Changes That Affect the Economic Environment in Business

2. Economic: “Our business and financial performance may be adversely impacted by current and future economic conditions” (Page 10.)

The UK had recently emerged from the recession 2007-2009, the economy is now recovering. During the recession, many businesses had struggled to survive. The strategies that businesses had taken during recession may affect their long-term profits. For example, as people spend less during the recession, businesses try to reduce their costs and reduce prices in order to encourage customers to buy their product e.g. Primark, M&S etc and many businesses have also closed down branches in order to maintain their

7. From the documents, what inferences can you make about the “disastrous effects of the business cycle” for each group below:

1. Explain why change happens in a business environment. You should include at least three reasons in your answer.

Because of the financial crisis business is put to test. All of the organisations who want to

During these times of change business may have to change its orgainsation, operation and its nature to deal with the challenges of each stage in the business life cycle. For business to be successful they must constantly develop and change strategies to deal with the growth of the business or the life of the business may be cut short.

The UK economy is constantly changing for various reasons such as improvement in medicine and increased globalisation leading to people living longer and the UK economy becoming more diverse culturally. Whether or not it provides an opportunity or a threat to a business will largely depend upon how the management of the business decides to attempt to change because of the change of the demographics.

1. Explain why change happens in a business environment. You should include at least three reasons in your answer.

The graph shows that the manufacturing was a lot higher more higher in Q1 in 2008 compared to the start of 2009. This shows that businesses were not manufacturing a lot of products and the way in which the manufacturing decreased within a year. This also reflects the manufacturing that Nissan UK did from 2008 to 2009 by making it go low because there wasn’t a huge demand for products. This also shows that the recession had just begun and was getting a lot worse in 2009. This must have had an impact on Nissan by making their employees lose their jobs because there was less labour activity. In Q3 of 2009, the graph shows that there was progress being made in the economy by showing recovery. The graph shows this in the way there is a progress and this would have also impacted on Nissan

The two economic environments that I would be describing about are recession and growth on the business activities of John Lewis. Growth occurs when more goods are being produced and consumed, and also incomes are rising. During growth people spend more money on goods and services as they have more money to spend and also businesses would invest more and hire more labour as it links to increasing demand. Recession however occurs when people involved in business become more cautious so they cut their spending down and also cut back on their orders as well as making workers unemployed or redundant.

The Business Cycle is “…the "ups and downs" in economic activity, defined in terms of periods of expansion or recession” (Dr. Econ). Expansion is the period in which employment, production, sales and income increase. Likewise, the contrasting contraction is when the actions above decrease. In order to keep track of the fluctuations of the US’s business cycles troughs and peaks, the National Bureau of Economic Research was created. The NBER is comprised of a group of economic researchers currently led by president James Poterba. The members are usually specialized in the field of business-cycle research, and are chosen by the president. The NBER was founded in 1920 as a private non-profit “…non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals.” (http://www.nber.org/info.html). The NBER dating committee was formed in 1978, and plays an important role in the US as an examiner of broad measures of economic activity, and the most reliable source of the beginning and end of recessions in the U.S. This is accomplished by gathering as much data on a given period of economic activity.

All of these factors have an enormous impact on my selected business (Barclays) as the economy goes from growth and decline. As well as many others, Barclays is majorly affected as it is in the financial industry. These different factors appear throughout what is called the ‘Business Cycle’. The cycle shows the fluctuation of the activity within the economy over a period of time and consists of 4 main stages; as well as many others,

Given the state of the recession and how it might have affected an organisation’s finances, this has a large impact on the employment relationship i.e. due to cuts there be maybe redundancies, therefore leading to loss of jobs.

There are many factors that need to be taken in account when opening a business. One very impactful factor is the economy. In a strong economy, disposable income is high and unemployment is low. As a result, consumers confidence during this time prompts them to purchase both essential and nonessential goods and services. Though during an economic slowdown, consumers become a lot more concerned about their expenditures and their job stability, this in turn leads to decreased revenue for businesses. Population also influences the total income for a business. In a place where the population grows very slowly, an individual has to deal with the possibility of not attracting a lot of new customers and sticking with their current market share. During this time it is very important to focus all efforts on customer service so the business does not lose current customers. Slow economy and population are not the only factors that reduce total revenue, a high unemployment rate can also drastically impact your business. Unemployment cuts down on a person 's wants, leading to decreased revenue for businesses.

This report will be taking a look at internal and external factors the company positively and negatively. The report will include what they do well and not so well? What issues are affecting the company at present and in the future?