Art 8

The Well-timed Strategy

The business cycle moves from a bright and healthy expansion and prosperous peak to a dark and often difficult recessionary trough and then back once again to prosperity.The fortunes of most companies literally ebb and flow, while some companies tumble down the trapdoor of bankruptcy, often never to rise again. So, too, is it that thousands of jobs are created in boomtimes while thousands more are again lost when things inevitably go bust. Overview of the key functional areas of marketing and pricing, production and inventory control, and human resourcemanagement, as well as risk management, the strategic implementation of capital expenditure programs, and the tactical timing of acquisitions and divestitures. The wheel spans virtually every major activity ofthe modern corporation. A careful understanding of this wheel will help any business executive team dramatically improve company performance.

Cutting capital expenditures in anticipation ofrecession is a prudent defensive strategy that preserves cash flow at a most opportune time. However, the most proactive of Master Cyclist executive teams also use the counter cycling of capital expendituresas a potent offensive weapon. This is done by increasing capital expenditures during a recession in anticipation of a recovery and renewed and surging demand. In this countercyclical way, MasterCyclists can position their companies to take the market high ground when the recovery begins.

The strategic and tactical implications of Master Cyclist marketing and pricing offer some of the richestinsights into building competitive advantage in all of management strategy the Master Cyclist deploys two other important risk management tools: business unit diversification and geographicaldiversification. Nothing can get a company into more trouble than ramping up an overleveraged capital-expansion program into the teeth of a recession. Such an overaggressive capital expansion creates large...