Performance Management

Milestone 2: Business Recommendations Based on Economic Projections
ECO/561 Economics
Joey Barnhill
October 14, 2010

Larson Incorporated is an international organization operating in Germany, and America for more than 15 years. Larson makes batteries for electronic equipment, including everything from toys to cars to laptops.   The following is a discussion of three alternative economic futures for Larson Incorporated that may occur in the economy over the next five years.   The objective is to provide solutions for increasing revenue and for decreasing costs.

According to Investopedia (2010), “futures try to predict what the value of an index or commodity will be at some date in the future”.   (Strategies, para. 1).   Three alternative economic futures offered for consideration to Larson Incorporated include the number of competitors in the market, technological advances, and new products.

In terms of competitors in the market, Larson must strive to maintain a competitive advantage over other battery producers in the industry.   Presently, the economy is in a downturn; however, in the next five years the economy should stabilize.   As consumers have more available cash and cash flows into the battery industry, profits for Larson will continue to decrease because of added competition.   To avoid this erosion of profits, Larson must have an advantage over competitors or some form of barrier to entry to prevent competitors from decreasing market share, leading to continued loss of profits.

Growth of Larson Incorporated will be aided by investments in science, and other technological advancements.   In the next five years new technologies are expected to move beyond just the Internet; new technology will help create new products.   Technology is expected to accelerate innovative ideas as well as make workers more productive.

As Larson Incorporated strive to maintain its present market share with new technology and by erecting barriers to entry for other...