NEW ZEALAND BUSINESSES TOLD TO KEEP ON INVESTING

The more astute businesspeople have always known that when recession hits, the key to success is to keep on investing. The companies that don't pull through are the ones that curl up into a tiny ball and pretend that it isn't happening or the ones that sack their marketing team and slash the advertising budget.

This BusinessDay article by David Hargreaves explains exactly why New Zealand businesses should keep on investing. According to BCG managing director, David Tapper, history has shown that 'companies who reinvest in the face of a downturn tend to outperform those who return cash to shareholders or use it to repay debt'

Investing against the tide, whether that is organically- through sales and marketing, research and development, production, logistics and people-or inorganically, through mergers and acquisitions can lead to a company being in a better position than its immobile competitors.

Preparation is crucial when dealing with recession. According to BCG, companies that plan effectively for a downturn often find themselves in a position to increase market share and attract the best talent at a time when competitors are reducing head-count and delaying investments.