The current economic landscape is composed of a struggling U.S. marketplace due to the approaching fiscal cliff in 2012 and growing uncertainty of the country’s fate. The basic fundamentals and functions of the economy paused towards the end of 2012 due to the forecasted fiscal cliff which led to a small increase in revenue by the government through taxation. Despite small changes to fiscal tightening, the economy is still expected to be somewhat volatile until the end of 2013 where it is predicted to slowly gain stability. Deficit spending still continues while banks are lending more than they have in previous years. Unemployment is still very high as well as retail sales because consumers are less afraid to spend their money than before.
Globalization has become extremely popular over the last decade especially with increases and advances in technologies which has made it easier to communicate and execute product developments overseas. This method has encouraged leaders of corporations to reach out internationally and utilize less developed countries to benefit one another. With the current economic downfalls it is increasingly more appealing to resort to other countries for cheap labor and execution of products in the U.S. rather than use our own country’s workers and skills in order to save money.
According to the Bureau of Economic Analysis, during the fourth quarter of 2012 the U.S. experienced a real slowdown in growth due to lack of inventory investment and national defense spending as well as a decrease in exports. For the 2012 year, corporations experienced a profit decrease from 7.3 percent in 2011 to 6.8 percent. During the fourth quarter of 2012 nonfinancial corporations rose 2.3 percent and the rest of the world rose 5.6 percent while financial corporations in the U.S. dropped 0.8 percent. However, there was an increase in dividends in the fourth quarter to $124.3 billion compared to $12.8 billion in the third quarter. This increase, though, was attributed to accelerated payments that were anticipated for expected law changes for 2013 (Stewart & Aversa, 2013).
With an unstable economy and still somewhat fearful consumers it is critical to have strong and knowledgeable leaders in our corporations to help pick up the country’s path down a steep slope. Leaders need to have faith in the workers of its own country rather than make the mistake of outsourcing and relying on the cheap labor of other countries. Strong leaders with the confidence and trust to put business back into our country will help our unemployment rates as well as stimulate the amount of money flowing through our market. Knowledgeable leaders can help analyze and identify during our country’s recession what consumers really value. It is necessary to understand and be in tune with how consumers think and feel during these times and what marketing strategies will really reach out to them in the most effective way.
Although it is predicted that the end of 2013 will experience a slight lift in economic growth, it is ultimately dependent upon the relationships between consumers and corporations and how much they utilize each other.