Let's Make It a Good Year!
Happy New Year!
2009 starts out in the middle of an unprecedented
worldwide depression. On the day when I wrote
this column, the United States for the first
time ever adopted a zero rate policy, effective
immediately. At the same time, the Federal Reserve
Bank (FRB) announced that it was considering
purchasing long-term national bonds and implementing
other "quantitative easing" measures to increase
the amount of capital available to the market.
The FRB made it clear that it would use all
possible measures to put a stop to the economic
slide, to try and turn the situation around
and stabilize prices.
In response to this, the Japanese interest rates
did an about-face, and the yen exchange rate
versus the U.S. dollar rapidly went to 88.63
and crossed the 87 yen line at about 4 a.m.
on December 18, Japan time. According to the
news, a rate of 86 yen on the New York market
also was within view.
The Obama government which will be inaugurated
in January is preparing large-scale economic
recovery measures on the order of several hundred
billion dollars. Under the banner of these financial
measures, it is hoped that initiatives for stimulating
demand, strengthening the financial institutions,
and shoring up the housing market will gain
traction. The question of when the U.S. economy
will rise out of this deep trough has a direct
bearing on the economic situation of the world
at large. Intensified international cooperation
is urgently needed to lift the market and head
towards a speedy recovery.
In any case, the U.S. has taken the first steps
to provide an economic boost. Once these manifest
themselves in increased consumer demand, the
effect will be felt in Japan as a major exporting
economy as well. However, the rapid rise in
the value of the yen is bound to put a damper
on things, which is why a complete economic
recovery in Japan may not happen before the
year 2011 and beyond.
It is clear that 2009 will present a difficult
challenge. The three-year stretch from now until
2011 will be the “positive” period. Under
these demanding conditions, an aggressive management
approach is the only way to survive. It is indeed
the time for an “animal” approach to business.
Even export-oriented businesses must look towards
strengthening internal demand these days. To
boost domestic marketing, that is the order
of the day. The consumers still have the money.
But their concern with security and reassurance
naturally tends to curb spending, and it also
makes people choose their purchase patterns
more carefully. As a result, people will of
course only want to buy things that they consider
really necessary and good for themselves. The
absolute turnover volume will decrease, and
statistic indicators therefore will show an
overall drop in consumption. But these figures
also comprise macro factors that do not necessarily
represent the latent desire in consumers to
make their life more enjoyable. Spending money
for aims such as strengthening family bonds
and increasing contentment on a personal scale
very likely is still considered special.
More and more people will opt to give up an
overseas holiday in favor of things such as
enjoying Blu-ray movies at home with the family.
As more time is being spent in the home, home
entertainment becomes increasingly important,
and home theater is a case in point. The idea
of the "two-way theater" is most viable in this
regard. However, as fewer people tend to come
to the stores on their own volition these days,
the vendors must take the animal approach. This
means that they must go and actively seek out
the customers, or they must organize events
that are attractive enough to bring the customers
to them and create the right opportunity to
close a sale.
In this economic climate, it is vital for businesses
to know the situation of their customers in
detail. Rather than merely exchanging new year
greetings, the industry as a whole must actively
get involved in actually making it a good year.