Business plan essay
Develop a plan to manage a corporation during a Business Cycle. It is assumed the company will be a for profit pure competitive company.
Stage One, as the Recession begins the demand for your product or services reduce substantially. You need to determine the Market Equilibrium, the Margin Cost= Marginal Revenue. Analyze the Total Revenue from a 5% reduction in demand and how you would drive your Revenue to cover the total Cost. Determine the price of your product and compare the peak price to the demand price as the economy slows. During the First Stage it has two back to back quarters of negative activity.
Stage Two, as the economy hits the Bottom level, another 5% reduction in revenue hits the company. Determine your cost, and Profit Margin to Price, Cost of Production and Profit. Determine how you will maintain your operation after the impact of an initial 5% reduction in demand, with an additional 5 %. Explore all possibilities of matching the Supply of the product or services with the Demand at a determined price.
The goal at this level should be to not only keep operating but to improve your market share and increase profit which can be used for new technology of capital goods which will make future cost cheaper and customer service improved. In addition, no employees should be fired to cut expenses.
Stage Three, as the economy begins to move out of recession based upon the Determinants of Supply and Demand as a pure competitive organization how will you invest funds to adjust to the New Expansion or Supply and Demand which would be a 7% growth from the trough. In addition, at this stage you should invest in capital goods for long term production.
Finally, how you would use the Principles of Macroeconomics to grow past the previous peak and develop a long term plan for a 3 % annual growth in Demand and the ability to Price and Supply this Demand to your customer base.
