{"id":27702,"date":"2018-01-25T08:53:57","date_gmt":"2018-01-25T16:53:57","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=27702"},"modified":"2018-01-26T06:28:08","modified_gmt":"2018-01-26T14:28:08","slug":"in-case-of-recession-dont-break-glass-expecting-the-unexpected","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/editors-blog\/2018\/01\/in-case-of-recession-dont-break-glass-expecting-the-unexpected\/","title":{"rendered":"In Case of Recession, Don\u2019t Break Glass: Expecting the Unexpected"},"content":{"rendered":"

\"\"Toward the end of 2007, economic indicators started to take a sharp, downward turn. It had been six years since 9\/11 impacted America\u2019s economy and psyche. While recessions have come and gone, with varying depths of impact, few prognosticators could have predicted the fiscal swoon of 2008-2009 would snowball into the Great Recession and paralyze business growth for years beyond its official end.<\/p>\n

Well, this year marks the 10th<\/sup> anniversary of the Great Recession\u2019s onset (we\u2019ll hold off on the party favors). Last summer, I pointed out an inconvenient truth: Since 1900, the United States has not experienced a 10-year period without a recession. Under President Obama, annual GDP growth remained under 3 percent\u2014the most sluggish period since World War II\u2014and some economists target the 2.1 to 2.3 range for 2018, 2019 and 2020, according to Bloomberg.<\/p>\n

To say that we\u2019re overdue for a recession, in and of itself, is hardly a reason for fear. Recessions generally come on the heels of strong GDP growth periods, which the U.S. doesn\u2019t appear to be embarking upon anytime soon. And we\u2019re not throwing shade at either side of the political aisle. However, since we appear to be in new territory when it comes to GDP growth versus past performances, perhaps all bets are off as to the conditions that could spur the next recession.<\/p>\n

The Technology Variable<\/strong><\/p>\n

Bill Melo, the chief marketing executive for Toshiba, believes that while the recession may have stymied demand, the proliferation of smartphones and the general movement toward digital alternatives have played a larger role in decreasing print demand. But belt-tightening economics has a way of causing individuals and businesses to re-evaluate investments.<\/p>\n

\u201cAnother thing driving device consumption down is MPS,\u201d Melo noted. \u201cWhen the recession hit, we told our customers that they had too many printers and MFPs. Toshiba was a pioneer in managed print and has therefore been the benefitted from customers adoption of managed print as we\u2019ve picked up lots of print volume from competitors. We replaced a lot of HP printers with Toshiba MFPs, but it\u2019s not a zero-sum game and the population of devices probably has gone down as the result of both better fleet management and reduction in pages printed \u2014you can see it in the revenue reports for HP and other OEMs. It\u2019s been a struggle for larger OEMs to keep up revenues, especially in the aftermarket side, because people are printing less. Companies like ours are gaining market share at their expense.<\/p>\n

\u201cIt may have been the recession that caused people to start wondering, \u2018Do we really need all this stuff?\u2019 But here we are, eight years later, still having that same thought.\u201d<\/p>\n

Where a recession or severe downturn would have the greatest impact, arguably, is in the realm of mergers and acquisitions. Nothing keys a buyer\u2019s market quite like the sudden influx of distressed assets, and depending upon a company\u2019s M&A strategy, it\u2019s either a clearance sale bonanza or a climate to avoid. On the latter count, companies like Visual Edge Technology would steer well clear of such an environment, as it exclusively seeks the best-available businesses for acquisition. But even a marginal recession could prompt an organization with a strong balance sheet to reconsider its technological investment strategy in favor of joining a more fortified dealer collective.<\/p>\n

Distressed assets, more often than not, have a way of finding a new home at buyer-friendly terms. Merger opportunities abound as well, with dealers finding strength in numbers to secure a better regional market approach. And when distressed companies knuckle under, it repopulates the availability of skilled employees. With unemployment figures currently at 30-year lows, this is no small consideration.<\/p>\n

The Economic Variable<\/strong><\/p>\n

A popular refrain from the Great Recession was that companies who were willing to invest in capabilities and infrastructure often made substantial headway in separating themselves from the \u201clet\u2019s wait and see\u201d competition that was reluctant to turn dollars loose in an environment that generally calls for belt-tightening. The worst of times, it follows, can bring out the best in companies positioned to take advantage of an opportunity\u2026even when the opportunity is shrouded in economic chaos.<\/p>\n

Not to sound a false alarm like Hawaiians experienced recently, but it\u2019s interesting to note that our industry has witnessed many new organizations sprouting up post-Great Recession\u2014companies that have no track record in the face of a downturn. As we continue to dive deeper into security threat-related issues, it\u2019s prudent to also ensure that your dealership is not only recession-proof but is also equipped to avail itself of opportunities that arise from unfortunate circumstances.<\/p>\n

Like a football team that can perform well in a foot of snow, if you can move the ball while others remain frozen, it will enable your firm to pull away on the scoreboard. And while we\u2019re on the snow analogy, asking you to consider the consequences of the next recession is akin to shopping for a snow blower in July. All I’m saying is to expect the unexpected…and be prepared for it. Thankfully, for now, the nation\u2019s economy seems to be garnering steam, despite continued low GDP growth rate.<\/p>\n","protected":false},"excerpt":{"rendered":"

Toward the end of 2007, economic indicators started to take a sharp, downward turn. It had been six years since 9\/11 impacted America\u2019s economy and psyche. While recessions have come and gone, with varying depths of impact, few prognosticators could have predicted the fiscal swoon of 2008-2009 would snowball into the Great Recession and paralyze business growth for years beyond its official end. Well, this year marks the 10th anniversary of the Great Recession\u2019s onset (we\u2019ll hold off on the party favors). Last summer, I pointed out an inconvenient truth: Since 1900, the United States has not experienced a 10-year period without a recession. Under President Obama, annual GDP growth remained under 3 percent\u2014the most sluggish period since World War II\u2014and some economists target the 2.1 to 2.3 range for 2018, 2019 and 2020, according to Bloomberg. To say that we\u2019re overdue for a recession, in and of itself, is hardly a reason for fear. Recessions generally come on the heels of strong GDP growth periods, which the U.S. doesn\u2019t appear to be embarking upon anytime soon. And we\u2019re not throwing shade at either side of the political aisle. However, since we appear to be in new territory when it comes to GDP growth versus past performances, perhaps all bets are off as to the conditions that could spur the next recession. The Technology Variable Bill Melo, the chief marketing executive for Toshiba, believes that while the recession may have stymied demand, the proliferation of smartphones and the general movement toward digital alternatives have played a larger role in decreasing print demand. But belt-tightening economics has a way of causing individuals and businesses to re-evaluate investments. \u201cAnother thing driving device consumption down is MPS,\u201d Melo noted. \u201cWhen the recession hit, we told our customers that they had too many printers and MFPs. Toshiba was a pioneer in managed print and has therefore been the benefitted from customers adoption of managed print as we\u2019ve picked up lots of print volume from competitors. We replaced a lot of HP printers with Toshiba MFPs, but it\u2019s not a zero-sum game and the population of devices probably has gone down as the result of both better fleet management and reduction in pages printed \u2014you can see it in the revenue reports for HP and other OEMs. It\u2019s been a struggle for larger OEMs to keep up revenues, especially in the aftermarket side, because people are printing less. Companies like ours are gaining market share at their expense. \u201cIt may have been the recession that caused people to start wondering, \u2018Do we really need all this stuff?\u2019 But here we are, eight years later, still having that same thought.\u201d Where a recession or severe downturn would have the greatest impact, arguably, is in the realm of mergers and acquisitions. Nothing keys a buyer\u2019s market quite like the sudden influx of distressed assets, and depending upon a company\u2019s M&A strategy, it\u2019s either a clearance sale bonanza or a climate to avoid. On the latter count, companies like Visual Edge Technology would steer well clear of such an environment, as it exclusively seeks the best-available businesses for acquisition. But even a marginal recession could prompt an organization with a strong balance sheet to reconsider its technological investment strategy in favor of joining a more fortified dealer collective. Distressed assets, more often than not, have a way of finding a new home at buyer-friendly terms. Merger opportunities abound as well, with dealers finding strength in numbers to secure a better regional market approach. And when distressed companies knuckle under, it repopulates the availability of skilled employees. With unemployment figures currently at 30-year lows, this is no small consideration. The Economic Variable A popular refrain from the Great Recession was that companies who were willing to invest in capabilities and infrastructure often made substantial headway in separating themselves from the \u201clet\u2019s wait and see\u201d competition that was reluctant to turn dollars loose in an environment that generally calls for belt-tightening. The worst of times, it follows, can bring out the best in companies positioned to take advantage of an opportunity\u2026even when the opportunity is shrouded in economic chaos. Not to sound a false alarm like Hawaiians experienced recently, but it\u2019s interesting to note that our industry has witnessed many new organizations sprouting up post-Great Recession\u2014companies that have no track record in the face of a downturn. As we continue to dive deeper into security threat-related issues, it\u2019s prudent to also ensure that your dealership is not only recession-proof but is also equipped to avail itself of opportunities that arise from unfortunate circumstances. Like a football team that can perform well in a foot of snow, if you can move the ball while others remain frozen, it will enable your firm to pull away on the scoreboard. And while we\u2019re on the snow analogy, asking you to consider the consequences of the next recession is akin to shopping for a snow blower in July. All I’m saying is to expect the unexpected…and be prepared for it. Thankfully, for now, the nation\u2019s economy seems to be garnering steam, despite continued low GDP growth rate.<\/p>\n","protected":false},"author":166,"featured_media":27703,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80,1650,82,1638],"tags":[348,2549],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/27702"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=27702"}],"version-history":[{"count":4,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/27702\/revisions"}],"predecessor-version":[{"id":27773,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/27702\/revisions\/27773"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/27703"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=27702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=27702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=27702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}