CEDAR RAPIDS, Iowa, July 26, 2012 (GLOBE NEWSWIRE) -- MainStream Management ("MainStream"), a global management consulting firm that specializes in financial advisory and performance improvement for middle-market companies, today released a report that forecasts an extended stagnated U.S. economy. The report, "Prospering in Constrained Economic Times," outlines the factors contributing to economic constraint and offers strategies for businesses to overcome stagnation. The report examines in depth the deleveraging of consumers and corporations, weakening consumer demand, and recessionary pressures resulting from uncertain government policies.
"The impact of the vast accumulation of debt is resulting in below average economic growth and a very high likelihood that multiple sectors will deleverage. The alternative is to continue to kick the can down the road, delaying the hard choices and creating an extended period of constrained growth, similar to Japan," said Joseph P. Patten, Founder and Chairman of MainStream. "Either way, it will be difficult for corporations to achieve the financial returns expected by investors. In a fast-growing economy, a rising tide will raise all boats. However, in a stagnated economy, individual corporations need to outperform to experience the same success," Patten added.
The MainStream report outlines several factors for economic stagnation: an economy constrained by three decades of debt accumulation; unsustainably high corporate profit margins; and lower levels of saving, spending and income growth at the consumer level. These factors will exert downward pressure on asset performance as labor costs increase, productivity growth slows, and government debt and tax policy remain a giant potential headwind. Taken together these factors create a 'perfect storm' for U.S. businesses.
"Over the past three years, U.S. businesses, and many of our clients, have successfully streamlined operations and shored-up their balance sheets to adjust to new economic realities," said Laurie Brunner, MainStream President. "Yet with the prospects of an economy remaining under stress, businesses must change the paradigm – from that of cost cutting to one of investing for growth. A vital first step is recognizing that growth is a structured process, and that a well-thought-out growth strategy offers the best chance of sustaining profits and improving valuations in continued tough times,"
Recommendations for Growth
MainStream recommends a growth strategy that is interconnected across all facets of a company's operations. Organizations delivering above-trend line performance should focus on allowing innovation to occur through a structured plan of growth that includes;
- A focus on the core competencies of the business,
- Customer demographics,
- Sales force effectiveness, and
- Pricing strategy.
To download a free copy of "Prospering in Constrained Economic Times, please go to http://www.mainstreammanagement.com/news-resources/reports/thought/constrained-economy/.
MainStream Management, LLC
MainStream Management is a global professional services firm with a record of creating tangible returns for our clients by developing creative strategies that address the unique financial and operational challenges of organizations across industries. Our priority is to help middle market businesses – their stakeholders, lenders, and private equity owners – realize their full potential by deploying a broad set of strategic, operational and financial solutions. More information about MainStream Management can be obtained at: www.mainstreammanagement.com.
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