Depending on industry, a business may be greater or less susceptible to economic contractions (recession). An economic contraction is when demand and sales decline. The opposite of an economic contraction is expansion, an increase in the level of economic activity including goods and services available.
Industries more likely to be negatively affected by recession are construction, new-car dealerships, furniture, timber companies, and appliance sales. Businesses less likely to be affected by recession are accounting services, insurance, convenience stores, seafood companies, gaming, and medical facilities.
It is possible for some companies to prosper during economic contraction. It helps if they are strong financially going into an economic downturn because they may be able to self-fund or obtain financing to purchase equipment that adds efficiency, lowering their short and long term cost of operation for the purpose of making more money with equal or less sales. Additionally, companies with a superior cost of operation or other competitive advantage may be able to gain market share further increasing profits and contributing to an organization’s health. Market share is when own organization takes business away from a competitor.
Tribes may have a competitive advantage in business because in addition to enterprise operations, a Tribe’s resources can be made available to drive growth and prosperity. The critical element required to maximize success is planning to coordinate the allocation of a Tribe’s resources; the goal usually is to balance the service needs of a community with economic expansion –both utilize dollars.