But please, do a systematic analysis. It might be due to the fact that the market in which the company operates is down - a recession, or it might be due to the fact that new competitive products appeared in its markets, eating into our company's market share. Now, before we explore the possible successful reaction of a company facing such an unpleasant situation, why won't we first examine the more common case, the case in which a company is not responding immediately with some innovative actions. Yes, of course.
Cash is a necessary condition for a company.
If it has enough cash, cash is of secondary importance, but if it does not have enough cash, nothing else is important at all. In a market downturn the major driver is usually not profit but cash. Cash is drained very fast. And considering the amount of cash available for most companies it doesn't take very long and they must react to the revenue drop by reducing their operating expenses. I ignore his harsh tone.