Learning Team B
February 28, 2011
Big Drive Auto Memorandum
To: Big Auto Drive Executives
From: Learning Team B
Date: February 28, 2011
Subject: Business Recommendations based on Economic Projections
Our organization’s success is not only dependent on good business strategies and recommendations, but it is also dependent on the cycles of the economy. Big Drive Auto must strategically learn to balance and understand the current economic climate and to predict future economic alternatives. In order for Big Auto Drive to sustain its financial success, we must be prepared to tackle all economic scenarios. The three likely economic scenarios that Big Drive Auto could face in the future are economic recession, economic stability and economic growth/expansion.
Recession Issues and Strategies
One of the main and most likely scenarios Big Auto Drive faces is a recession. Because of today’s market, BDA will face a period of reduced economic activity in buying, selling, production, and a decrease in employment (McConnell, Brue, & Flynn, 2009). BDA’s concerns should deal with the unemployment rate. As of January 2011, the current employment rate is 9% (Bureau of Labor and Statistics). Because of the current unemployment rate, BDA’s customers will not have the disposable income to make elastic vehicle purchases. According to Lebreux, “Most consumer-oriented services industries are affected by recession because households tend to purchase fewer non-essentials when facing the uncertainties of an economic downturn” (2002, p. 3.2). BDA’s priorities will need to shift from car purchases to its service and products/parts departments.
BDA’s service and parts departments continue to be profitable and stabilize revenue. The below chart shows BDA’s service and repair revenue for the past 10 years. The steady pace of revenue over a decade illustrates the consistant and stable conditions of the service... [continues]
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