Macroeconomics Abbott Labs and Macroeconomics It Is Essay

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Macroeconomics

Abbott Labs and Macroeconomics

It is a fact that the recent economic downturn affected every individual and company in some way, but companies that had solid business plans prior to the start of the crisis were better able to weather the financial storm. For example, a company that had a diverse range of business that included both products that depended the level of a consumer's disposable income and another group of products that are indispensable would probably be able to meet its financial goals despite global economic issues. Such a company is Abbott Laboratories. Because the primary business of Abbott is producing medical devices, pharmaceuticals and tests that are widely considered standards in the medical community (Abbott Laboratories, 2012), the company has been able to maintain its profitability throughout the economic crisis. However, macroeconomic indicators do have an effect on the continued economic viability of the company and they can provide investors with a monthly picture of how Abbott is faring. For this report, gross domestic product (GDP), the consumer confidence index (CCI), and the personal consumption report (PCR) will be used as indicators to explore the Abbott Laboratories.

GDP is the indicator that is most often used to determine "the market value of all goods and services produced by the economy during the period measured" (Barnes, 2012). To a large company such as Abbott Laboratories this indicator has a great deal to do with the profit projections that they will make for the coming year and into the deeper future. Abbott laboratories is comprised of a great many different products that depend on the health of the economy to make them profitable.

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Because the economic outlook for the country is reflected in its GDP, Abbot can use that data to determine what portions of its business to highlight. Pharmaceuticals may not sell as well if the overall GDP decreases, but they may do more business in health services.

It would seem that the health services industry is largely exempt from the price fluctuations that affect other industries because people always need healthcare, but this is not always the case. People are more likely to limit their use of healthcare services if they perceive that the economy is performing badly, and they are much less likely to use pet care and peripheral care products if they have lost confidence in their spending power (Roehrig, Turner, Hughes-Cromwick, & Miller, 2012). The CCI looks at the confidence of the buying public over a certain period and uses three measures to make the determination: how people feel currently, how people feel the general economy is going, and how people feel the economy will be faring in six months' time (Barnes, 2012). In Abbott's case, this can be a guide for release of a new product, the implementation of a new service, or general gauge to see whether people are going to want to use their services and to what extent in the near future. Consumer confidence can actually be good for Abbott whether it is high or low. Since people….....

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