Environment Analyses of Lv

1784 WordsSep 8, 20138 Pages
ENVIRONMENT ANALYSES 3. Global/Regional economic environment Purpose of analysis: The economic environment consists of economic factors that affect consumer purchasing power and spending pattern. The economic environment can offer both opportunities and threats. No company can avoid the influence of fluctuations in the global economy. And when you're in a developing market, the understanding of the economy is essential. Some elements of the economic environment (The divide between rich and poor purchasing power differences in social class, the market area, the stage of the economic cycle, the volatility of prices of some items such as gasoline, oil, gold) directly affect the purchasing power and consumer tastes, which determines the…show more content…
Besides, the legal system will help to protect the general business environment for enterprises and consumers: avoid unfair competition, protecting consumers against fraud avoided by businesses. Moreover, the political stability of the market: the main island, strikes, protests, the strength of civil society, press freedom, corruption ... also affected the operations of the business. Thus, the need to learn, master and concerned about the impact of political and legal environment to business operations of the enterprise is essential.. Effects of policies: * The policies and the decisions of the government have the ability to affect the operation of a business or organization, such as Louis Vuitton. The containment policy can stimulate business in each country affected. For example in the UK: According to UK government budget 2010 which showed below net tax rises of £6.255billiosn with spending cuts of £8.855billions until the end of 2011. After that, the net tax rise of £8.23billions and spending cuts of £31.9 billion in 2015. The spending cuts have long-term influence on customer's buying behavior and impact negatively on the luxury brand. Besides, tariffs, transport costs, import and export regulations directly affect the cost of products sold in each country. Particularly, in Vietnam, luxury goods like clothes, bags, accessories of well-known brand name are levied at high taxes and
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