Why a zombie economy?
The zombie economy is made up of half alive half dead banks, governments, consumers and companies staggering along, struggling to function in the new world.
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Zombie banks whose balance sheets are too weak to support sufficient lending
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Zombie governments whose finances are too stretched to sustain expansionary policies
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Zombie consumers whose wealth and spending power are too depleted to allow them to consume
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Zombie companies who are saddled with debt that they cannot comfortably service, impeding growth and investment
The impact of a zombie world on recovery
Business leaders are struggling to assess the impact of zombies on the economy, and it cannot be overstated. The zombies are set to create a vicious circle that prevents any rapid return to business as usual, and a recovery that feels more like a recession. Companies must prepare themselves to live in the zombie world and take radical action to reinvent their business models in order to survive.
The winners and losers in the zombie economy
The zombie economy will divide the business world into winners and losers. The winners are highly liquid and either fairly or over-valued. The losers are companies who are not liquid and are fairly or over-valued. There are challenges and opportunities for both.
For organisations to succeed and thrive in this difficult new economic climate, their leaders must take action now. While few businesses will find the next few years easy, some will be better placed than others. There are fours steps to thriving in the zombie world:
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secure liquidity
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create a portfolio of potentially winning businesses
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remodel each business to ensure that it can perform strongly in the new world
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(subject to the success of the first three steps) take bold action to stake out a massively enhanced market position in the new world.
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