Milestone 2

Larson Inc. Milestone One

Larson Inc. an international company has divisions in America and Germany. As an international organization, it has been in “America for five years and Germany for over 15 years” (University of Phoenix, 2010, p. 1), and has the opportunity to expand its market to Asia and Africa. Unfortunately, both divisions have incurred substantial deficits; however, the American division’s debt proves to be much worse than the division in Germany. Recent income statements have reported the organizations profits declined because of the impact from the economic recession. Current economic recession conditions have been the demise for many businesses globally, and Larson is one of many that need to make changes within their operations to survive. The company manufactures batteries for luxury items, but economic conditions have caused roadblocks that have made it difficult to profit under the current operating procedures. During times of recession, consumers spend less money on luxury items and focus on needs. Unfortunately, this has made an impact on the battery industry, for example, high unemployment; causes a decrease in the gross domestic per capita, and lowers the demand to purchase luxury items including batteries for them. Therefore, the executive team must focus on the current business strategy and re-define areas to remain competitive, and plan strategically over the next five years to survive the global recession. The following includes specific areas of concentration that the team must address: pricing strategy, non-price barriers, and ideas for product differentiation.

Pricing Strategy and Recommendations

In America, Larson Inc’s current pricing strategy includes lackluster packaging, and serious, but infrequent commercials alone for advertising. The troubled economy in America has in turn caused a major slowdown of the economy with banks in America struggling. A major downturn in the housing market as well as high unemployment rates in...