Milestone 2: Business Recommendations Based on Economic Projections (Assignment #7)
Team A
ECO/561
February 14, 2011
Big Drive Auto is a multistate car dealer of several manufacturers’ cars and trucks. Big Drive Auto is also in the business of selling the vehicles, associated services, parts for repair, and conducts a significant business in motor oil, coolant, and replacement tires. Team A has analyzed various sales data of Big Drive Auto as well as general economic data of the industry in which Big Drive Auto has been conducting business over the last 10 years. According to Forex:
Auto sales Auto and Truck Sales measure the monthly sales of all domestically produced vehicles. They are considered an important indicator of consumer demand, accounting for roughly 25% of total retail sales. Demand for big ticket items such as autos and trucks tends to be interest rate sensitive, making the motor vehicle sector a leading indicator of business cycles. (www.forex-brokerage-firms.com)
To ensure success and longevity in the auto business, Big Drive Auto must develop a plan to grow wisely and position itself for any of the possible economic business cycles. For Milestone 2, business recommendations are provided for three possible economic scenarios in the business cycle:
1. Alternative 1: Economic Expansion Scenario
2. Alternative 2: Economic Peak Scenario
3. Alternative 3: Economic Recession Scenario
4. Alternative 4: Slow Economic Recovery Scenario
Alternative 1: Economic Expansion Scenario
As the economy enters a growth stage, consumers will be ready to purchase more vehicles. Big Drive Auto will want to concentrate on the sales of their vehicles, to both individuals and businesses. The company will want to make sure that it maintains an excellent service component so that when the economy has a downturn it will have a good reputation in place so that customers will not consider going to another company for sales or service. How the business... [continues]
Team A
ECO/561
February 14, 2011
Big Drive Auto is a multistate car dealer of several manufacturers’ cars and trucks. Big Drive Auto is also in the business of selling the vehicles, associated services, parts for repair, and conducts a significant business in motor oil, coolant, and replacement tires. Team A has analyzed various sales data of Big Drive Auto as well as general economic data of the industry in which Big Drive Auto has been conducting business over the last 10 years. According to Forex:
Auto sales Auto and Truck Sales measure the monthly sales of all domestically produced vehicles. They are considered an important indicator of consumer demand, accounting for roughly 25% of total retail sales. Demand for big ticket items such as autos and trucks tends to be interest rate sensitive, making the motor vehicle sector a leading indicator of business cycles. (www.forex-brokerage-firms.com)
To ensure success and longevity in the auto business, Big Drive Auto must develop a plan to grow wisely and position itself for any of the possible economic business cycles. For Milestone 2, business recommendations are provided for three possible economic scenarios in the business cycle:
1. Alternative 1: Economic Expansion Scenario
2. Alternative 2: Economic Peak Scenario
3. Alternative 3: Economic Recession Scenario
4. Alternative 4: Slow Economic Recovery Scenario
Alternative 1: Economic Expansion Scenario
As the economy enters a growth stage, consumers will be ready to purchase more vehicles. Big Drive Auto will want to concentrate on the sales of their vehicles, to both individuals and businesses. The company will want to make sure that it maintains an excellent service component so that when the economy has a downturn it will have a good reputation in place so that customers will not consider going to another company for sales or service. How the business... [continues]
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"Milestone 2: Business Recommendations Based on Economic Projections (Big Drive Auto)." StudyMode.com. 02, 2011. Accessed 02, 2011. http://www.studymode.com/essays/Milestone-2-Business-Recommendations-Based-On-588154.html.
