Week 4 1 final draft for milestone two group project

Week 4 1 final draft for milestone two group project -...

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Running head: MILESTONE 2: BUSINESS RECOMMENDATIONS 1 Milestone 2: Business Recommendations Based on Economic Projections Paul Porras, Salih Besirevic, Jessica Hollinger, Gina Hall, Rachelle Matossian ECO/561 May 3, 2011 Michael Hebert
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Milestone 2: Business Recommendations Based on Economic Projections Larson Incorporated is an international company that has operated in America for five years and in Germany for over 15 years. They are a battery supplier in need of recommendations to ensure their future success. Positions on pricing strategy, non-price barriers-to-entry, and ideas for product differentiation will be considered. There are alternative courses of action to be explored to aid in the decision-making process. The upcoming business decisions to be made based on the projected economy’s stage in the business cycle and the projected macro-economic condition is a critical one because the United States market is presently operating at a deficit. (What do you mean by the U.S. Market is operating at a deficit? Do you mean the governent or supply and demand? Government can operate with a deficit; supply and demand is a mechanism.) Economic Futures With operations in both the United States and Germany, the future prosperity of Larson Incorporated is directly connected to the economies of each respective country. The same holds true for the battery industry. Economic reasoning asserts that for Larson, Inc. to plan and thrive in the battery industries of both America and Germany, it must project future economic possibilities. Economic possibilities could include inflation, a double dip recession, or stability . Projecting economic futures is theory based on “real-world behavior and outcomes” by the economic downturn. Future projections are measured on economic variables (,) such as (: ) inflation, unemployment and “fluctuations in real GDP” (Moffatt, 2011, p. 1). Low interest rates have caused a spike in commodities and food prices. Higher prices indicate an inflation caused by a decrease in the purchasing power of money. A rise in interest rates could cause a double dip
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MILESTONE 2: BUSINESS RECOMMENDATIONS 3 recession given the unemployment rates and current housing market (Money Map Press, 2011, p. 2). Business Week reports, “U.S. stocks rose, giving the Standard & Poor's 500 Index the fifth gain in six days, as the Federal Reserve renewed its pledge to stimulate growth with low rates and said a pickup in inflation is likely temporary” (U.S. Stocks Rally as Federal Reserve Signals Low Interest Rates , 2011 p. 1). If inflation proves to be temporary, the economy could be on the way to stabilization. Goldman Sachs predicts, “The world economy can expect another strong year of growth in 2011” and “ the United States can expect substantial acceleration in real GDP growth over the next two years to a 4%” (2011 Economic Outlook, 2011, p. 1). Using historical data provided by Trading Economics (GDP Per Capita, 2009, p. 1),
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This note was uploaded on 05/18/2011 for the course ECON ECON421 taught by Professor Night during the Spring '11 term at University of Phoenix.

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Week 4 1 final draft for milestone two group project -...

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