The economy: Managing through a downturn

Du Pont managers did not wait for some economist to tell them an economic downturn was coming, must less wait for one to arrive - the company has been preparing for a recession throughout the recent business expansion. All types of companies are taking an aggressive, preemptive approach to possible future hard times. The menu of strategies these companies have adopted to make themselves recession-proof includes: 1. cutting costs to keep margins up while competing aggressively on price, 2. targeting R&D spending on manufacturing-process refinements to hold down costs, and 3. investing in flexible manufacturing technology to profitably turn out product in ever smaller batches. Flexibility best serves the company that is quickest to detect an economic slowdown. Another strategy for succeeding in a downturn is to beat competitors to the market with new products.