Research led by The University of Queensland has explained why some businesses not only survive crises like recessions, pandemics or natural disasters, but thrive, with periods of extreme growth.
Associate Professor Frederik von Briel from UQ’s Business School said some of the world’s most successful companies rose from obscurity to market leader during times of major societal instability.
“Crises are when normal societal functions often deteriorate,” Dr von Briel said.
“For most businesses this can mean financial struggles with higher costs and falling demand, but remarkably there are others that become what we call ‘extreme growth outliers’.
“Certain crises create unique opportunities for a select few companies by improving market demand, supply conditions, public attention and acceptance all at the same time.
“Crises that begin suddenly, have widespread impacts and last for a considerable period of time create the perfect storm for such extraordinary growth opportunities.”
The researchers looked at historical cases to try to explain how and why crises enable some businesses to defy otherwise universally adverse conditions.
“We found many examples over the past 100 years,” Dr von Briel said.
“Disney emerged as a powerhouse during the Great Depression as cinema offered temporary relief from hardship; the 1970s oil crisis triggered demand for Honda and Toyota’s smaller fuel-efficient cars; the Global Financial Crisis shifted consumer spending to budget-friendly options like Groupon and Airbnb; while COVID-19 pandemic lockdowns gave rise to Zoom and Uber Eats.
“Many success stories like these share common traits that made it possible for them to capitalise on these growth opportunities – flexible, expansible and distributable resources that allowed them to scale up.”
