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The firms that are growing despite the downturn.

The firms that are growing despite the downturn

Weak consumer demand because of the recession is hitting many companies hard. Think no further than international book and music retailer Borders Group, 60-year-old US airline Aloha and UK van manufacturer LDV Group, all of which have closed in the past two or three years.

Yet some businesses are enjoying strong and sustained growth, despite the downturn. In general, these are firms that have adapted to the tough economic times with clever management strategies designed to boost revenues.

World No. 1 soft-drink maker Coca-Cola is a case in point. In an interview with Harvard Business Review editor-in-chief Adi Ignatius, which featured in the October 2011 issue of Harvard Business Review, Coca-Cola chief executive Muhtar Kent reveals that he is seeking to double the size of the business in the next decade as it caters to the 1 billion people worldwide who are expected to join the middle class by 2020.

Coca-Cola's sales already doubled in the decade from 1997. Muhtar Kent believes that they can do so again - with revenues reaching $200 billion - because of growth in countries like India and China. Some 60% of the company's growth is slated to come from emerging markets.

Hand in hand with the growth strategy is a commitment to being environmentally responsible - a strategy designed particularly appeal to the young people the company is targeting. First, the Coca-Cola is committed to giving back a litre of water for each one it uses by 2020. Secondly, the business is expanding its use of biodegradable bottles partly made out of plants.

A second example of a business thriving despite the recession is German car-maker BMW. The company posted record revenues and after-tax profit in 2010 - the year in which it issued its highest ever shareholder dividends and became the best performing share on the German stock exchange.

In Vol. 39, Issue 6 of Strategy & Leadership, published in 2011, Gayle Avery and Harald Bergsteiner reveal that BMW only makes cars that customers have already ordered. This allows the company to scale production and working times up and down, depending on demand. Flexible work patterns offer employees the chance to bank additional hours in busy periods and draw on them when work slows.

BMW partners suppliers over the long term, learns from them and helps them to optimize their products and services to meet the automaker's own needs and standards.

The company makes ongoing training and development available to all staff members and favours promotion from within the firm to help to protect BMW's organizational culture. The business also shares its profits with employees.

Like Coca-Cola, BMW has ongoing environmental programmes. Sustainability principles apply throughout BMW's supply chain, in the design and operations of its products and processes and in having nearly all parts of BMW vehicles and production waste recyclable. Water and energy consumption have long been minimized during production, as has waste.

FordDirect, the online sales arm of Ford Motor Company; Zorch, a US provider of strategic brand management and promotional-product management; and PVC foam-board maker Foamex are three more businesses that have prospered in recession. Ramona Dzinkowski explains why in the October 2011 issue of In the Black.

The key to year-on-year growth of 40% in lead volumes to dealers for both new and used vehicles at Ford Direct has been the development of digital products and solutions for the dealership network, ultimately making it easier for Ford to serve its customers.

Zorch, ranked one of the fastest-growing private companies in the US, owes its success to simplifying procurement while ensuring product quality and good customer service.

Foamex, meanwhile, has succeeded in driving down costs in the short term and, in the longer term, will rely on new markets, product development and getting closer to the customer.

While many companies are becalmed, or worse, by the recession, large numbers of firms are turning the difficult economic circumstances to their advantage. They are using time-honoured principles of innovation, cost control, flexibility, customer service, quality and environmentalism to steal a march on their competitors.

Where does your business stand in the great scheme of things?