11/19/2008 1:17:00 PM
It’s the economy, stupid
If ever there was a time to bring out the rubbish that you’ve been hiding in your business, this is it. There is frankly no shame – or surprise – when any company unveils poor trading figures given the current parlous state of the economy. It will quickly become yesterday’s news as a bigger company announces bigger losses, or bigger job cuts.
So you only reached a fraction of your forecasted sales volumes, so your company undershot its profit target for the quarter, a ready-made explanation is at hand. Many CEOs have simply responded with: ‘Look over there, there are 100 year old financial institutions with billions of pounds of turnover collapsing, and you think it’s bad here.’ The realisation has been made that this Christmas will be a wash-out in the mobile industry, with many companies reportedly sweating over whether they have picked the right product ranges and find themselves staring at stock-filled warehouses. The only consolation is that they aren’t the only ones, and it is forcing many to redefine the meaning of success in the context of this climate. How effective a company is at battening down the hatches could be as good an indicator as any.
Dropping the ‘R bomb’ (recession) as an explanation for operators’ poor performance (as at least two are known to be doing internally) would be entirely plausible were it not for the performance of O2. It has managed to ride the economic climate, and caused a real problem for operators attempting to attribute their shortfalls to the economy.
O2 is simply at the top of its game at the moment, continually pulling away from Orange and Vodafone. 2009 will make for fascinating viewing on how, and if, it continues to extend its lead in the face of the Orange turnaround plan under Tom Alexander and Vodafone’s new UK CEO, Guy Laurence.