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Running Head: THE GREAT RECESSION: CAUSES & CONSEQUENCES1THE GREAT RECESSION: CAUSES & CONSEQUENCESNameDateCourse name and section numberUnit numberCase name
THE GREAT RECESSION: CAUSES & CONSEQUNCES 2Company & Situation: ALLCO Finance GroupAccording to Keynes economics, the world economy undergoes periods of ‘booms' and recession. Economic boom periods are characterized by an increase in investment, industrial output, an increase in exports and other parameters that contribute to a country's output. On the other hand, recession marks a period of significant economic decline that spread across all aspects of the economy. These include the real GDP, real income, employment, industrial output, and others. One of the major companies to have been affected by the recession is Allco Financial Group. The Australian company had been founded in 1979 to offer various financial and management services to companies in Australia, New Zealand, North America, and Europe. Presently the company invests in the shipping and aviation industry, infrastructure, financial assets as well as properties. At some point before the company was deemed for liquidation, the Australian stock exchange commission had reported the company to have about A $ 4.3 billion. Following the subprime mortgage crisis that hit the US home market, the company lost about 99 per cent of its share prices. Following this, liquidation was imminent. Event worse, before these incidents, the company had been under administration receivership due to difficulties in debt refinancing. These events leading to problems in the company's success can be only termed as environmental.Strengths Weaknesses & AlternativesALLCO Finance group has undergone a restructuring that has put it back on the success path. In fact, the company has been able to double its profits over the last fiscal years. The restructuring strategies include major diversification projects as well as mergers and acquisitions.For instance, there are plans to merge with Records Investment, enabling the company to compete with major financial market players such as Babcock & Brown. The diversified
THE GREAT RECESSION: CAUSES & CONSEQUNCES 3portfolio is one of the company's major strengths. This enables the company to survives ties of financial distress in the environment. Secondly, the company has a huge capital investment that