Larson: Future Scenarios and Recommendations

Larson: Future Scenarios and Recommendations

The economic future for the global economy, let alone for Larson itself, is highly uncertain. One possible alternative future that Larson and other companies might experience is a very slow comeback of consumer confidence, leaving purchasing largely stagnant over the next five years. This would make price one of the most, if not the most, competitive feature for staple items such as batteries, while at the same time brand reliability and trust would also be important as these would also be factored into consumers' decisions regarding economic value. Such stagnation is somewhat likely to occur given the depths of the recession that the world is slowly climbing out of (or possibly still entrenched in); consumer confidence has been significantly eroded and it is likely that the effects of this erosion will continue to have ramifications even after the economy shows signs of recovery.

It is also possible that consumer confidence will build more quickly than anticipated in the above scenario, with a more positive outlook taking place due to the quick action taken by world governments and the record low interest rates set by many central banks, including the United States' Federal Reserve. The availability and affordability of capital, as well as the easement that these low interest rates have created for homeowners and potential homebuyers, could very well (as intended by the policy and interest rate makers) lead to resumed spending at levels near to what they were before the onset of the recession within a few short years. This is perhaps somewhat less likely, as the fears of another sudden collapse and continued unemployment will likely lead to larger savings rates and a lessened confidence. Still, enough signs of recovery could trigger a rise in spending.

A third and more dire economic possibility is the occurrence of another shock and drop in the world's economic markers, especially in the United States' stocks and securities markets, which was largely the trigger for the current recession. There are some that predict a larger economic crisis looms just over the horizon, and if this is truly the case then spending is likely to plummet still further, creating far greater competition and a lessened ability to do business. Most economic indicators and analysts, however, suggest that the worst of the recession has already passed, and many emerging economies -- notably China -- have not even dramatically slowed their economic growth, providing an impetus and momentum that was lacking in the other most notable recession of the industrial age, the Great Depression of the 1930s. This scenario, though still a distinct possibility, does not appear to have a likelihood eaul to that of either of the other two alternatives.