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

Page 1: Introduction

Listen to page 1

The first decade of the 21st century has been a rollercoaster ride for economic activity. Business confidence was high at the start of the millennium. This was particularly fuelled by the growth of the internet as a means of buying and selling. A lot of companies have developed websites and there has been a rapid increase in online purchasing. At the same time a number of countries opened up...
Read full page

Page 2: The business cycle

Listen to page 2
[audio= business cycle]

The national economy experiences periods of 'boom' and sometimes periods of 'bust'. In periods of boom most people tend to be better off. Businesses have full order books for their products so that sales and profits are high. At the same time there are high levels of employment. School leavers and graduates find it easy to get work with good prospects. However, history shows that the good...
Read full page

Page 3: Recession

Listen to page 3

The way to survive and prosper in a recession is to reduce costs, such as cutting out any waste activity and to out-perform competitors. In a recession: demand for company products and services falls jobs are lost in the economy many businesses cut down on their investment in new plant and equipment businesses close down. In Davis' mature markets there has been some decline in demand. The...
Read full page

Page 4: Recovery

Listen to page 4

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...
Read full page

Page 5: Boom

Listen to page 5

Sometimes a period of boom follows on from recovery. During this period people become very confident. If businesses provide the right goods to the market these goods will sell. Businesses can be confident that they will be more able to borrow money to invest and develop. Of course, there are different challenges which can arise in a period of boom. For example: firms might find it more...
Read full page

Page 6: Conclusion

Listen to page 6

The end of the first decade of the 21st century will be remembered as a period of rapid recession. During this time, many people have lost their jobs and famous banks and retail outlets have gone out of business. Businesses need to respond to the challenges of a recession. The key to riding out a recession is to provide high quality services that customers want and need. Davis provides a...
Read full page

Related: Davis Service Group
Case studies in Business Case Studies


You can download resources for this case study below


Subscribe to our business studies newsletter for current business news including lesson plans and activity ideas.