Economic and Financial Management: Impact on Business Companies

This report discusses the economic and financial management of business companies, focusing on the impact of macro and micro factors. It includes a case study on Maplin, an online retailer of electronic goods. The report analyzes the company's strengths, weaknesses, opportunities, and threats, as well as the impact of political, economic, social, technological, legal, and environmental factors. Recommendations for improvement are also provided.

ECONOMIC AND
FINANCIAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
ECONOMIC IMPACT ON BUSINESS COMPANIES.................................................................3
Macro environment analysis...................................................................................................3
Micro analysis........................................................................................................................4
Impact of factors on business operations................................................................................4
IMPACT OF MICRO AND MACRO- ECONOMIC FACTORS ON MAPLIN...........................5
Background of company.........................................................................................................5
Micro economic analysis........................................................................................................5
Macro-economic analysis.......................................................................................................6
RECOMMENDATIONS.................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
The analysis of the economic and financial management is very necessary for the
business and its development. This is necessary because of the reason that the analysis of the
environment help the company in managing its business and taking decision (Krutikova and
Kravets, 2018). There are many different tools and techniques like PESTLE analysis, SWOT,
Porter analysis, Ansoff matrix and many other tools which help the companies in identifying the
changes taking place in the environment and then implementing the same within the company.
The present report is based on company Maplin which is an online retailer dealing in
electronic goods and is headquartered in UK. The present report will start by outlining the
economic impact on the business with help of different types of tools of environment analysis.
Further the report will highlight the impact of these factors over the company and the reason for
its failure. In the end some recommendations are being made for the improvement.
ECONOMIC IMPACT ON BUSINESS COMPANIES
Macro environment analysis
The macro environment is defined as the forces which are external to the company and
are out of control of the company. these are the factors which impacts the working of the
company to a great extent. This is majorly due to the reason that the business operates in the
external environment and any change taking place there impact the operations of the company.
for analysing the macro environment, the tool used is the PESTLE analysis. This is a tool which
help the company in analysing all the factors which are included in the external environment and
includes following-
 Political- This includes the changes taking place within the political structure and
policies of the government of the country and the regulating bodies.
 Economic- These are the factors which are relating to the economy of the country
whether be it economic cycle like recession, inflation, changes in foreign exchange rates,
interest rates of bank and all other economic factors (Pelto, 2019).
 Social- This includes the changes taking place within the attitude, perception, values of
the people relating to the product and services of the company.
 Technological- This factor includes the changes taking place in the sector of technology.
This includes any advancement or upgradation which takes place within the technology
and related equipment and machines (Ferri, 2019).

 Legal- This includes all the laws and rules and regulation which are applicable over the
working and operations of the company.
 Environment- this includes the factors relating to the protection of the environment and
which needs to be considered by the company to a great extent.
Micro analysis
This includes the analysis of the internal environment of the company and what is the
impact of it over the working of the company. For analysing the micro environment of the
company, the technique of SWOT analysis is used as this help in analysing the internal
capabilities and weak points of the company. This includes the following steps-
 Strengths- These are the capabilities or the good points which the company is having and
which adds to the profitability of the company.
 Weakness- These are the limitation or the negative points which are internal to the
company and which hampers the growth and development of company.
 Opportunity- These are the chances of development and growth which are present in the
external environment which can be used by the company in developing itself.
 Threats- These are the factors of the external as well as internal environment which
either restricts or limits the growth of the company.
Impact of factors on business operations
All the factors of these two techniques that is PESTLE and SWOT analysis impacts the
working and operations of the business to a great extent. If the changes in these factors are
positive then this help the company in growing and developing (Stoffregen, Giordano and Lee,
2019). In the similar way, if the changes in these factors are negative then this will impact the
working in negative way and will not promote growth and development of the company.
IMPACT OF MICRO AND MACRO- ECONOMIC FACTORS ON
MAPLIN
Background of company
Maplin is a high street retailer in the area of electronics which went into administration in
the year 2018 February. The company was founded by Sandra Allen, Roger Allen and Doug
Simmons in the year 1976 and came to an end in 2018. The major product of the company were
electronics, computing, batteries, games, CCTV security and many other related electronic goods

and services. In accordance to the CEO of company the reason for its failure is that the company
was not able to maintain the minimum level of sales and because of this they became insolvent
(The UK’s best- known brands bankrupted by new technology, 2018).
Micro economic analysis
Elements Positive and negative impact
Strength The major strength of the company was that
the company was having more than 60
websites in various countries and in more than
16 languages. This was a positive impact for
the company as it was able to cover large
portion of consumers by dealing in various
languages.
Weaknesses The weakness of the company was that that
there was low consumer loyalty as they were
having many different options to buy online.
This had a negative impact as this decreased
the sales of the company and resulting in its
failure.
Opportunity The major opportunity was tying up with the
other leading brands of the same industry. But
this was not adopted by the company and it
impacted the company in negative way and
lead to its closure (Aithal, Shailashree and
Kumar, 2016).
Threat The major threat was the high competition with
the other online retailers like amazon, eBay
and others. This had a negative impact over the
company as the consumers preferred others and
this led to the closure of the company.

Macro-economic analysis
Elements Positive and negative impact
Political factors The political condition in UK is vary stable and
this has a positive impact over the working of
the company as there are not many changes in
the policies and regulations of government.
Thus, this might help the company in the
reviving form the losses.
Economic factor In the present era the interest rate of the bank is
low and this can have positive impact over the
working of the company. It is so because of the
reason that the company can take loan form the
bank and can revive its position within the
market.
Social factor The trend and preferences of the consumer is
leading in the direction of use of more
technology. Thus, here the company should
have grabbed this opportunity and develop its
product and services in accordance to those
and this would have not resulted in failure
(Koshesh and Jafari, 2019).
Technological factors The company was not able to manage its
product in accordance with the latest
technology and that is why it failed as they
were not able to meet the expectations of the
consumers. Thus, this had a negative impact.
Legal factor The company was able to maintain the
business all in accordance to all the rules and
regulations and this even after the closure of
the business created a goodwill of the company
(Gürel and Tat, 2017).

Environmental factors This had a negative impact over the
environment because the electronic products
emit some radiations from the goods and this
damages the environment and surrounding.
Thus, it created a negative impact over the
company which also added to its failure.
RECOMMENDATIONS
For not closing down the company Maplin could have used the following
recommendation and tried to save its business from shutting down.
The major recommendation for the company to reviving its position within the market
was to adapt to the latest changes in the sector of technology. This is because of the reason that
the company was not using all the latest techniques of promotion and other technological
advancement. Thus, this distracted the consumers to the other competitors resulting in the
decrease in consumers and finally shutting of the company (Phadermrod, Crowder and Wills,
2019).
Another recommendation was to take some financial help from the banks and other
companies in reviving the stability of the company. This financial help will assist the company in
implementing the relevant changes and to upgrade its working.
CONCLUSION
From the study of the above report it is inferred that the analysis of economic and
financial management is very helpful for the company in analysing the present condition at
which the company is working. This analysis will help the company in analysing its position
within market and ways of improving the performance. For this the use of different
environmental analysis tools both for macro and micro level has been used. Thus, for the macro
analysis the tool of PESTLE was used and all the external factors and their impact over the
business was discussed. For the micro environment analysis, the use of SWOT technique was
done and the internal capabilities and weakness were outlined. In the end some of the
recommendation were made which company could have used for revival.

REFERENCES
Books and Journals
Aithal, P.S., Shailashree, V. and Kumar, P.M., 2016. Application of ABCD Analysis Framework
on Private University System in India. International Journal of Management Sciences
and Business Research. 5(4). pp.159-170.
Ferri, P., 2019. Micro and macro in Minsky’s models. In Minsky’s Moment. Edward Elgar
Publishing.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research. 10(51).
Koshesh, O.S. and Jafari, H.R., 2019. The Environmental Strategic Analysis of Oil & Gas
Industries in the Kurdistan Region Using PESTLE, SWOT and
FDEMATEL. Pollution. 5(3). pp.537-554.
Krutikova, A. and Kravets, O., 2018. Analysis of micro and macro marketing environment in the
juice market.
Pelto, P.J., 2019. Micro and macro levels of analysis in anthropology: Issues in theory and
research. Routledge.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Stoffregen, S.A., Giordano, F.B. and Lee, J., 2019. Psycho-socio-cultural factors and global
occupational safety: Integrating micro-and macro-systems. Social Science &
Medicine. 226. pp.153-163.
Online
The UK’s best-known brands bankrupted by new technology. 2018. [Online]. Available through:
<https://www.techworld.com/picture-gallery/apps-wearables/eight-big-companies-
bankrupted-by-new-technology-3611714/>