In this task, I will be comparing and contrasting the economic environments of McDonalds in
the USA and Cineworld situated in the UK.
Describe the economic environment it is operating in e.g. recession, boom etc.
Recession is a period in which economic growth is slowing down and the level of production
may decrease. Recession arises when people involved in business become more careful and
customers spend less, starting to save more. Producers and sellers also produce less good and
cut down on orders. They also try to cut down costs which sometimes mean removing
workers. Cineworld are situated in the UK which is currently in recession. This means that
they will want to cut down on costs which they may do by cutting down on staff. Their
suppliers might also think of cutting down on costs ultimately slowing down their production
rate causing Cineworld to retrieve goods such as popcorn late. McDonalds are situated in the
US and they operate in an economic environment that is currently in recession. The recession
in the economic environment of McDonalds would cause negative sales and because of the
negative sales, businesses like McDonalds would have to rid of resources such as employees
in an effort to reduce costs.
What is the level of inflation?
UK Level of inflation 2004 - 2014
From being rather low in 2004, the level of inflation in the UK gradually rose to its peak of
just above 5% in 2008. This immediately dropped a few months later but later began to rise
again all the way through to 2011. It finally dropped slowly to around 1.5% in 2014. The
high rate of inflation in 2008 would have meant that business such as Cineworld would have
had to raise their prices in order to maintain a profit margin. If not, the business would fail
and unemployment would have increased harming the overall economy. The low inflation in
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the USA and Cineworld situated in the UK.
Describe the economic environment it is operating in e.g. recession, boom etc.
Recession is a period in which economic growth is slowing down and the level of production
may decrease. Recession arises when people involved in business become more careful and
customers spend less, starting to save more. Producers and sellers also produce less good and
cut down on orders. They also try to cut down costs which sometimes mean removing
workers. Cineworld are situated in the UK which is currently in recession. This means that
they will want to cut down on costs which they may do by cutting down on staff. Their
suppliers might also think of cutting down on costs ultimately slowing down their production
rate causing Cineworld to retrieve goods such as popcorn late. McDonalds are situated in the
US and they operate in an economic environment that is currently in recession. The recession
in the economic environment of McDonalds would cause negative sales and because of the
negative sales, businesses like McDonalds would have to rid of resources such as employees
in an effort to reduce costs.
What is the level of inflation?
UK Level of inflation 2004 - 2014
From being rather low in 2004, the level of inflation in the UK gradually rose to its peak of
just above 5% in 2008. This immediately dropped a few months later but later began to rise
again all the way through to 2011. It finally dropped slowly to around 1.5% in 2014. The
high rate of inflation in 2008 would have meant that business such as Cineworld would have
had to raise their prices in order to maintain a profit margin. If not, the business would fail
and unemployment would have increased harming the overall economy. The low inflation in
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