TO:
FROM:
DATE: December 2, 2010
SUBJECT: Larson Incorporated’s Economic Future
This memorandum summarizes our recommendations for Larson Incorporated based upon foundational Milestones 1 through 3 and the predicated economic futures for Larson Incorporated. The recommendations include underlying attention to: pricing strategies, non-pricing barriers, business cycles, macroeconomic conditions, credit markets and affected global conditions over the next five years from previous Milestone research.
Description of Three Alternatives Economic Futures
Business cycles are alternating rises and declines in the level of economic activity, sometimes over several years (McConnell, Brue & Flynn, 2009). An understanding of cycles and their impact on Larson will allow Larson to react to changing economic conditions. The three alternative economic futures are recession, depression and expansion. (See Figure 1)

Figure 1
The rising and descending of the economy is reflected below for the months between Jan 2006 and June 2010 (The National Bureau of Economic Research, 2010). Understanding this data and preparing for future expansions and contractions enables Larson to sustain through recessions and build smartly during times of expansion.

Figure 2
Recession and Depression * Economic Future Recession is marked by a period of decline in total output, income and employment (McConnell, Brue & Flynn, 2009). There is widespread contraction of business activity to include a decline in real GDP and an increase in unemployment. In a depression or the trough of a recession, output and employment bottom out to their lowest levels. Business activities decline drastically, GDP decrease, and banks stop lending money. * Pricing Larson should expand into automobile green technologies to develop efficient low cost electric vehicle batteries and take