Econ 561 Milestone 1

Business Recommendations Based on Economic Projections

This week the assignment requires the team to make recommendations for a company to make business decisions based on potential changes that may occur in the economy over the next 5 years. The company that was chosen is Larson Inc., a German based company which supplies batteries for electronic equipment. Larson Inc. has operated in Germany for 15 years and extended operations in the United States 5 years ago. This paper will examine current operations and include recommendations for future operations.

Pricing Strategy Recommendations:

As Larson attempts to gain recognition in the United States, pricing strategies for the batteries that the organization produces must be reconsidered. Larson has operated in Germany for the last 15 years, and the ability for the organization to survive in that country is aided by the low number of competitors and the company’s advertisement efforts.

Larson’s entry into the United States 5 years ago, however, has been met with difficulties such as a slowdown of the economy and more competition than in Germany. The organization has not invested in advertisement efforts and packaging of the products offered is unattractive; although packaging for its German products are also not necessarily appealing, Larson’s television and magazine ads are entertaining, which may cover for the deficiency in appearance.

To be successful in the United States, Larson must implement a pricing strategy that is appealing to the consumer and helps the organization to recognition for the company in a new market. Roth (2010) introduces the prospect of penetration pricing, which involves an organization that is entering a new, highly-competitive market, to offer prices that are comparable, or lower, than its competition. The objective for penetration pricing is to increase market share, and once this is achieved and the organization becomes a household name, the organization will be...