How The Macroenvironment And The Global National Environment? Sarah Jebreen
1601 WordsDec 10, 20147 Pages
3 - Assess the Macroenvironment and the Global National Environment - Sarah Jebreen
The financial performance of any business in the clothing retail industry depends on the level of consumption and spending consumers are willing to reach, which is affected by the macroenvironmental factors. Those factors include economic, global, technological, demographic and political and legal forces.
First we will start with the Macroeconomic factors. Economic factors can ether have positive or negative impacts on the clothing retail industry. Disposable income is negatively affected during recessionary periods, therefore consumer purchases decline. So that will lead to an increase in the competitive pressures in the industry. Which will lead the company to be stuck with large amounts of unsold inventory. Thus they might have to sell their products with a significant reduction the prices. And that could adversely impact the company’s liquidity, capital resources, results of operations and their continued growth. On the other hand, during an economic growth period, people have more disposable income. Hence, they are willing to buy more clothes, which will ease competitive pressures, and that will result in an opportunity to expand operations and earn higher profits. Thus in today’s growing economy, the macroeconomic factors represent an opportunity for ANN INC.
One of the most important macroeconomic factors that affect retail sales is the interest rates of the local banks and