If you have followed the podcast of Mr. Jack Welch, you should have known his comment about the current economic crisis and its implication. He said that business will emerge differently when the economy recovered. I couldn’t agree more with Mr. Jack Welch. In fact, I believe that the current crisis will force business to change rapidly in the way the business is conducted. I predict that business will adopt and use technology to change the way business is done more rapidly and abruptly than before.
Let me deliberate a few points on the current condition.
With a tighter budget, companies will be forced into looking at online advertising. The cheaper alternative of online advertising will increase and eventually replacing traditional advertising as the main advertising medium. In addition, as more and more teenagers using various electronic devices, companies will look into ways to advertise online so that they could reach out to the younger generation.
With the decline in advertising sales in newspaper; newspaper companies will be forced to retrench its worker and the company might be forced into changing its business model towards online information service. With the bankruptcy of Tribune, more and more newspaper will adopt New York Times model.
The same goes to magazine, a popular computer magazine ‘PC Magazine’ had stop its print circulation and go completely online. I would predict more magazines would be forced to go online. The magazines that would be the last to stay are pictorial magazine such as fashion and home decoration magazine. Informative magazine such as Newsweek, Times and Businessweek will be the first to go online.
The retrenchment of journalists and writers from newspaper and magazine will force these writers to become independent journalist. The entry-level is very low for them to do their own journalism. Few of them might group together to provide online information service. More will adopt models like http://www.huffingtonpost.com where they aggregate online news and information from various sites and provide their own commentary.
Television companies will still stay in business but with the decrease in advertising sales, less successful companies will be closed. This means that fewer competition in the television business. With lesser advertising budget on the table, there will be intense competitive to keep the larger pie. In fact, advertising sale might hold steady for very good TV station with attractive programs. This is because with the shrinking budget, people will go out less often and prefer to stay in the home watching television. I do not think online services such as YouTube will take much business away from the television.
Advertising companies and even the most traditional ones will be forced into embracing online advertising. This means that those copy writers and graphic designers who do not have computer skills will be either force to adopt the technology or go jobless.
For publishing business, few publishers will be willing to take the risk of publishing books for the less established writers. Popular writers will still remain the publishers’ favorite because they constitute lesser risk in the publishing business. This means that there will be fewer books on the market. This will forced the up and coming writers to look at online book. The most obvious choice will be Amazon’s Kindle and some writer will explore options provide by http://www.lulu.com.
From the simple analysis above, it is obvious that jobs for the printing workers will not come back upon recovery of the economy. In fact, the whole printing industry might be downsized significantly. Eventually, there will be some good printing companies with good color printing skills and technology left. Online and web service companies will be the less expose to downside risk, if there is a drop in business, it will be much lesser compare to other business and they will likely be the first to recover when the economy recovers.
With the strong sales from online retailer like Amazon and Zappos and closure of Circuit City, online retailer is here to stay for good. This could spell troubles for traditional retail shop and also the real estate in the retail market when the economy recovers.
In order to survive the current economic condition and beyond, traditional retailer must give incentive for shoppers to travel miles to their retail outlet. Retailer should focus on personalize service and total retail experience, such that the shoppers would feel the trip worthwhile in comparison to online retail experience. Well, logistic companies such as FedEx and UPS should enjoy certain growth with the increase in online sales.
In general, companies will adopt cost saving practice or technology to be more efficient. This I think is the silver lining in the current crisis, companies will change the way business is conducted, technology adoption will be more rapid and the America economy will emerge stronger than ever.