08 Analyse how an economic recession could impact the objectives of a house-building company

[Sir Afzal Shad]

08 Analyse how an economic recession could impact the objectives of a house-building company. [3]

[Shaliza khawaja]

consumers have less disposable income which may delay buying a house
for example a house building company would have fewer property sales and and more cancelled orders as people prioritize essential spending
this forces the company to shit there objective from growth to mazimizing profit, so that they can survive this period of recession and not face financial risk, if they fail to adapt they might have to layoff employees or even go out of business

[shamaim shakeel]

Knowledge Point:
An economic recession could impact the objectives of a house-building company because people have less income and are less likely to buy new houses.

Application:
For example, a company like GK Home Construction might see a big drop in sales as customers delay buying property due to job losses or lower earnings.

Analysis:
With fewer buyers, the company’s profits will fall, making it difficult to meet growth or expansion goals. To cope, the business may change its objective from growth to survival by cutting costs and delaying new projects. This shift helps the company stay stable during the recession and be ready to grow again once the economy improves.

[Mahnoor satti]

[KN] During recession consumers income falls which will result in a fall in demand for the house.
[APP] For instance this will lead to the building company to face difficulties to sell newly build house
[AN] Which may result in them changing their objective of profit maximisation to survival moreover in recession bank become less willing to lend company ehich leads to them facing difficulties to pay their expenses which may results in delay in futuer projects .

[Subhan Zafar]

{KN}During a recession, people have less disposable income, which lowers demand for new houses.
{APP}For example, during an economic recession in Pakistan, many people may face job losses or salary reductions, meaning they have less disposable income to spend on large purchases like new houses. As a result, a company such as Bahria Town could experience fewer buyers for its housing projects, leading to unsold units and reduced revenue.
{AN}This fall in demand may force the business to change its objective from growth or profit maximization to survival, focusing on maintaining cash flow and cutting unnecessary costs. The company might delay new construction projects or offer discounts to attract buyers, helping it stay operational until economic conditions improve.

[Fatima ibtehaj]

[KN]During an economic recession, people often have lower incomes and so they spend less. As a result, demand for new houses falls, which can reduce the sales and profits of a house-building company.
[APP]For example, during a recession, fewer people can afford to buy new houses, so a house-building company may struggle to sell its properties.
[AN]Thus the company might change its objective from growth or profit maximization to survival or maintaining cash flow. It may focus on completing existing projects, cutting costs, or securing enough work to keep employees employed .In the long term, this shift helps the business avoid major financial losses and stay in operation until the economy improves and demand for new homes rises again.

[Abdul Hadi]

KN: An econiomic problem is when a country's GDP falls, this leads to a lower spending ratio in consumers.
APP: For example a housing company like Bahria town may find it difficult to sell houses to more people.
AN: The company may focus on survival instead of growth so it can maintain its operations, It may aim to reduce cost and improve efficiency as it is shifting its focus from production, the objectives can be shifted towards maintaining cashflow as it focuses on financial stability rather than growth.

[Naveen fatima]

[KN] An economic recession is when overall demand and income levels in the economy fall for a long period.
[APP] For example, During a recessionary fewer people ah be able to afford to buy new houses because of lower incomes or job losses.
[AN] This could lead the house building company to change its objectives from growth to survival, focusing on cutting costs instead of expanding. it might also delay new projects or shift to building cheaper homes to attract customers.

[Uqbah hadeed kayani]

[kn] In a recession, consumer confidence and spending usually fall, which can reduce demand for new homes.
[app] A house-building company might struggle to sell properties as fewer people can afford mortgages or are willing to invest.
[an] This may force the firm to pause expansion plans, prioritise cash flow, and shift its objective from growth to survival to avoid financial losses.

[areeshasaber]

[kn] consumers have low income and demands for houses fall.
[app] for example, Barratt Developments might have less houses being sold during a recession.
[an] this will lead to lower revenue, less investments and falling share prices.

[M huzaifa jillani]

(KN)
An economic recession means a fall in consumer income and spending leading to lower demand for many goods and services.
(APP)
For example a house building company in Pakistan may find that fewer people can afford to buy new homes during a recession because banks give fewer loans and people try to save money.
(AN)
As a result the company may change its objective from growth and profit to survival focusing on reducing costs completing fewer but essential projects or offering cheaper housing to keep operations running during the down turn.

[sikander ali]

[KN]due to recession consumers will delay their plans about building houces as will prefer to save then spending.
[APP]for instance kk builder facing a recession would lack a customers and will go for survival so that the present customers don't cancel the deal or the project and if gave advance could ask for refunds.
[AN]thus due to this they would mainly focus on consumer base then profit maximizing so that they can keep their business running and can avoid to fire employees as less capital of money to pay salaries.

[Shuraim Arif]

(KN) Less disposable income of customers would lead to less sales.
(APP) For example, if country A is going through a recession, it would have high unemployment rates, meaning many people won't be able to afford as they are not getting paid to save enough money, leading to lower sales.
(AN) These low sales would come as a huge loss to the business and force them to relocate or shift its objective to survival. This, of course wouldn't be easy for the business as relocating requires a lot of finance, and with the economy in recession, banks would hesitate to lend money to any business. On the other hand, if it decides to switch objectives to survival, the company would have to reduce its size to cut some costs and offer a very less price to customers just to avoid going bankrupt and start facing cash flow problems.

[Abdullah Mohsin]

[KN] A fall in consumers' incomes, which affects the sales of a house-building company.
[APP] A recession leads to a rise in unemployment, decreasing household incomes, reducing their ability to purchase houses, and lowering the company's sales.
[AN] This forces the company to shift its objective to survival, as no sales equals no revenue, forcing the business to decrease costs to survive.

[Aarib Saad]

(KN)Profit Maximization or Increasing Market Share to survival will be made more difficult, due to less likeliness of sales.
(APP)Since, in a recession, many people will lose jobs or have a dip in pay there will be less buyers available for houses, as due to lower disposable income, people will switch to renting.
(AN)This in turn would mean that the business will be either forced to only target upper class customers, which will mean that increasing market share will be less likely or it will have to lower prices, making profit maximization more difficult, thus in the long term, making growth harder as well so business will have to focus just on survival.