Knowing how to play offense and defense means that you can see business cycle rising trends before they occur—and can therefore get aggressive with your plans, pricing, and budgets (offense). You'll also be able to catch the weak spots of business cycle declining trends and protect your profitability, even though the economy will be going through leaner times (defense).
The business cycle consists of four Phases: A, B, C, and D.
During Phase A, the business cycle is advancing, the economy's momentum is on the upswing, and data that showed that the economy had been in recession is starting to turn in a positive direction. Figure 9.1 illustrates Phase A.
Companies can rely on two historically verifiable measures to spot this change and be confident that the business cycle is actually improving:
Early Phase A can be a confusing time. Although the economy shows encouraging signs, most decision makers are still pessimistic, fearful, and uncertain. Because ...