Why are diversification and marketing strategies not very useful survival strategies for building construction SMEs during period of economic downturn? What should be the best survival strategy in...

WRITTEN ASSIGNMENT        2
WRITTEN ASSIGNMENT
Table of contents
Introduction    3
Why Diversification and Marketing Strategies May Not be Useful Survival Strategies for Building Construction SMEs    4
Best Survival Strategy for Building Construction SMEs during Economic Downturns    5
Conclusion    6
References    8
    
Introduction
    The construction sector is vital to the expansion of economies all over the world because it generates employment, develops infrastructure, and boosts GDP. Yet, during times of economic downturn, such as recessions or economic crises, small and medium-sized firms (SMEs) engaged in the building construction industry encounter substantial difficulties. The existence of building construction SMEs may be threatened by these downturns since they may result in a decline in the demand for construction services, lower revenues, and cash flow issues. Although diversification and marketing tactics are frequently recommended as helpful business survival techniques during economic downturns, they might not be very successful for building construction SMEs. During a recession, these SMEs might not have the resources to diversify into new industries or markets, and their marketing efforts could not be successful given the weak demand for construction services (Khan et al., 2021). So, during a recession, building construction SMEs may need to switch up their survival tactics. The optimal survival strategy for such SMEs will be discussed, as well as why diversification and marketing tactics may not be effective during economic downturns for building construction SMEs.
    This report will explore why diversification and marketing strategies may not be useful survival strategies for building construction SMEs during periods of economic downturn, and what the best survival strategy for such SMEs should be. By examining the challenges faced by building construction SMEs during economic downturns and the strategies that can be used to address these challenges, this report aims to provide practical insights into how building construction SMEs can survive and thrive in a challenging environment.
Why Diversification and Marketing Strategies May Not be Useful Survival Strategies for Building Construction SMEs
    For a number of reasons, diversification and marketing techniques may not be effective for SMEs in the building construction industry to survive economic downturns (Alves et al., 2020). First off, during a downturn, building construction SMEs may lack the ability and resources to diversify into other markets or industries. There is a high probability that it may become difficult to procure the material during economic downturn. Diversification may be a time-consuming and expensive process that may call for a substantial investment in new machinery, training, and marketing. During a recession, when cash flow is tight and income is low, building construction SMEs do not have the financial means to invest in diversification. In addition, diversification calls for particular skills and...