Business

2176 Words Jun 8th, 2016 9 Pages
TCA 7

All businesses have to foresee and then deal with all potential challenges that may arise. One challenge can be dealing with the increase of demand after releasing a product. An example of this can be with Nike. As Nike is a clothing company they are consistently dealing with trend changes and dealing with demand of a certain product that turns to be very popular due to factors such as a gain in popularity from social media. Nike will always have to be prepared for changes in demand, a good example of this was when they first released Nike mercurial football boots, there was such a high demand for these boots and were getting sold out throughout stores over the country and online.
Nike had to then adapt and try and cope with the
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For example, increase the revenue of the business.
It can also help them expand worldwide because they will be in a good position to open new stores. However, when the interest rates are higher, this can have a bad impact on a business.
It would mean that they will have to pay back an excess amount when they borrow money so they are more likely to borrow less because of the high interest rates.

This would restrict the business from expanding which leads to them having to make cuts or increase prices if they did take out a loan so they are able to pay it back, and if they increase the prices they may lose customers because it may be out of some people’s price ranges and they will look for alternatives and may shop from the business competitors

At the moment the current interest rate stands at 0.5 percent, this is a good rate because it means that when large amounts of money are borrowed only a smaller interest will be added on so it would be an ideal time for people or businesses to borrow. For example, if Nike were to borrow £100,000 then they would only have to pay £5,000 interest on this.
To make the most of this Nike would decrease expenditure and increase their revenue, so this will mean that they are maximising their profits therefore they would have more money available to pay of loans.

Everyone over the age of 18 has to pay tax after they earn a certain amount of money, tax

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