, associate dean of the MBA program at the Tuck School of Business at Dartmouth and a former member of the Council of Economic Advisers. “Strategic acquisitions will remain important for growth during these times.”

“In today’s economy, you do have to plan for the worst, hope for the best and still be prepared to quickly take advantage of opportunities that will allow you to grow, such as strategic acquisitions,” said Mark A. Buthman, senior vice president and CFO of Kimberly-Clark. “The past few years were all about excess. Now we have to get fit. We have to stay on top of basics like expenses, liquidity and debt ratings to be in shape so we can be agile enough to take advantage of opportunities to grow our business.”

Forty-three percent of the executives interviewed from the Deloitte survey also said ending the recession should be the top public-policy issue for the Obama Administration, followed by tax reform (19 percent), financial-system reform (18 percent) and health care reform (16 percent). About one-third of the respondents described themselves as “most concerned” about the shape of any economic recovery including the possibility of a double-dip “W” shape recovery or an “L” shape stagflation recovery. Further, 26 percent were most concerned about planning and budgeting in uncertain market conditions and 20 percent were most focused on the return of inflation.

Whether the forthcoming business climate will be robust or flat the industry has responded by coming forward with technical improvements and new products that can make a business more efficient and innovative and thus better to weather any continuing storm while providing newsworthy events your marketing staff can promote to clients and prospects.

Consider that high-quality color continues to become more accessible to the budget-conscious small business with the introduction of Xerox Corp.’s Phaser 6140 color laser printer. Priced at $399, it produces vivid color documents. Tools such as Adobe PostScript 3, Pantone color-approved simulations and Xerox color-correction technology are included to help manage color and ensure professional-looking color prints. “A small budget shouldn’t mean you have to sacrifice making a big impression,” said Rick Dastin, president, Global Product Delivery Group, Xerox Corp.