Essay: Macroeconomic Factors related to Recession
With the recession experienced worldwide, the U.S has not been an exception. The high recession has led to high unemployment rate implying that more and more people are loosing their jobs. This eventually implies that the disposable income per head is getting lower and lower meaning that the shopping styles will change. National income of a country determines the spending levels of that country. With low national income, spending decreases and this further decreases the sales of the country in consideration.
With the strong advertising and operating strategies applied at Wal-Mart Stores, Inc., it is very difficult for the firm to be negatively affected by the micro-economic factors. Although there has been recession in the U.S for the past few years, there has been improvement in the financial performance of Wal-Mart Stores, Inc. This implies that the strategies applied in this corporation are too strong to deal with the misfortunes that may occur. This means that the management of the organization is adequately prepared to deal with the negative economic factors. With the recession period still in place, the organization has ensured that it does not lay off its employees and in fact the employees are adequately compensated. Other ways of cutting production and marketing costs are put in place to ensure that costs are kept as low as possible. This can be evidenced in the organization’s move to change its packaging design on the toys marketed to lower the costs by $2.4 million annual shipping costs (Talley, 2009).