South Africa is currently in a recession having gone through two successive quarters of contraction. Recessions can be scary times but as a whole we always get through them, the problem is some business and industries don’t survive or start their decline during a recession.
Industries that are in decline are the most susceptible to recessions as when a recession occurs they are normally the least able to respond since the are already facing strong forces against them.
Consider the video rental agency, they were a central aspect of many peoples lives as many people wanted to watch the latest releases at home. This kept the video rental shop busy and a made them a central point were many people would go to weekly to rent movies.
With the improvement of internet connectivity people started to download movies, legally and illegally, which resulted in people not needing to rent out movies. This resulted in a decline which was magnified during the 2008 recession and we can see today the industry is close to the end.
So what can a business do to improve their chances of surviving or even thriving during a recession? We will take a further look citing example in upcoming articles.