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UK economy goes through difference series of pattern with booms to slumps. Every business does well in the time period of boom and most businesses collapse in the time period of slump or recession. Other economy changes that have influence on ASDA are interest rate, wage rate and inflation rate.
Recent years UK economy has barely grown due the financial crisis and high inflation which impacted on demand for goods and services in UK. Inflation is still 2% above the target but according to prediction of bank of England inflation rate will be on target. So it will have positive effect on ASDA because ASDA will be able to provide cheaper products, in this way ASDA’s sales will boost up. However ASDA’s rival may be able to provide products cheaper
In conclusion, regardless of Macropoland’s current economic condition, it is fair to say that it is all part of the business cycle. The business cycle has three parts: peak, trough, and peak. The peak is the date that the recession starts. In Macropoland’s case, the peak would be at the beginning of 1973, its trough somewhere between 1973 and 1974, and then its peak again at 1974. In the second scenario, Macropoland is either at its trough, where it is about to head up again because of its low inflation rate, or it is at its expansion, on its way to heading to its next peak.
A recession is where there is temporary economic deterioration which lasts longer than a few months, sometimes years. This can be seen by the employment rate decreasing and the reduction of trade and industry work. This is determined by the Gross Domestic Product (GPD) which is a government statistic which shows the total country’s economy movement. This is measured every 3 months (quarterly) and it is said that if after two consecutive quarters the GPD is down then the country is seen to be in recession. (Kollewe, 2009). The most recent recession in the UK kick-started in 2008, which was seen to be one of the worst recessions the UK has seen since the Great Depression. In July 2008 was when it became increasingly obvious that we was about to enter a recession; the unemployment rate kept rising, the housing industry started to cut thousands of jobs and the whole-sale industry was declining in production. (Allen, 2010)
the high value of the pound. But overall the UK economy is in a good
Increased demand on a global scale due to increase in manufacturing across the world, opposite in U.
The business cycle is the short-run alternation between economic downturns and economic upturns (Investopedia n.d.). A recession is an economic downturn and happens in every country and some recessions are worse than others and the output of GDP and employment are falling farther and faster. The great depression lasted from 1929-1933 and was a deep prolonged downturn in the business cycle before a recovery/expansion of the business cycle occurred and GDP and employment started to rise (Krugman & Wells. 2012). The next recession lasted from 1981-1982 and was comparatively smaller than the first (Krugman & Wells. 2012). More recently in 2001 a slump in the economy was noted and was followed by the great rescission of 2007-2009 (Krugman & Wells. 2012). Recession is defined as a “period of at least two consecutive quarters (a quarter is three months) during which the total output of the economy shrinks” (Krugman & Wells. 2012). In the United States the National Bureau of Economic Research (NBER) is assigning the task of determining when a recession begins and the NBER looks at a variety of economic indicators such as employment and production (Krugman & Wells. 2012). Every business cycle recession has a negative impact on the economy the recession’s deferrer on the strength of the impact on the country. Consider the two charts for Figure 21-5 of the more recent recessions of 2001 and 2007. The Recession of 2001 did not last as long as the recession of 2007 and did not have as much of an economical hardship on the business cycle and as shown 2007 dipped greatly in industrial production. In the second chart it demonstrates a recession at the point the economy turns from expansion to recession or the business-cycle peak. Then in the char...
This part of the report will highlight the problems within the external environment that affect Marks and Spencer. Before planning and decision making can take place an organisation must be aware of these issues. The key factors that impact upon all organisations are Political, Economic, Social and Technological. These factors are commonly referred to as PEST factors. Political changes like change of government could affect the minimum wage that M&S workers are paid. Economic factors such as inflation could affect the pricing of garments. The Social factors that would need to be taken into account are lifestyle changes and demographics, M&S would need to consider where their target market stood. Technological advances could also affect M&S sales just recently their website has been updated from a corporate site to a new website offering online buying. Globalisation is a huge environmental factor affecting M&S. Globalisation is the increase in cross-border economic, social and technological exchange. For organisations it increases competition and the search for cost advantages.
The economic forces affecting the company include inflation and fluctuations in interest and currency exchange rates. Additional challenges include technological advances and Johnson & Johnson’s competition and patents attained by com...
Over the past five years the Australian economy has gone through many changes experiencing both the peaks and troughs associated with business cycle.
...ncompetitive compared to other firms. If firms cut price then they would gain a big increase in market share, however it is unlikely that firms allow this. If this occurs, as a result to that, other firms will follow and cut price as well. Demand will only increase by a small amount: demand is inelastic for a price cut.
An economic ‘boom’ can help a company like Eddie Stobart. A ‘boom’ is the period that follows recovery phase in the ‘boom-bust cycle’. For example, if a product was £3 before the boom it would seem cheaper in the boom stage because people seem to have more money to spend. However, this is not actually the case as it only seems this way because products are cheaper than they once were and therefor they can get more for their money. This would be good for a company like Eddie Stobart as it means they can increase their profits due to more people using their service. This is also a benefit for Eddie Stobart as it would be cheaper for them to buy products for their company because all of the prices are cheaper in the boom stage. It may also make it cheaper for Eddie Stobart to expand their business further as their vehicles and the price of properties to buy and rent would be cheaper. This would be good for them as they can enhance their business further and therefore increase their products because of this. A disadvantage of the boom stage for Eddie Stobart is that they would have to decrease their prices to follow suit with their competitors. They would have to do this because in the boom stage because of the fact people have more money. However, Eddie Stobart will also have to be prepared for when the boom ends. They will then need to work out how much they predict that they are going to earn in the future. This can either give the business confidence as they could be doing better than they thought they were, or it could encourage them to take action in order to improve the position of their business in the economy. This could include lowering the prices or advertising more to get more customers in their shops and to encourage sale...
There are many responses that a company can have to troubling economic times. They can first weather the storm and survive. They can back up and get driven out of business, or they can grow. The economy has been in recession for many months. It is the job of our company to identify things that can help businesses to make it through these times and hopefully prosper.
The government forecasts that by 2019, the GDP will rise of 0.2%. The consumer’s behaviour towards this economic recession will change and therefore affect the retail industry. Harrods will need to spend more money and investment in order to float or maintain business sustai...
...sable income will be lower thereby reducing purchasing power. This will directly result in the emergence of price sensitive market condition in Malaysia where brand loyalty could be given less priority by Malaysians. So the company sales might get affected due to this. As a recommendations to adapt to this economical environment, Tesco Malaysia should have to change its products, lower the quality & lower the price so that the products can be produced cost effectively & consumers can afford to buy. Besides that, Tesco Malaysia may have to constantly search for local suppliers in Malaysia who can provide products of good quality at a lower price. This may help in producing products at lower cost which the Malaysians can afford to buy.
Economic factors affecting negative or positive way the companies. The inflation and currencies rates have big influence.
Inflation; ‘a situation in which prices rise in order to keep up with increased production costs… result[ing] [in] the purchasing power of money fall[ing]’ (Collin:101) is quickly becoming a problem for the government of the United Kingdom in these post-recession years. The economic recovery, essential to the wellbeing of the British economy, may be in jeopardy as inflation continues to rise, reducing the purchasing power of the public. This, in turn, reduces demand for goods and services, and could potentially plummet the UK back into recession. This essay discusses the causes of inflation, policy options available to the UK government and the Bank of England (the central bank of the UK responsible for monetary policy), and the effects they may potentially have on the UK recovery.