Business Economics Sample Assignment

ECONOMIC AND THE BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Impact the economy on business organisations..................................................................1
2. Apply economic theory to a range of contemporary business context...............................2
3. The micro and macro economic forces on contemporary business....................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Economics and the business indicates towards matters in financial aspects that use the
financial hypotheses and quantitative strategies to assist business structure (Bachmann, Elstner
and Sims, 2013). It empowers the supervisors and managers of association to analyse and
quantify the execution of association. The report covers the concept of business economics
concept in three sections. Impact of the economic changes upon HMV entertainment company
analysed in first section. The economic theory related to business Micro and macro economic
forces on contemporary business illustrated with particular business case scenario of HMV
entertainment.
MAIN BODY
1. Impact the economy on business organisations
It is essential for organizations to break down the economy state of nation so as to make
compelling technique for supportability. The economy of nation have extraordinary effect on the
organizations which are running in that nation (Schaltegger and Wagner, 2017). HMV the
entertainment/music specialist, went into administration at the end of Christmas 2018. It reported
that DVD sales over Christmas had fallen by 1/3rd compared to last year and overall its turnover
had suffered from a disastrous November. It is evaluated that company had good image in
entertainment business and considered as a music specialist in to administration. Selling and
distribution of DVD's is the main business that fallen form November 2017 due to huge political
and economical changes in UK's economy. The impact of BREXIT on entertainment industry
Impact of Brexit
There were different huge personalties out which some of were supporting to this
progression and some of were against this progression. BREXIT refers to the British exit from
European Union in June, 2016 (Young, 2015). In any case, after the casting a ballot share rate at
last this exit has occurred. As this exit has had gigantic effects on the different divisions of nation
and business was on of them. After this exit has begun this plan of giving nearly everything at
GBP 1 so as to be maintainable in market. It is evaluated that the UK based broadcasters and
producers gained losses due new legislations and restrictions. Before Brexit the legislations
related to visual media and services are counted essential and licences with the member of states.
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The success of organisation stands for broadcasting and operating the services with international
regime.
The programming ceased as EU programming subject to the quota rules in AVMSD
(Schaltegger, Lüdeke-Freund and Hansen, 2012). It decreased the demand of the UK content in
other countries and nations. The loss of the Regulation on the Portability of Online Content
(Regulation 2017/1128), implying that UK endorsers of online substance administrations, (for
example, Netflix) will never again have the capacity to get to these administrations while
incidentally in other EU Member States (for instance, on vacation) except if their supplier clears
giving such access in the important part state(s). Apart form it the quality which was required
for the programming content also not up to the mark due to quota purpose. The loss of the
SatCab Directive, with the impact that UK telecasters giving cross border satellite telecom
administrations should clear rights in all Member States which their signs achieve (subject to
neighbourhood law necessities) and not simply the UK (as is as of now the case).
2. Apply economic theory to a range of contemporary business context
There are six main categories of economic theories are recognised in the contemporary
business context which are as follows;
 Finance theory
 Macroeconomic theories
 Microeconomic theories
 Social choice theory
 Theory of taxation
 Theory of Value
Macroeconomic theories
This theory indicates towards the average at the large level. The overall theory mainly
analyse the variables required for the recommendations based study (Boons and Lüdeke-Freund,
2013). Various measures and the economic factors are related with the given business case of
HMV entertainment company. Some of the effects under this theory are defined as follows;
Inflation:
Inflation is a rate at which costs of items and administrations gets increments. It also
increment the operational expense, for example, lease, utilities and cost of material utilized
underway. As this ascent in expense also constrain business association like Poundland powers
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to build their items costs so as to keep up a dimension of productivity. This diminishes the
buying intensity of shoppers and this have effect on benefit of business. The inflation rate of UK
has ascended to 2.7% which considered as most elevated of most recent a half year.
Labour market
The impact of Brexit on entertainment industry can be understand through the way
entertainment and media companies prepare themselves for the fallout potential and how these
companies will operate in the post-Brexit world (Gnocchi, Lagerborg and Pappa, 2015). After
Brexit, entertainment industry get affected in terms of high labour turnover and closure of many
stores. It can be understand by the following factors:
 Decreasing the access of funding
 Complexity of regulation of environment
Microeconomic theories
The market mainly affected by the major three factors as demand of products, customer's
perspective and the competitive price fluctuation among industries (Stokan, Thompson and
Mahu, 2015). Online telecasts and entertainment sources has driven the direction of telecasting.
Amazon prime and Netflix are major competitors that impacted the business of HMV
entertainment. These entertainment industries has created a monopolistic environment in the
world. To absorb competition HMV introduced its online TV channel services as HMV on
demand that is quite popular in UK. However the demand of the theory also affected the market
of industry.
3. The micro and macro economic forces on contemporary business
Micro and macro economical forces are related to business environment that affect to
ability of any business and it also help to maintain their sustainability success. These forces are
related to market trends and coordinated with customer to establish effective relation in order to
achieve success. These forces are related to external marketing and influence to decision making
regarding to market strategy. Micro economics is focusing on the actions of individuals in the
reference of economy and in this consider workers, households and businesses. Macroeconomics
are whole part of economics that help to recover from broad issues like government deficits, the
number of unemployed people, production and the inflationary increases in prices. Both parts of
economies are separate subjects on the overall subject of the economy. The retailers goals for
business to grow up and satisfy to target customer of niche market.
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There is HMV consider micro and macro forces to describe their organisation situation.
These forces are helps to understand actual market position in different countries. It is indicated
prices of goods how to determine in running business and it described position of company when
prices change according to customers (Stokan,Thompson and Mahu, 2015). When the prices is
increasing of product that time decrease sales and no of customers. If the company set price of
product at minimal rate so it will impact to image of company. If the cost of product set as lowest
rate so people points out on their quality. So these economical conditions are influenced worse
impact on organisational situation. With the help of micro economics managers understand the
different position of company, efficiencies in production, distribution process and consumption
services are provided according to market economy. As well as macro economic helps to
determine the situation of HMV regarding to employment and per capita income.
With the help of this force describe the general level of prices, company cycle and
economical growth. These forces helps to understand to situation of business and create policies
and strategies according to position. It helps to control business activities regarding to inflation
and deflation rates in the period of economy. After that applying effective strategy to improve
their business performance. Thus, by understanding these factors, manager of HMV can evaluate
the performance of company and monitor operational activities to maintain effective
performance of business in respective stores. In broadly terms, these forces are providing help to
take better decision in the terms of organisational success. Both forces are analysing properly
market trends and help to HMV for create marketing plan for attract customers in their stores. It
is increasing their sales performance and focus on specific topics which are need to improve.
CONCLUSION
The above report summarise the economic changes fall upon organisation and the impact
of macro and micro economic factors on contemporary business cases. Products and services
required to analyse different sections are also analysed in the above report. Rage of
contemporary business contexts indicates that there is significant impact fall upon entertainment
businesses that resulted declined the business performances.
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REFERENCES
Books and Journals:
Bachmann, R., Elstner, S. and Sims, E. R., 2013. Uncertainty and economic activity: Evidence
from business survey data. American Economic Journal: Macroeconomics. 5(2).
pp.217-49.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Young, S., 2015. Private business and economic reform in China. Routledge.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2012. Business cases for sustainability:
the role of business model innovation for corporate sustainability. International Journal
of Innovation and Sustainable Development. 6(2). pp.95-119.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-
art and steps towards a research agenda. Journal of Cleaner production. 45. pp.9-19.
Gnocchi, S., Lagerborg, A. and Pappa, E., 2015. Do labor market institutions matter for business
cycles?. Journal of Economic Dynamics and Control. 51. pp.299-317.
Stokan, E., Thompson, L. and Mahu, R. J., 2015. Testing the differential effect of business
incubators on firm growth. Economic Development Quarterly. 29(4). pp.317-327.
Bachmann, Elstner, and Sims, 2013Schaltegger, and Wagner,
2017Young,2015Schaltegger,Lüdeke-Freund, and Hansen,2012Boons, and Lüdeke-
Freund,2013Gnocchi, Lagerborg, and Pappa2015Stokan,Thompson, and Mahu,2015
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