BSG Tips – Economic Stages Part Two – Recession
In the last article I covered Boom Times, how they are caused, and what to do in the event of one. Pure boom times are very rare in the game because usually there is one smart competitor in the industry who wants to be significantly stronger and better off than everyone else. When several of these competitors hold that mindset and have an idea on how to win BSG, they will ultimately create a very competitive and aggressive marketplace. This sets the platform for a recession as prices begin to drop as competition heightens and it only takes a few aggressive companies to greatly expand their factories to create oversupply in the industry. As these factors go against the remaining companies, the death knell to the industry when exchange rates turn into the negative, this is a surefire sign to expect most companies to drop in points. In the above circumstances only the strongest will survive the recession and for some companies dropping in points means never gong back.
But are recessions truly good or bad? It’s a fact of life for sure and this is something that has to be dealt with. In boom times companies are more “buoyant” and there is an upward tendency for the whole industry. In a recession companies are more opt to sink, and this downward tendency may be used as an advantage.
In my personal views on how to play a recession is that all the companies must prepare for a massive “onslaught” and everyone is going to get hit. All the companies raises their shields and defenses to protect themselves and those who get hit will fall back, and those who can maintain their position or possibly even advance will benefit. A recession acts as a force against everyone, and if you can hold your own, it pushes everyone else back and the net outcome is that your company’s position has actually improved.
Sometimes the greatest fortunes are made in recessions.