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In this assignment I will compare the challenges the business will face in a time of recession and in a time of economic boom. Every business will try to overcome the challenges in different way that they think are the most effective. First of all, I would like to talk about the challenges, which Kingsbury face during this recession. People’s confidence in buying decreases and they tend to save money rather than spend. Because of that the business faces the challenge of how to stay profitable.
Most of the business will increase the price for their goods while Kingsbury took a different approach, which allowed for the business to attract more customers and stay profitable. The company reduced their products’ prices to stay more competitive in the market and attracted more customers and advertised their own brand ‘Kingsbury Basic Value’. What’s more, they have done a lot of promotion, because during the recession customers tend to spend less and buy only necessary goods.
So Kingsbury were promoting goods, which people don’t need, but when customers see discount on them they tend to buy it even if it is unnecessary. Another challenge that the company faced was staff redundancy, which allowed for the company to save money. In my opinion, Kingsbury in the near future will be changing the contracts – offering seasonal hours such as zero hour contracts. This would allow the company to reduce the employee number without breaching the law.
Second of all, during the boom the consumer’s confidence grows and the demand for the goods increase, so he business is able to recover quickly if it realizes what actions have to be taken. Kingsbury took a great approach during the recession, which allowed them to keep their customers, so during the boom the company were able to stay competitive without making a lot of changes. During the boom one of the challenges for Kingsbury was to promote ecological food, so the company invested a lot of money into healthy life style promotion.
This increases the company’s profit, because people with a high confidence tend to spend more. What’s more, the company had to meet the customer’s demand by increasing the employee number, so the company had a great opportunity to expand the company and attract more income into the business. Furthermore, Kingsbury would need to continue to promote the ‘Basic Value’ range to maintain customer loyalty. In my opinion, it would be useful for the company to introduce and promote ‘Luxury Value’ range products, which would maximize customer spending power and would increase company’s income.
Another great idea n times of a boom I think would be to cut costs in areas such as manufacturing and distribution. This would decrease the expenditure for the business and the company would have an opportunity to expand to new areas. Finally, I would like to say that Kingsbury overcome all challenges well and managed to keep the business profitable in a time of recession and in a time of boom. What’s more, the company chose a different approach to undertake the challenges than most other the businesses and it was successful. Overcoming Economic Challenges: Sunburst’s By Romantic