Memo Larson

To: The Larson Inc. Board of Directors
From: Team D
CC: Peter Oburu, ECO/561
Date: November 22, 2010
Re: Business Recommendations Based On Economic Projections
Team D is pleased to inform the board we have finished reviewing the results of the recent decisions made by Larson Inc.   Over the last several weeks Larson Inc. has made preparations to increase industry competitiveness. In Team D’s review, we noticed Larson Inc. consistently updates pricing strategies, non-price barriers, and product differentiation plans relative to the alternative economic futures forecast for the short-run (within the next five years).   These are all great first steps; however Team D intends to compliment these decisions in order for Larson Inc. to maintain industry lead. We offer the following recommendations as part of Larson Inc. business decision process, assisting with changes focused on possible economic conditions which may occur over the next five years:
• Use existing pricing strategy to continue to expand both in the United States and Germany to address the current markets/business cycles.
• Expand non-price barriers to entry to include patents and licensing of new ideas, unique cost cutting measures, and R&D (research and development).
• Enhance product differentiation by investing in new marketing concepts both locally and internationally.
Explanations are outlined below regarding these recommendations with supporting graphs and illustrations.
Pricing Strategies
Pricing strategies are contingent upon the economic conditions of commerce and consumer spending.   Business cycles and trends will dictate the best financial objective for the company’s longevity and future permanence.   The United States and German markets are the primary targets with emphasis on cost to product, consumption levels, and disposal income.   Set economic factors are as follows:
United States Market
• Peak: Propose to increase pricing with variable costs to $90 with a $40 fixed cost...