Managing firms throughout the business cycle
A Davis Service Group case study

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Page 4: Recovery

A recovery takes place after a recession when for two successive quarters demand starts to pick up again. Recovery means that there is more money in the economy. Companies and people have more disposable income, so they can buy more. This generates additional demand for goods and services. This growth in sales means more income for investment in the business and more prospects of employment.

Market confidence in business is also very important in encouraging recovery. People have to believe that things are getting better to start investing again. Some businesses may be reluctant to take on new staff and take risks during this time, but those that do may be better placed to take advantage of rising demand as recovery continues. A strong business like Davis is able to take advantage of the recession. It may even consider taking over other businesses or competitors who may not be performing as strongly in order to enhance its product portfolio and competitive position.

The only certainty about the recession in 2008/2009 is that eventually it will come to an end. In order to be able to be ready for recovery Davis is taking steps to ensure that its business will be in good shape. These steps include investing in equipment, implementing more efficient processes and reducing costs.

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Davis Service Group | Managing firms throughout the business cycle