Milestone

Milestone II: Business Recommendations Based on Economic Projections

ECO/561

January, 17, 2011

Richard M. McIntire, PH.D.

Business Recommendations Based on Economic Projections

The business cycle is characterized by periods of both growth and decline in the economy. The ability to predict and respond to these fluctuations in a timely manner can be the ultimate determining factor of whether a business prospers, fails or is simply able to remain viable and survive market conditions. For the purposes of this analysis three economic cycles will be discussed in terms of there effect on Larson Inc’s future. These economic projections are recession, trough and expansion.

Recession

In simplest terms, a recession is characterized as a period contraction in which the economy is slowing down. This can be a very stressful period for organizations that are trying to keep their business afloat. However, a recession can also lead an organization to take the time to understand exactly where the organization has been and where it wants to be in the future. It can provide the opportunity to reevaluate goals and define a roadmap to achieve particular objectives.

Some of the ways an organization can ensure survival during an economic crisis is to implement a strategy for economic incentives. For example, a corporation should identify what specific challenges they face. In doing so, the corporation will be able to develop a strategic plan. The results of which can be monitored and adjusted in real-time so that mistakes can be corrected and determinations can be made as to what actions caused those setbacks.

According to economists, Travis J, Berge and Oscar Jorda, “the macroeconomic outlook is likely to deteriorate progressively starting sometime next summer” (Berge, Jorda, 2010).. Berge and Jorda (2010) further state, “any 24-month forecast in the future is subjected to change”. The Leading Economic Indicator...