Five-Year Strategic Plan for Baderman Island Resort

Milestone 3: Business Recommendations Based on Economic Projections

ECO/561

Milestone 3: Business Recommendations Based on Economic Projections

Credit Markets

At present the fed has shown no desire to contract the money supply through its open market operations, increasing the reserve ratio or increasing the discount rate (McConnell, Brue, & Flynn, 2009). Moreover, the fed continues to employ the term action facility on a bi-weekly basis (McConnell, Brue, & Flynn, 2009). According to McConnell, Brue, and Flynn recent efforts made by the fed have helped banks maintain their reserve ratio despite reserve reductions in the wake of mortgage loan defaults. However, commercial lending institutions’ continued reluctance to loan is choking the size of the monetary multiplier leaving a smaller money supply available than the fed desires from its expansionary monetary policy. Despite the current fed policy there are few near-term inflation risks (Economic Cycle Research Institute, n.d.). As a result, our team assumes the fed has the latitude to continue with the existing expansionary monetary policy. As a result of the aforementioned fed policy, the credit markets will remain inexpensive and accessible in the near-term.

Explanation of Future Business Decisions

With credit market conditions in mind, our team continues to recommend expansion. Expansion will include the next phase of golf course construction as well as an investment in a long-term marketing strategy focusing on building brand recognition, additional programming for off-season activities as well as the implementation of a best practices program.

Trade and Specialization

The business decisions made for Baderman are focused on two areas, data and business intelligence. The data that has been reviewed confidently suggests that from a global perspective the hospitality industry will continue to rise. This data comes from a variety of sources including VISA which shows a 20% increase in...