THE ACTIONS BEING TAKEN BY COMPANIES TO COPE WITH THEDOWNTURN IN THE ECONOMY11th DECEMBER, 2008INTRODUCTIONThe current market scenario reveals that most of the companies all over the world are facing a serious critical issue to cope up with the recent economic downturns. Australia being of such affected economies has probably enjoyed many years of sustained economic growth. Most of the businesses especially those which are not related to the mining industry are facing serious threats to survive and sustain in the difficult market situations. Combating multiple issues such as higher interest costs, rising oil prices, falling consumer demand, tighter credit and generally a slowing economy have affected the company’s rate of return to a massive extent.
The following discussion aims to highlight the current market trends in Australia and other countries and the various strategies and actions which are being taken by companies globally to cope up with the adverse market movements. An economic downturn in general is a particular phase of the business cycle which leads to a further decline of the entire economy in terms of growth and prosperity.
The particular characteristic feature of economic downturns is a decreased level of consumer purchases and in turns a reduced levels of production by the businesses due to decrease in demand. A company which has a prior established strategy to combat such threats does have numerous opportunities to capture the market share by attracting the customers from their competitor firms. Development of alternate and appropriate strategies can certainly help to cope up with the economic crisis. A realignment of the business structures with the current economic conditions can facilitate the movement of the business in the positive direction. Impact of Market downturn in Australia since last few yearsAustralia has been facing dificult condition from the last few years for instance in the year 2005, Australian Bureau of Statistics (ABS) labour force has released figures in September, which clearly show that the official unemployment rate in the country has soared upto 5.1 percent for the first time in the last five months.
The data reflected on the enormous number of jobs which are lost due to the economic crisis, 25,900 full-time and 16,500 part-time.
The total number of people in work has also been reduced by 42,300 to 10.022 million, with the largest drop of 25,600 in Victoria (Cook T, 2005). The current market position has revealed completely different figures from the past years. The latest Australian Bureau of Statistics figures support that there has been a strong rise in part-time employment but at the cost of full-time work. The full-time work fell by 9,200 people, while part-time has increased to 43,500 people. Though the unemployment rates are constant at 4.3 percent and the number of people searching for work has risen up from 7,000 to a massive jump to 487,900.
(Post Tagged, 2008). The current trends are explored by the Australian Prime Minister Kevin Rudd where he stated that fact that the entire world is facing the vicious cycle of deteriorrating economic growth and has urged the importance and dire need of taking major strategical measures to cope up with the situation. It has been forecasted by the Australian government that economy would continue to suffer slower growth and rising unemployment in the near future and also that to overcome the situation the government has decided to spend A$10.4 billion ($6.6 billion) on a stimulus package so as the economy keeps growing and does not land to a static state (Post Tagged, 2008).
A growth rate as slow as 2 percent in 2008-2009 is predicted in comparison to 2.75 percent earlier, with unemployment rates rising to 5.75 percent by mid 2010 from 30-year lows of fewer than 4 percent earlier in the previous year. Rudd in his speech clearly emphasized on the role of G20 as the most important mechanism in reviving up the fallen economies (Post Tagged, 2008).