Research Paper: Business Decisions Related to Trade and Specialization

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Business Decisions Related to Trade and Specialization You Would Recommend Based on the Effects of Future Global Conditions

Larson Inc. Business Decision Recommendations

Course of Action in Light of the Credit Market Evolution

The contemporaneous society is facing the challenges of the internationalized economic crisis. At the global level, most organizations have postponed investment projects and have developed and implemented more prudential approaches to business operations. Extrapolating this trend, it would be advisable for batteries manufacturer Larson Inc. To reduce its expenditures and instead focus on saving its financial resources. This period of economic downturn is beneficial for internal audits of the organization, such as:

Analyses of efficiencies and inefficiencies regarding positions, operations, machineries and so on Assessment of the means in which the past strategies have achieved pre-established goals

Assessments of internal budgets and their adjustment based on current needs.

In other words, just like most other economic agents, it would be advisable for Larson Inc. To delay any investment projects and instead restructure the company in a more efficient manner. This recommendation is not only constructed on the similar trend observed at a global level, but on the realities of the capital market. In this order of ideas, the credit market reveals decreasing values in most shares traded. This means that when Larson would attempt to gather resources through the issuing of shares, it would not be able to sell its stock at real and adequately valued prices. In a context in which the company was to use the respective funds to grow, and the share's value would increase, the value of the dividends would also increase meaning that the "interest rate" on the stock is far too costly. Additionally, the number of interested investors continues to gradually decrease.

2. Trade and Specialization Recommendations

In terms of trade, a first recommendation is that of using Germany as a distribution market, rather than one for production. Germany is a highly cost inefficient region. In 2008 for instance, the German employees were even registering higher incomes per capita than the American employees. This translates into a situation in which operating within the European country is not a sound business decision. Yet, since the products here are well sold, the company should continue to sell to this market, but move production.

In terms of the new destination for the manufacturing operations, Larson Inc. ought to consider China. Aside the cost efficiencies this region would offer, it would reveal yet another benefit -- that of constituting a large consumer base, with a population of over 1.3 billion, most of whom could be perceived as prospective buyers… [END OF PREVIEW]

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Business Decisions Related to Trade and Specialization.  (2010, May 22).  Retrieved November 22, 2019, from https://www.essaytown.com/subjects/paper/business-decisions-related-trade-specialization/143267

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