Editor’s note: This article was first published in April 2011. It is a snapshot of that month, including IBEX-35 companies earning around 50% of turnover abroad, Telefónica studying staff cuts, and Pablo Isla as Amancio Ortega’s second-in-command; he became Inditex chairman later in 2011.
In times of crisis, our big companies have managed to position themselves even better and to weather the drastic situation the Spanish market is going through. Our leading business people keep repeating words such as innovation, distinctiveness, restructuring, hard work and common sense when it comes to growth.
According to the figures, only 3.8% of SMEs in Spain have an international presence; the rest are focused on the domestic market.
This weekend Mercadona was held up as an example: even though it has stayed in Spain and has not pursued any expansion abroad, the management and strategy of Juan Roig, the company’s chairman, have earned top marks.
The cost-cutting measures Mercadona has taken were very risky as far as consumers and suppliers were concerned, but in the end they paid off: the company has increased its turnover considerably and managed to bring its costs down.
By contrast, our companies listed on the IBEX-35 have earned around 50% of their turnover abroad, and in the case of Acerinox, as much as 90%.
They all agree that this internationalization policy has allowed them to diversify risk and to worry less about the state of the Spanish market, although they hope it will recover quickly.
All these companies now say that, within a crisis that has hit the whole world, Latin America has been the great opportunity for Spanish businesses.
Another company that has taken some unpopular measures to keep growing is Telefónica, which has put all its executives to work on ways to minimize internal costs as its profits in the Spanish market fall. Telefónica is studying the possibility of reducing its workforce and rewarding its executives.
Inditex and Santander are two of the companies that have positioned themselves best in this economic crisis, each in its own way.
Inditex keeps taking on staff, opening new stores in foreign markets and has made a triumphant entry into online sales, which is why Inditex, with its founder Amancio Ortega and his second-in-command, Pablo Isla, is an example of creating value, wealth and jobs. As for Banco Santander, it passes with flying colours on value creation as a company and profit growth, although it falls well short on other kinds of values.
And finally there is El Corte Inglés (Spain’s big department store group), a company that has shown it was not prepared to manage a crisis: its accounts have not been very positive, and if it does not look for new business models, the situation could get worse.
The message from our top executives is very clear: your business can grow in times of crisis. There is no single measure; it is a matter of finding the right balance between higher sales, lower costs and new markets.
Further reading
- 5 ways to grow your business
- The advantages of starting a business in a crisis
- Why new businesses fail
- How to be a successful entrepreneur
- Business ideas for 2011
Featured image: Carloss, CC BY-SA 4.0, via Wikimedia Commons.
