In the midst of recessions, firms are more likely to experience distress. Amid the "Great Recession" of 2008-2009, Target Corporation substantially changed its operations. It placed a greater emphasis on partnering to produce cheap chic, and offering value-conscious consumers more staple items, such as food (Nohria et. al, 2010). Demand for staple goods is relatively price and income inelastic. As a result, Target exited the Great Recession unscathed and continued to grow. Target also increased its online presence and was prepared for the unique recession beginning in early 2020, when the COVID-19 virus increased virtual commerce activities relative to in-person activities, strengthening a trend toward digital commerce already in evidence.

In contrast, the century-old fashion brand Brooks Brothers was less prepared for recession when the pandemic struck in 2020. Brooks Brothers had remained reliant on a limited range of high-end goods and formal wear not in demand as the frequency of social and business events fell during the COVID-19 crisis. Wahl Clipper Corporation benefited from a massive upswing in Do-It-Yourself (DIY) haircuts with new social distancing measures and quarantines in place, proving that not all risks can be anticipated; however, Target's activities demonstrate that some risks can be mitigated. As its sales grew, Amazon worked to contain delivery costs (often called "Last Mile of Delivery" costs) by setting up distribution hubs to minimize the expense of shipping physical goods to disbursed clientele.

On the production side, supply shocks can rapidly disrupt the production process. According to the Bureau of Labor Statistics, in the first quarters of 2020, the COVID-19 pandemic led to fluctuations and swift increases in domestic producer prices (meaning costs of goods sold directly to producers). Suppliers in the food sector had particular difficulty meeting consumer-driven increases in demand, as some firms shut down or limited production capacity when viral outbreaks occurred at their plants.

Describe the general line of business of the firm.

• Describe how each of the three economic tools listed above can help to explain an aspect of the firm's economic demise.