Diagnosing the Crisis

Simon, Hermann

doi:10.1007/978-1-4419-0823-0_1

Hermann Simon²

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Abstract

In this first chapter the current crisis will be analyzed. Our goal is to give practical advice for managers and companies on how to fight and beat the crisis. Therefore we will focus on concrete issues related to everyday business matters. This book is very different from most other works in that it is not primarily concerned with the macroeconomic aspects of the crisis.

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Notes

1.
Geoff Colvin, “A Recession of Biblical Dimensions,” Fortune, February 16, 2009.
2.
“Billig lohnt sich,” sueddeutsche.de, February 3, 2009.
3.
Philip Grothe and Grigori Bokeria, “Internationale Wachstumsstudie: Strategien und Herausforderungen für Industrieunternehmen – Schock oder Wachstum trotz Krise?” Study by Simon-Kucher & Partners, Bonn, January 2009.
4.
Marcus Jauer, “Welt von gestern,” Frankfurter Allgemeine Zeitung, February 14, 2009, p. 40.
5.
Philip Kotler und John A. Caslione Chaotics: The Business of Managing and Marketing in the Age of Turbulence, New York: AMACOM 2009.
6.
Most experts date the beginning of the crisis to August 7, 2007. On that day, interbank interest rates took a giant upward leap of 70 basis points. The normal oscillation is within single-digit basis points limits.
7.
For a detailed description, see Nathan Lewis, Gold: The Once and Future Money, Hoboken, New Jersey: Wiley 2007.
8.
B2B stands for “Business to Business,” i.e., business between companies; B2C means “Business to Consumers.”
9.
Stefan Kooths, German Institute for Economic Research, April 18, 2009.
10.
“Fliegende Symbole der Verschwendung,” Frankfurter Allgemeine Zeitung, February 10, 2009, p. 12.
11.
A credit insurance covers the risk if a customer does not pay despite of delivery of the goods.
12.
Stephen Jay Gould, The Structure of Evolutionary Theory, New York: Belknap Press 2002.
13.
Interview with the author in Impulse, February 27, 2008.
14.
Hermann Simon, Hidden Champions of the 21st Century, New York: Springer 2009. Hidden Champions are little-known world market leaders with revenue below $4 billion.
15.
The equity ratio is the ratio of equity to total assets.
16.
“Caterpillar Posts Loss, Cuts Outlook,” WSJ.com, April 22, 2009.
17.
BITKOM, ITK market data, December 2008.
18.
Ekkehard Stadie, Hanna Jesse, “‘Lipstick Effect’ auch in der Mobilfunk industrie,” Simon-Kucher & Partners, Bonn, January 2009.
19.
“Wenig Hoffnung für die Chemie,” Frankfurter Allgemeine Zeitung, March 11, 2009, p. 13.
20.
See, for example, “Air Berlin: Mehr Passagiere und höhere Auslastung in 2008,” press release by Air Berlin, January 7, 2009.
21.
Nicholas Carr, The Big Switch: Rewiring the World, New York: Norton 2008.
22.
Financial Times, April 17, 2009, p. 8.
23.
“Kurzarbeit bei Lange & Soehne,” Frankfurter Allgemeine Zeitung,
24.
“Fliegende Symbole der Verschwendung,” Frankfurter Allgemeine Zeitung, February 10, 2009, p. 12.
25.
“Billig lohnt sich,” sueddeutsche.de, February 3, 2009.
26.
“Ein ketzerischer Vorschlag,” Financial Times Deutschland, February 12, 2009, p. 15.
27.
“China stemmt sich gegen die Krise,” Zeit Online, February 2, 2009.
28.
The gross domestic product of China in 2008 was 30.067 trillion Yuan (about $3,900 billion); cf. “China’s GDP grows 9% in 2008,” Xinhua News Agency, January 22, 2009.
29.
In early 2009, the German government started a program where anyone who owns a car that is nine years or older, scraps it and buys a new car receives 2,500 Euros, which corresponds to $3,250.
30.
“Cash for Clunkers,” Time, August 17, 2009, p. 18.
31.
“Die Kurzarbeit ist ein teures Werkzeug”, Interview with Franz Fehrenbach, CEO of Robert Bosch, Frankfurter Allgemeine Zeitung, March 14, 2009, p. 16.
32.
“Abwrackprämie erzürnt den Handel,” Handelsblatt, March 6, 2009.
33.
In November 2008, the author and a high-ranking government official recommended that VAT be canceled Germany for one entire month. This measure would probably have had massive effects. However, it would have had to be implemented in the entire European Union, where a minimum VAT of 15% is dictated by law. This is why the U.K. lowered its VAT to “only” 15%.
34.
“Wir erleben die finanziellen Symptome eines Weltkriegs,” Interview with Niall Ferguson, Frankfurter Allgemeine Zeitung, February 24, 2009.
35.
“Die Krise vernichtet die Wirtschaftsleistung eines Jahres,” Frankfurter Allgemeine Zeitung, March 10, 2009, p. 11.
36.
ibid.
37.
“Wir erleben die finanziellen Symptome eines Weltkriegs,” Interview with Niall Ferguson, Frankfurter Allgemeine Zeitung, February 24, 2009.
38.
Geoff Colvin, “A Recession of Biblical Proportions,” Fortune, February 16, 2009, p. 15.
39.
“Kampf der Krise,” Bilanz, February 2009, p. 29.
40.
“Währungsreform als radikalste Folge,” General-Anzeiger Bonn, March 7, 2009, p. 9.
41.
Otto Graf Lambsdorff, “Enteignung: Nicht Ultima Ratio, sondern Offenbarungseid,” Frankfurter Allgemeine Zeitung, March 4, 2009, p. 12.
42.
“Schluss mit depressiv – Betrieb verbietet ‘Finanzkrise’”, n-tv.de, January 27, 2009.
43.
The German government expects a decline of 2.3%, the German Institute for Economic Research −3%. Uwe Angenendt, Chief Economist of BHF-Bank, thinks a decrease of more than 4% is possible. Cf. “Harter Abschwung kostet viele Jobs; Experten rechnen für 2009 mit einer stärkeren Rezession und höherer Arbeitslosigkeit,” Berliner Zeitung, February 17, 2009, p. 9, and “Japans Wirtschaft im freien Fall,” Financial Times Deutschland, February 17, 2009, p. 1. Professor Norbert Walter expects −5%, cf. “Der Verfolgte,” Frankfurter Allgemeine Zeitung, February 24, 2009, p. 16. Joerg Kraemer, Chief Economist of Commerzbank, even talks about −6 to −7%, cf. FAZ.NET, March 23, 2009. Similar declines are expected for other countries: France: at least −1%, USA: −2%, Russia: −2.2%, England: −3.6%, Japan: −3.8%.
44.
“Frankreichs BIP schrumpft um 1,2 Prozent,” Capital.de, February 13, 2009; “Russlands Wirtschaftsministerium senkt erneut BIP- und Industrieprognose”, RIA Novosti, February 17, 2009; “China verkündet Wachstumsziel von 8 Prozent”, Spiegel Online, March 5, 2009; “United Kingdom at a Glance: 2009–10,” Country Forecast Select, Economist Intelligence Unit, February 11, 2009; “United States at a Glance: 2009–10,” Country Forecast Select, Economist Intelligence Unit, February 4, 2009; “India at a Glance: 2009–10,” Country Forecast Select, Economist Intelligence Unit, February 2, 2009; “Economic Data Japan,” Economist Intelligence Unit, February 17, 2009.
45.
“Die Krise vernichtet die Wirtschaftsleistung eines Jahres,” Frankfurter Allgemeine Zeitung, March 10, 2009, p. 11.
46.
“Deutschlands Ausfuhr ist um 20 Prozent gefallen,” Frankfurter Allgemeine Zeitung, March 11, 2009, p. 11, and “Exporteure erwarten stärksten Einbruch seit 60 Jahren,” Spiegel Online, March 24, 2009.
47.
“Maschinenbau erhält drastisch weniger Aufträge,” Frankfurter Allgemeine Zeitung, March 5, 2009, p. 11.
48.
“Das Geschäft brummt,” Die Welt, February 26, 2009.
49.
“Infineon startet Geschäftsjahr tief in den roten Zahlen,” Associated Press Worldstream – German, February 6, 2009.
50.
“Gut gemeint, schlecht gemacht”, Interview with Christoph Schmidt, Wirtschaftswoche, February 9, 2009, p. 25, and “Harter Abschwung kostet viele Jobs; Experten rechnen für 2009 mit einer stärkeren Rezession und höherer Arbeitslosigkeit,” Berliner Zeitung, February 17, 2009, p. 9.
51.
The German Minister of Finance, Peer Steinbrueck, in a policy statement on the situation of financial markets said to the German Parliament on September 25, 2008, “The world will never again be as it was before the crisis.”

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Simon-Kucher & Partners, Haydnstr. 36, 53115, Bonn, Germany
Hermann Simon

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Simon, H. (2010). Diagnosing the Crisis. In: Beat the Crisis: 33 Quick Solutions for Your Company. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-0823-0_1

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DOI: https://doi.org/10.1007/978-1-4419-0823-0_1
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4419-0822-3
Online ISBN: 978-1-4419-0823-0
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