Tunji Faleye, in this article, takes a look at strategies brands/businesses can take to weather the storm during economic turbulence.
The Nigerian economy is currently navigating turbulent waters, with economic hardship and widespread uncertainty prompting a significant exodus of individuals seeking opportunities abroad. According to data from the NIS’s Migration Information Data Analysis System (MIDAS), a staggering 3,679,496 people have left Nigeria in the past two years alone. The breakdown shows that about 2,115,139 people left Nigeria in 2022, and another 1,574,357 left between January 1 and September 30, 2023.
This mass departure has resulted in a considerable reduction in the consumer base within the country, compounded by a substantial decrease in purchasing power among those who remain. Consequently, many brands are grappling with declining sales figures, with some reporting losses while others face dwindling performance.
For instance, MTN Nigeria Communications Plc recently announced its second consecutive quarterly loss, recording a loss after tax of N392.7 billion for the first quarter of 2024, despite a 32.0 percent increase in service revenue year-on-year, totaling N747.3 billion. Similarly, Nigerian Breweries reported an after-tax loss of N106.3 billion in its latest financial statement, a significant contrast to the N13.2 billion profit recorded in 2022, as highlighted by chief executive officer Hans Essaadi during investor discussions.
These challenges underscore the urgent need for brands/businesses to implement strategies to weather the economic storm. While some businesses have resorted to closing down or discontinuing products, others are exploring avenues for resilience and adaptation. Surviving economic adversity requires a whole lot of strategic decision-making capable of enabling business to withstand economic volatility.
To start with, relying on a single product or service can be risky during economic downturns. Nigerian brands/businesses should explore diversifying their revenue streams by expanding their product lines or offering complementary services. This diversification can help mitigate the impact of a downturn in any particular sector.
During tough economic times also, it’s crucial for Nigerian brands/businesses to review their cost structures and identify areas where expenses can be reduced without compromising quality or customer satisfaction. This might involve renegotiating contracts with suppliers, optimizing inventory management, or streamlining operations for greater efficiency.
It is imperative to understand that building strong relationships with customers is essential for Nigerian brands/businesses to survive economic hardship. Investing in customer engagement initiatives, such as loyalty programmes, personalized marketing campaigns, and responsive customer service, can help retain existing customers and attract new ones even during tough times.
Brands/businesses employing digital landscape will offers them numerous opportunities to reach a wider audience and optimize their operations. Embracing digital transformation initiatives, such as e-commerce platforms, digital marketing strategies, and online payment solutions, can help brands adapt to changing consumer behaviours and market dynamics. For brands and businesses that have not adopted this, it is advisable to go this route.
Brands/businesses should also understand that collaborating with other businesses, both within Nigeria and outside the country, can provide Nigerian brands/businesses with access to new markets, resources, and expertise. These strategic partnerships can also help brands pool their resources to overcome common challenges and pursue mutually beneficial opportunities.
Furthermore, Nigerian brands can leverage government support programmes and advocate for policies that promote business growth and economic stability. Engaging with industry associations and lobbying for regulatory reforms can help create a more conducive business environment for all stakeholders.
While global economic conditions may also be uncertain, Nigerian brands can find opportunities for growth and expansion within the local market. Understanding the needs and preferences of Nigerian consumers and tailoring products and services to meet these demands can help brands thrive despite external economic challenges.
Another thing that is apt at this time is to investing in innovation and research to position Nigerian brands/businesses as market leaders and differentiate them from competitors. Whether it’s developing new products, improving existing ones, or adopting innovative business models, a commitment to innovation can drive long-term growth and sustainability.
Finally, Nigerian brands should prioritize financial prudence and prudent risk management practices during economic hardship. This includes maintaining adequate cash reserves, managing debt levels responsibly, and seeking professional financial advice when necessary.
There is no doubt that by implementing these strategies and remaining agile in their approach, Nigerian brands/businesses can increase their resilience and improve their chances of surviving and even thriving during economic hardship.
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