Business Cycle by Aijaz Aryan

1. BUSINESS CYCLE
Presentation By:-
Aijaz Ahmed Rather
I.K.G P.T University

2. MEANING
 The business cycle is the upward and
downward movements of levels of GDP
(gross domestic product) and refers to the
period of expansions and contractions in the
level of economic activities (business
fluctuations) around its long-term growth
trend.

3. FOUR PHASES OF BUSINESS CYCLE

4. 1. Prosperity Phase
When there is an expansion of output, income,
employment, prices and profits, there is also
a rise in the standard of living. This period is
termed as Prosperity phase.
 The features of prosperity are :-
 High level of output and trade.
 High level of effective demand.
 High level of income and employment.
 Rising interest rates.
 Inflation.
 Large expansion of bank credit.

5. 2. Recession Phase
 The turning point from prosperity to depression is termed as
Recession Phase.
 During a recession period, the economic activities slow down.
When demand starts falling, the production and future
investment plans are also given up.
 3. Depression Phase
When there is a continuous decrease of output, income,
employment, prices and profits, there is a fall in the standard
of living and depression sets in.
The features of depression are :-
 Fall in volume of output and trade.
 Fall in income and rise in unemployment.
 Decline in consumption and demand.
 Fall in interest rate.
 Deflation.
 Contraction of bank credit.

6. 4. Recovery Phase
 The turning point from depression to
expansion is termed as Recovery or
Revival Phase.
FACTORS THAT SHAPE BUSINESS
CYCLES
 Volatility of Investment Spending
 Technological Innovations
 Variations in Inventories
 Fluctuations in Government Spending
 Fluctuations in Exports and Imports
 Monetary Policies

7. KEYS TO SUCCESSFUL BUSINESS CYCLE
MANAGEMENT
 Flexibility
 Long-term Planning
 Attention to Customers
 Objectivity

8. ENVIRONMENTAL
SCANNING

9. MEANING
 It is the process by which organizations
monitor their relevant environment to identify
opportunities available and threats affecting
their business.
Charactristics of Environmental scanning:
 Continuous process
 Exploratory process
 Holistic exercise

10. Factors affecting Environmental scanning
 Strategy related factors
 Environmental Factors
 Organizational factors
Need for Environmental Scanning
 To develop the broad strategies and to make the
long term policies of the firm
 To understand the transformation of industry
environment
 To make one aware of environment organization
linkage
 To anticipate the present and future threats and
opportunities for an organization
 To keep oneself dynamic in the management of
the organization

11. STEPS FOR ENVIRONMENT SCANNING
 Developing groundwork for scanning
 Estimating future business
 Comparing actual with projected results
 Refining the scanning

12. Thank You