Business_Recommendation_for_Larson

Business Recommendation for Larson, INC. ECON/561 February 9, 2011 Business Recommendation for Larson, INC. Several economic futures could affect the continued success of Larson Incorporated. The three we will focus on are: market boom, market crash, and market competitor. Market boom would be the most preferable and potentially profitable economic future. In such a future the types of products Larson sells would be in high demand and there would be an excellent opportunity to sell more units and generate more revenue, but Larson would be unwise just to sit back and hope for profits to roll in. Competitors in the market would have the same opportunities so it would be crucial for Larson to adjust advertising and pricing to be competitive. Being competitive and differentiating their product would be especially important during a market crash. Batteries would be in low demand and there would not be room in the market for many competitors. Larson may need to consider restructuring their business model, such as advertising, pricing, and target market to maximize profitability in such a tough market. Market competition is similar to a market crash in that positioning the company to be competitive is key. Larson would need to be innovative and look for new opportunities as well as using their established name in the United States and Germany to their advantage. Market Boom Within the next five years, Larson could incur a market boom that would positively affect their economic future. In the event of a market boom, consumer confidence will increase and banks should begin to lend more which will boost the economy. Wages should increase allowing consumers more purchasing power and more people will be able to spend more money on items that require batteries. Larson will be able to market to more customers establishing a larger loyal market base creating prosperity in the battery market. Increased prosperity will allow Larson to delve into spending more on research and development to increase their production efficiency as well as increasing the amount of products that they can provide to the public for consumption. In the event of this market boom, Larson should hire more specialized workers to enhance their products and increase their GDP of batteries. Additionally, Larson should expand its advertising to stay ahead of the competition. Larson should use this strategy in the United States as well as in Europe. Larson should keep expansion in the forefront of their business plan and make decisions that will allow the company to expand. Larson should look at finding additional partnerships that will utilize their batteries and establish a contract to become the main supplier for these brands for a number of years. Larson should also plan their budget to enable them to expand as well as conserve money for low economic times. Market Crash The United States credit market has shown growth over the years, but the economic crash in 2008 gives cause for concern. The crash affects global markets also but not to the depth of the United States. Concerns over unemployment in the World affects credit rates as well as household discretionary spending. Larson should protect its credit and cash on hand to achieve their business goals. Larson International’s ability to conduct business in the United States and European markets will suffer because of household debt and increased reduction in consumer spending. Throughout the globe economy’s are constantly changing, it is essential for Larson International to protect their assets. Recommendation for Larson International is to define its corporate direction, strategy, and make decisions on its capital to guard against another economic crash. Recommendations may also be altered based on the market crash in the economy. Even though Larson International is considering increasing their investment, the market could suddenly decline in the United States as it did in 2008. Larson International should have a plan that would cover their interest in the United States and European financial markets if this were to happen. If Larson International should experience a market crash, their investment would decrease and so would the company’s GDP and productivity. There are many contributing factors for market crashes around the globe, there for the recommendations for Larson International are essential to the company’s survival. Business Recommendation in Reference to Competitors Larson has a lot to consider in regards to the future existence of the company. As we mentioned before, a worthy competitor could have two different economic effects on Larson, Inc. We also indicated how competition can create a drive within a company to do whatever it needs to do to stay ahead. We recommend Larson to continue its efforts in segmenting their current market and demographics. We advise their support and marketing staff to pay close attention to specific details in reference to the competitors brand marketing, customer base, and costs associated with sales and marketing in the areas where they are weak as well as high for the battery industry and their brand. We advise Larson to reduce costs in areas where sales are strong and periodically increase spending to gain more consumers and strength in the areas where the brand is not as strong. We recommend an increase in advertising in conjunction with the support staff in those demographics that are weak. We would also advise a time line in reference to view statistics associated with how advertising has affected sales in the weaker areas. If the statistics don’t indicate an upward trend line then we would advise a competitive coexistence or abandon that area and focus on current strengths. Visual Representation Conclusion As the market crash in 2008 demonstrated, there are constant fluctuations in the economy. For Larson to remain successful in the long term it has to be flexible enough to adjust to changes in the economy. Based on the five-year economic projections for the three economic futures, Larson International can have plans in place to make sure they are ready for possible market crashes, booms, and competitors. With these plans in place gives Larson a distinct advantage in the marketplace, and following our recommendations may help the company remain competitive. Larson needs to monitor the economy constantly as well as their current business practices to ensure they are in a position to avoid pitfalls and seize any opportunities that may arise.