For a Firm to Survive It Needs to Know as Much About the Business Cycle as It...

For a blotto to survive it needs to know as much active the assembly line cycle as it knows about its markets. Discuss. The business cycle is a sequence of economic activities typically characterized by recession, fiscal recovery, growth, and fiscal decline. Some firms allow for be more than than vulnerable to changes in the business cycle because others, the extent of which depends on the income elasticity of demand for the firms products. For example the car industry and firms producing impertinently cars will be sensitive to the GDP as the demand for the products (the new cars) is super income elastic, in a boom period demand will increase as consumers income would have as well whereas in a recession, demand will fall as flock will have less money, an example of this is the current recession, UK new car sales have fallen 11.5% in January 2011, and Toyota winnings have fallen 39% however Toyota has had extra world-wide issues after it recalled millions of cars worldwide due to faults, on the other reach competitors much(prenominal) as Nissan and Honda have been hit by muted demand as well and havent had such issues compared to Toyota. These drops could have be anticipated or prevented if the firms had a more effective market planning and predicted the business cycle more effectively.

However its hard for a firm to get a line the business cycle as its quite haphazard and unpredictable, but is a sequence of four phases, if a firm can understand these phases; boom, recession, slump and recovery than it will be able to act in the most efficient federal agency for the situation, for example during a boom there will be increased demand which may result in firms utilising their exertion capacity to the plentiful but if a firm knows this is release to happen then it can plan to expand in time for it, another example is during a recession legion(predicate) business will fail so if a business and operate efficiently with cost cuts etc. then it may even emerge stronger and better. E.g. Zara, has cut costs by reduce storage to hardly anything as... If you want to get a full essay, order it on our website: Ordercustompaper.com

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