C-suite executives and other business leaders are planning for a period of soaring inflation, rising interest rates, a volatile geopolitical backdrop, and a slowing economy .
Over the past few years, they have been tested in battle, forced to adapt to a series of fundamental changes stemming from the Covid-19 pandemic, including supply chain and labor market difficulties. tighten.
WSJ Pro reporters and editors reviewed the cloudy economic outlook, examining how some of the largest and most successful companies are adjusting budgets and managing costs, approaching mergers and acquisitions, and acquisitions, loan adjustments, etc. We’ve looked at the steps companies are taking to prepare for tougher times and found that many are viewing this period of uncertainty as opportunities as well as challenges.
For example, US retailers are struggling to balance consumer expectations of discounts and the need for continued price increases to offset high inflation. The upcoming holiday season is likely to be challenging for some mid-sized retailers, which have seen sales slump due to growing inventories. It remains to be seen whether these chain has enough capital to beat the potentially disappointing year-end sales.
Meanwhile, some companies are embrace technology layoffs to find talent eliminated by the opponentand others are looking to renew contracts with suppliers on more favorable terms, among other steps. Real estate companies are looking for it expensive to hedge their floating-rate debt in the context of high interest costs, and even highly rated companies pursue term loans instead of bonds to save interest expense.
Consider the implementation of the global agreement. Mergers and acquisitions are slowing down as more companies navigate the unsettling business environment. In the first 9 months of the year, the published value Global M&A deals down 34%, according to data provider Refinitiv. But strategic M&A is still happening, even if at a slower pace, as inflationary forces and economic uncertainty spur rivals like Grocery store Kroger Co. and Albertsons Cos. combine to take advantage of more opportunities to cut costs or increase volume to better compete.
And the impact of the rapidly changing landscape extends beyond M&A and the United States. In Europe, the war in Ukraine is fueling inflation, food shortages and the prospect of a long, cold winter. German chemical manufacturer
hit with big energy bills this year, said it would downsize its operations permanently. In China, no covid policy adding an element of uncertainty as lockdowns continue to weigh on production and supply chains.
Here’s a guide to WSJ Pro’s coverage in recent months on how executives are addressing these challenges and approaching opportunities:
Business Finance
Financial executives and leaders have cut their jobs. Costs proved difficult to contain as inflation—even when it had already peaked—continued to rise. Financing costs are also escalating and it is becoming more difficult to get loans for some companies. A stronger dollar is making it harder for companies to hit their profit targets. And now, companies, especially in technology and related industries, are starting to implement layoffs. Here are some tips and ideas for CFOs, treasurers and others in the financial sector in navigating the chaos.
enterprise technology
Tech companies have performed well during the pandemic and in previous years, with the likes of
Apple Inc.
and
amazon.com Inc.
reaped a trillion dollar market valuation and strong profits. Now the tide is changing, reducing the market value of companies and leading to mass layoffs at companies including Amazon,
Meta . Platform Inc.
and
Lyft Coporation, group,
among others. But some companies are showing resilience, especially in the areas of cybersecurity, cloud computing, and automation. Here are some tips for CIOs and other technology officials in dealing with the challenges ahead.
logistics
While the impact of rising inflation and higher interest rates has been uneven across the economy, the logistics and transportation sectors have been hit hard as consumer demand shifts to services. and stay away from the goods. Cargo volumes plummeted and shipping costs rose as well, as a widely watched index measuring the average price to ship a 40-foot container fell to its lowest level in nearly two years. And it comes at a time that couldn’t be worse—peak season when business booms ahead of the holiday season. This is how logistics and supply chain managers can take advantage of a slowing market.
Marketing
Often, one of the first things companies cut back when the economy slows down is marketing budgets. While ad spend hasn’t dropped much, some companies have expressed uncertainty about the coming year, and major advertising agencies are predicting a slowdown in ad growth in the United States. in 2023. But in this unusual economy, where inflation affects households differently, many luxury goods companies are thriving and don’t feel pressure to cut. reduce marketing budget. This is how marketing executives can continue to sell their brands to consumers during difficult times.
Write to Brian Hershberg at [email protected]
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