Page 125 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

organization, GM even adopted a policy that no more than 33
percent of parts would be manufactured internally. At both GM
and Chrysler, maintaining this flexibility provided the added
benefit of allowing them to easily shift production between dif-
ferent types of vehicles, enabling them to switch the focus to
their discount brands during the Great Depression.
Flexibility also emerged as an important contributor to suc-
cess during Japan’s Lost Decade. Many of the companies that
prospered outsourced production and developed flexible labor
structures. Clothing manufacturer and retailer Uniqlo was one
of the first clothing companies to outsource production to
China. It also increased its use of part-time and temporary
workers, thereby developing a more flexible labor structure and
making labor costs even more immediately variable. By 2003,
82 percent of Uniqlo’s labor force was accounted for by tempo-
rary or part-time workers, a far higher percentage than its
competitors.

■ PROTECT REVENUE ■
As many companies can attest, and as we have discussed, the
Great Recession has had a significant impact on consumer
behavior. Consumers are cutting spending on nonessential
items, deferring major expenses, buying products at promo-
tional prices, and shopping around to find the best deals—as
reflected in the large-scale consumer surveys BCG undertook
during 2009. More than 70 percent of respondents in the
United States, the European Union, and Japan said that they
were taking all these actions. As we observed in Chapter 2,
there has been a strong shift from trading up to trading down.

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