Browse over 20 million
homework answers & study documents

ACC 561 Analyzing the Four Financial Statements

Type

Homework

Rating

Showing Page:
1/5
Acc 561 Week 4 Assignment Larson Inc
Larson Inc. must consider the alternative economic futures for their
industry. In any market, economic conditions will change over time. The
company must be able to adapt and change with the economy to remain
successful. The company needs to find solutions for the changing
economy to keep increasing their revenue and decreasing their costs.
The economy may go through a recession, expansion and peaks over
their years in business. Larson, Inc. needs to analyze the difference
scenarios and determine the best course of action for each type of
economic future. Also, the company must consider the economy’s stage
in the business cycle to make well-informed decisions.
Economic projections
The business cycle will have continual change and fluctuate over time.
History has shown us how the economy goes through peaks,
recessions, troughs, and expansion. It is important for all businesses to
understand the concepts of macroeconomics and how the business
cycle is affected. Larson, Inc. can plan for the changes to remain
successful and innovative. The business cycle is determined by the
changes in GDP or gross domestic product. The change in the GDP can
occur from economic reasons such as changes in demand, taxes and
interest rates. It can also change from non-economic reasons such as
war or natural disasters.
The company must be aware and analyze the different indicators of the
changing economy. The recession, in which Larson Inc. is currently
experiencing, is a normal part of the business cycle. It is said that fiscal
and monetary policies can help decrease the peaks and recessions of
the business cycle. The government would step in with fiscal policies.
The government can provide more funding for private sectors and cut
taxes to help stimulate the economy in a recession (www.frbsf.org).
Monetary policy is controlled by the Federal Reserve Board. This agency
can increase and decrease interest rates across the country to change
investing and spending among consumers and businesses. Both policies
show us how government spending and investing to help businesses fall
into and remain in the expansion phase of the business cycle. As an
international company, Larson Inc. will need to consider the economic
future for the United States and Germany. With the United States

Sign up to view the full document!

lock_open Sign Up
currently in a recession, the company must determine how to create an
upward slope toward expansion. In the current market of monopolistic
competition, the company needs to concentrate on their product
differentiation and advertising to go into expansion. In Germany, the
company also needs to expand their market to remain successful. An
oligopolistic market in Germany would allow Larson Inc. to work on
expanding their marketing and streamline their products.
Alternative Economic Futures
Larson Inc. needs to have contingency plans for all the market
projections over the next few years. The current recession is the largest
economic downturn the United States has seen since the Great
Depression, and thus less predictable than the mild recessions between.
If the current recession persists and expansion comes slower than
predicted, Larson Inc. should prepare to make adjustments to not only
survive, but to come out of the recession more capable. The first issue to
consider is branding. It is imperative that Larson establishes a strong
brand name and image if it is to compete with an ever growing field of
competitors, but while profits are down a full advertisement campaign is
not feasible. A modest marketing strategy based on packaging and store
signage will be an achievable first step in introducing Larson as a quality
product, and not just your standard battery. Larson Inc. should continue
the research and development of new products and improvements, but
limit those endeavors to developing technologies implemented in more
"necessity" items such as laptop computers and cellular phones. In fact,
the only areas to experience growth in consumer electronics in 2009
were Hi-Def DVD players, laptops, and LCD TVs (Savitz, 2010). Another
way to combat the recession and to maximize sales, Larson Inc. should
engage in perfect price discrimination, because the monopolist practicing
perfect price discrimination will produce a larger output than the
monopolist that doesn't (McConnell 2009). Larson can achieve this by
charging a premium price for the batteries while circulating discount
coupons directed at non-business consumers. This has the effect of
selling the batteries at a higher price to buyers with inelastic demand, but
also offering lower prices for the same product to more elastic buyers.
This strategy will help ensure that Larson Inc. continues to build a strong
brand image, and deriving the most sales from both inelastic and elastic
consumer segments.

Sign up to view the full document!

lock_open Sign Up

Sign up to view the full document!

lock_open Sign Up

Anonymous
Had to paraphrase some of the content but overall, really useful material.

Anonymous
Just what I needed… fantastic!

Anonymous
Use Studypool every time I am stuck with an assignment I need guidance.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4