Strategy in Recession Spending or Not to Spend
In recession, spending / investment will gain more profit when economy are recovered
Objective
The purpose of this research project is to study the effects of investment or spending of the Hong Kong organizations during economic recession and try to prove that their profit will be increase higher than others which are less spend in recession when economy are recovered.
Introduction In past 10 years, Hong Kong has faced 3 times of economic recession. In 2003, Hong Kong faced SARS impacted the GDP in 2003 Q2 drop to -7.5% & finally turned back to positive GDP until 2004 Q1. In 2008, United State’s financial crisis turned to world-wide financial crisis. Hong Kong started to recorded negative growth of GDP until 2009 Q4. Now we are facing the downtrend of GDP due to the Europe’s national debt crisis. Our HKSAR Financial Secretary forecast Hong Kong’s GDP growth is 1–3% in next year, which down from over 6% of 2011. During the economic recession time, most of the companies show defensive posture, try to minimum their spending to keep them survival. However, some companies take these changes to increase investment & spending. They believed that during the economic recession, they can get a better opportunity for investing & spending, they can use less cost to expend their business as many others are in the defensive position. As the result, they will gain much more growth when the economy recovery is come.
Literature Review
Tellis and Tellis (2009) & Apaydin (2011) shown the definition of economic recession is two successive quarters of negative growth in gross domestic product (GDP). Economic recession are times of adversity for firms in which large banks fail, insurance companies tress, industrial goods’ sales plum, consumer demand shrink, retailers go bankrupt, and requests fir bailouts skyrocket (Apaydin,2011). In these ‘hard times’, managers are searching for competitive advantage strategies aimed at, not growth, but survival itself (Apaydin, 2011;
Objective
The purpose of this research project is to study the effects of investment or spending of the Hong Kong organizations during economic recession and try to prove that their profit will be increase higher than others which are less spend in recession when economy are recovered.
Introduction In past 10 years, Hong Kong has faced 3 times of economic recession. In 2003, Hong Kong faced SARS impacted the GDP in 2003 Q2 drop to -7.5% & finally turned back to positive GDP until 2004 Q1. In 2008, United State’s financial crisis turned to world-wide financial crisis. Hong Kong started to recorded negative growth of GDP until 2009 Q4. Now we are facing the downtrend of GDP due to the Europe’s national debt crisis. Our HKSAR Financial Secretary forecast Hong Kong’s GDP growth is 1–3% in next year, which down from over 6% of 2011. During the economic recession time, most of the companies show defensive posture, try to minimum their spending to keep them survival. However, some companies take these changes to increase investment & spending. They believed that during the economic recession, they can get a better opportunity for investing & spending, they can use less cost to expend their business as many others are in the defensive position. As the result, they will gain much more growth when the economy recovery is come.
Literature Review
Tellis and Tellis (2009) & Apaydin (2011) shown the definition of economic recession is two successive quarters of negative growth in gross domestic product (GDP). Economic recession are times of adversity for firms in which large banks fail, insurance companies tress, industrial goods’ sales plum, consumer demand shrink, retailers go bankrupt, and requests fir bailouts skyrocket (Apaydin,2011). In these ‘hard times’, managers are searching for competitive advantage strategies aimed at, not growth, but survival itself (Apaydin, 2011;
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