Study: Restructuring Survey Croatia 2009
The Financial and Economic Crisis – Impact and Opportunities in Croatia
In the last eighteen months the subprime crisis turned into a global economic crisis, the biggest one after the crisis from 1930. In the spring of 2009, Roland Berger Strategy Consultants therefore once again conducted a study on trends in restructuring, our third in Croatia since 2006 and fifth global since 2001.
We surveyed the directors and managers of approx. 40 Croatian companies from 13 different industries. The aim of the study was to find out how much and where the global economic crisis has affected the companies concerned and also where management sees the opportunities and risks.
Key findings from the study show that the crisis has not hit rock bottom yet, and credit crunch is exacerbating operating financing problems around the world. Therefore many companies, in Western Europe particularly, are planning to increase layoffs and focus on their core business. The crisis in Croatia caused investment crunch, sales decrease and worsening of customers' payment behavior. Croatian companies expect even worse situation in the future and recovery is expected to start from Q3 2010 or in 2011.
Above all machine & plant engineering, construction industry automotive/suppliers/traders are strongly affected by the crisis, and sectors which stayed widely untouched are pharma & healthcare.
Both globally and in Croatia there are difficulties in obtaining credits due to deterioration of credit terms. 96% of the companies report additional difficulties when applying for new credit. Consequently, companies are cutting costs at all levels, reducing investments and conducting sales initiatives. 44% of respondents will reduce personnel costs by 10% or more – by cutting extra benefits and lay offs.
Management commitment, fast implementation and strategic repositioning are the key success factors in restructuring. Participants see the crisis as a very good possibility to reduce their cost base, concentrate on core business and consolidate their markets.
Although the lowest point of the crisis is still ahead and operative financial problems are much more pronounced in Croatia than in other regions, crisis also offers opportunities. One of the key opportunities is cheap acquisitions, but it is not detected enough among Croatian companies. Possibilities for high unlimited growth are the matter of the past and companies have to focus on their key competence, market consolidation and profitability with acceptable risk.
Three key recommendations for surviving the crisis are insurance of short term liquidity, promotion of restructuring activities and strategic repositioning of the company.
In the last eighteen months the subprime crisis turned into a global economic crisis, the biggest one after the crisis from 1930. In the spring of 2009, Roland Berger Strategy Consultants therefore once again conducted a study on trends in restructuring, our third in Croatia since 2006 and fifth global since 2001.
We surveyed the directors and managers of approx. 40 Croatian companies from 13 different industries. The aim of the study was to find out how much and where the global economic crisis has affected the companies concerned and also where management sees the opportunities and risks.
Key findings from the study show that the crisis has not hit rock bottom yet, and credit crunch is exacerbating operating financing problems around the world. Therefore many companies, in Western Europe particularly, are planning to increase layoffs and focus on their core business. The crisis in Croatia caused investment crunch, sales decrease and worsening of customers' payment behavior. Croatian companies expect even worse situation in the future and recovery is expected to start from Q3 2010 or in 2011.
Above all machine & plant engineering, construction industry automotive/suppliers/traders are strongly affected by the crisis, and sectors which stayed widely untouched are pharma & healthcare.
Both globally and in Croatia there are difficulties in obtaining credits due to deterioration of credit terms. 96% of the companies report additional difficulties when applying for new credit. Consequently, companies are cutting costs at all levels, reducing investments and conducting sales initiatives. 44% of respondents will reduce personnel costs by 10% or more – by cutting extra benefits and lay offs.
Management commitment, fast implementation and strategic repositioning are the key success factors in restructuring. Participants see the crisis as a very good possibility to reduce their cost base, concentrate on core business and consolidate their markets.
Although the lowest point of the crisis is still ahead and operative financial problems are much more pronounced in Croatia than in other regions, crisis also offers opportunities. One of the key opportunities is cheap acquisitions, but it is not detected enough among Croatian companies. Possibilities for high unlimited growth are the matter of the past and companies have to focus on their key competence, market consolidation and profitability with acceptable risk.
Three key recommendations for surviving the crisis are insurance of short term liquidity, promotion of restructuring activities and strategic repositioning of the company.
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