Business cycle refers to the periodical (cyclical) changes in economic conditions and fluctuation in the regular business of economic growth (boom) to recession (depression). This term refers to the natural economic development fazes. Scientists have singled out that business cycle consists of 3 stages. The first one is “boom” and refers to the continuous growth of the economy after the reduction step until the release of a new high achieved measure would surpass in the previous cycle. The next is recession. Recession is a decline of business activity, and decrease in production, employment and income rates. The last one is recovery and it refers to the rise of economic activity, the growth of the market situation, the increase in production after the fall, which took place during the recession.
During the recession periods economy of the country slow down that prevents to the deficit, business bankruptcy, decrease of employed people, etc. There are two factors that decrease the recession effect on the Davis. The first is that company had different subsidiaries in different countries and when one currency devalued, at the same time subsidiaries in others became more valuable, that made balance for the company and helped to outlive recession period. The second one is about clear finance planning and controlling, it is about loans that can be taken from the bank.
Every company needs to have a plan what to do with the company, when the recession or recovery period will commence. Company need to prepare detailed plan for the strategy of quick reaction for the recovery. This period can bring lots of money for the companies that will ne available. The company and its managers should not be stunned by this information, they should be prepared to win this drive.
In 2007 Chemistry industry had set a list of measures that would help to decrease the business cycle effects. This list contains hedging, long-term contracts assignment, standards development and crafting, increase in production flexibility, new markets entrance, new customers attraction.
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