However, the skyrocketing oil (that peaked $147) and food prices in global markets increased the import costs and aggravated trade deficits thereby putting downward pressure on US currency. In simple words, this steep fall in property demand followed by failure of buyers to pay back their mortgage installments to their respective financial institutions adversely impacted their financial position and strength. Indeed, these institutions observed severe credit crunch and shortfall situations because of the lesser circulation of money and a diminishing trend in inflows. As a result, various leading financial institutions such as Lehman Brothers collapsed followed by the closure of many manufacturing related industries and services organizations. In short, this further aggravated the situation and led to immense unemployment. The decrease in aggregate demand of goods and services in the USA in turn adversely affected both emerging or developed economies (these are heavily dependent on exports on the USA and another developed world) as well as advanced economies where total output and productivity reduced sharply due to economic contraction, turmoil, and downturn. (Brondolo, 2009)
The business macro-environment became toughest and most challenging as claimed by officials employed at many leading businesses such as GM, Nike, Starbucks, Toyota, Tesco, Wal-Mart, etc. Indeed, many business enterprises and organizations found it extremely difficult to ensure their survival, growth, and sustainability. Indeed, today consumers demand more value for exchange of their hard-earn money as well as prefer to purchase top quality products at the lowest possible prices. The growth of low-cost carriers in the airline industry in the past few years is evidence of the above-mentioned statement.