Introduction
This assignment focuses on the different economic factors and how they affect
the different organizations. It continues by talking about how the businesses
will face the challenges that come with the different economic environments
they are placed in. The rest of the assignment focuses on the political, legal and
social factors that businesses may be faced with and how it affects them and the
changes they may have to make to adjust in the future if the changes will affect
their strategies
Aims and Objectives
1. To be able to list different economic environments.
2. To be able to discuss how they affect the organizations.
3. To be able to create ways in which business can overcome any challenges
faced during the selected economic environments.
4. To be able to list different political, legal and social factors faced by
business and how it affects the organizations and their stakeholders.
5. To discuss how such changes in said factors will impact the business
strategies of an organization.
P5: Introduction
1
, This section of the assignment for Unit 1, Business Environment, focuses on the
influence of two contrasting economic environments in the business activities of
an organization. It will describe things such as recession/bust, boom, trough or
recovery and connect them to one of the previous selected organization chosen
in P1 either being River Island and Rainbow Trust.
Economics are the action of using numerical theories and methods to business
activity and the factors contributing to the diversity of the organizational
structure and the relationships of the companies with their labour, capital and
product markets.
Recession is defined as a decline in the gross domestic products (GDP) is
usually accompanied by a decrease in the stock market, an increase in
unemployment, and a decline in the housing market.
Bust is defined as a decrease in the marketing activity of the business. During
this period of time, the businesses might produce less products and the prices
of said products tend to decrease because there is less personal disposable
income (PDI) to spend after paying bills such as rent, mortgages, gas, electrics
or personal taxation. Salaries decrease, which is a push factor for current
employees but a pull factor for potential employees due to the unemployment
rate. In a bust, the organization experiences a deflation rate, which is the steady
fall in the prices of products.
Boom is defined as an increase in the marketing activity of the business or rapid
and significant sales growth. During this period of time, the business is more
likely to increase the cost of products and well as produce more products,
because people have more personal disposable income (PDI) to spend. Wages
also increases which pushes the increasing of employment due to the fact that
individuals will be paid more money. The companies experience an inflation rate
which is the opposite of deflation, therefore being a steady rise in the products
of products.
Trough is the stage in a business’s economic activity, which marks the end of
the decreasing in the business activity of the business and instead displaying a
transition to an expansion.
Recovery is the stage in the cycle of business that follows a recession during
which an economy regains its place in the market at a higher peak.
Recovery
Boom
Boom
Recovery
SALES Recession
Recession
Bust Bust
PERIOD OF TIME (YEARS)
2
This assignment focuses on the different economic factors and how they affect
the different organizations. It continues by talking about how the businesses
will face the challenges that come with the different economic environments
they are placed in. The rest of the assignment focuses on the political, legal and
social factors that businesses may be faced with and how it affects them and the
changes they may have to make to adjust in the future if the changes will affect
their strategies
Aims and Objectives
1. To be able to list different economic environments.
2. To be able to discuss how they affect the organizations.
3. To be able to create ways in which business can overcome any challenges
faced during the selected economic environments.
4. To be able to list different political, legal and social factors faced by
business and how it affects the organizations and their stakeholders.
5. To discuss how such changes in said factors will impact the business
strategies of an organization.
P5: Introduction
1
, This section of the assignment for Unit 1, Business Environment, focuses on the
influence of two contrasting economic environments in the business activities of
an organization. It will describe things such as recession/bust, boom, trough or
recovery and connect them to one of the previous selected organization chosen
in P1 either being River Island and Rainbow Trust.
Economics are the action of using numerical theories and methods to business
activity and the factors contributing to the diversity of the organizational
structure and the relationships of the companies with their labour, capital and
product markets.
Recession is defined as a decline in the gross domestic products (GDP) is
usually accompanied by a decrease in the stock market, an increase in
unemployment, and a decline in the housing market.
Bust is defined as a decrease in the marketing activity of the business. During
this period of time, the businesses might produce less products and the prices
of said products tend to decrease because there is less personal disposable
income (PDI) to spend after paying bills such as rent, mortgages, gas, electrics
or personal taxation. Salaries decrease, which is a push factor for current
employees but a pull factor for potential employees due to the unemployment
rate. In a bust, the organization experiences a deflation rate, which is the steady
fall in the prices of products.
Boom is defined as an increase in the marketing activity of the business or rapid
and significant sales growth. During this period of time, the business is more
likely to increase the cost of products and well as produce more products,
because people have more personal disposable income (PDI) to spend. Wages
also increases which pushes the increasing of employment due to the fact that
individuals will be paid more money. The companies experience an inflation rate
which is the opposite of deflation, therefore being a steady rise in the products
of products.
Trough is the stage in a business’s economic activity, which marks the end of
the decreasing in the business activity of the business and instead displaying a
transition to an expansion.
Recovery is the stage in the cycle of business that follows a recession during
which an economy regains its place in the market at a higher peak.
Recovery
Boom
Boom
Recovery
SALES Recession
Recession
Bust Bust
PERIOD OF TIME (YEARS)
2
