Influences of Macro-economic Activity on Virgin Media

This report discusses the impact of macro-economic factors such as inflation and unemployment on Virgin Media, a British telecommunication company. It also covers how the current growth rate and government intervention methods affect the business. Additionally, recent global challenges and recommendations to overcome them are discussed.

Influences of
Macro-economic
Activity

Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK ..............................................................................................................................................5
Detailed explanation of two macro-economic factors that the chosen business will need to
consider and the influences these could have on its business outputs.............................................5
How will the UK current growth rate impact on the chosen business.............................................6
How can the government current intervention methods affect the selected business? ..................7
What are the recent global challenges facing by the chosen business and recommendations on
how to overcome with the challenges in the current time?..............................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The Economy of the country can be studied in two ways; the first way of studying or
measure the economy level but not as a whole, or which studies the individual is known as
micro- economics. Whereas, Macroeconomics is that branch of the economics, which studies the
whole performance of the economics, and the macroeconomics is the combined effect of the
microeconomics. The word economics includes the rates, output and the unemployment in the
economy(Bresser-Pereira, 2020). The economy of any country get brunt by the government,
consumer and by the type of business run. Due to Covid 19, there is harsh impact on every type
of business, and the economy got disturbed. In this report, under the Virgin Group of business
the Virgin media is selected, which is a British telecommunication company, and its function is
to provide the facilities of telephone, television and the internet services in the United kingdom.
This Virgin media is controlled and owned by the VMED O2 UK limited, the company virgin
media run in the partnership between the Liberty Global and the Telefonica. The headquarter of
the company is in Green Park, England. In this assignment report the factors of macroeconomics
will be discuss, which put an impact on the Virgin Media business. Apart from this, how the
current growth rate of United Kingdom and the other government interventions would affect the
chosen business. In the last, the analysation will be done on the current global challenges faced
by the business and the recommendation will get discuss for the same(L.C., 2020 ).

TASK
Detailed explanation of two macro-economic factors that the chosen business
will need to consider and the influences these could have on its business
outputs.
The factors of the Macro-economics are the one's which affect the economy of the UK as
a whole. Unlike the microeconomics, the factors of the macro-economics put an impact on
overall working of the economy not to any particular group or an individual. There some factors
of the macroeconomics, which affect the overall business output;
Inflation- it is a rate which becomes the reason of rising the prices of every commodity
and the product in the given period of time, the situation of the inflation arises, when the
customer excessively increases the demand of the commodity and of the services, this tends to
increase the price of that product in the market(Islam, 2019). The same was happened with the
Virgin Media, the demand of the customer got increase day by day, as all the people in UK wants
the internet facilities, and because of the well known reputation of the company, most of the
customers are using the Virgin telecommunication. Due, to highly increasing demand of the
customer over their services, the company has no other options to earn profit, they start to charge
high amount from the customer for their services and this situation will led to increase the
inflation rate in the whole economy of United Kingdom.
Unemployment- it is defined as, the people who are employable and actively searching
for a job but, unable to find an employment. In the last two years of Covid 19, in UK the
employment rate got diminished, and even after that the people were facing difficulty to find a
job in UK. Due to this, the UK is facing the recession period and it slow down the economy of
the whole UK. The chosen business of Virgin Media got also affected with the Covid 19, many
employee's were left the company, due to which there are less number of employee's to serve the
customer. Now, the company start the recruitment process for hiring the new employee's, which
will give the employment to some people. They also decide to change their policy of hiring the
employee's, to fight with the situation of the Covid(Lera, 2018).

How will the UK current growth rate impact on the chosen business.
The United kingdom is a diversifying country that provides their citizen quality of life and
emphasise mainly on their standards of living. The unpredictable disease of Covid-19 has drastic
impact on its economy as their market is downfall with huge number in the year 2020 because of
restriction on access to health . The pandemic reduces the market value of UK due to restriction
on many essential items that are necessary for human survival. In the year 2021, there is sudden
rise in gross domestic product of 7.5% estimates on first quarter i.e., Oct to Dec, 2021. There are
various factors that has greater impact on economic growth of the country due to rise in cases of
Covid 19 pandemic( Sornette, 2018). The changes has been determined by the Virgin Atlantic
Airlines which are discussed below:
 Economic Life cycle: Economic lifecycle shows the upward ad downward trends of the
economic activity that may vary due to certain factors like output, employment ,salary, inflation
etc. It shows the overall economic growth of the country. This cycle fluctuates time to time
according to market changes. These economic lifecycle evaluates the performance market based
supply and chain to measure the gross domestic product of the country. It also helps the investors
to invest according to the market trends in order to make effective investing planning. Further, it
has four stages of economic cycle that are defines below:
 Expansion: In this stage, interest rate are usually low due to increase in inflation and
production. In context to Virgin Atlantic Airlines, they face expansion due to rise in
market demand and increase of prices of crude oil(Liu, 2019).
 Peak: It is a situation when growth lies at extreme peak level and creates economic
imbalance . It is said to be the highest point where expansion ends, and business contraction
begin in the business cycle. At this stage, the company usually maximise profit and has greater
impact on the overall business operation of Virgin Atlantic Airlines.
 Contraction: This peak lies just after contraction in which growth reduces and
employment falls due to consistency in prices. This stage helps the Virgin Atlantic
Airlines to overcome the errors and correct the performance(Chen, 2019).
 Through: At this stage, economy starts recovering the performance and operation of the
company. In relation to Virgin Atlantic Airlines, they starts focusing on the setting up of short
term and long term goals to overcome the future uncertainties.

 Inflation: This is the situation in which instability in price system face by the economy.
It is directly affected the standards of living of the people. It reduce the purchasing capacity of
the consumers due to rise in prices and fall in demand. Inflation has affected the Airlines industry
due to increase in their prices.
Unemployment rate: Unemployment rate reduces the economic growth of the country. Human
resource are considered as the important asset of the economy that contributes in growth and
development of country and rise in their unemployment rate may affect the overall performance
of the country.
How can the government current intervention methods affect the selected
business?
The government has many options to interrupt the business operations. There are many
policies and strategies of the government through which the government easily and legally
intervene in any type of business organisation. In UK, or in any country the government is
sovereign, it means the government is governing all the business and the trade or other activities
of the nation(Gu, 2019 ). In the case of Virgin Media, following method of Government affects
the whole business;
Fiscal Policy- it involves the changing rate of taxation and the expenditure of the
government. Which affect the rate of economic growth. The lack of customer spending an
investment in business will initiate the demand and bring about the recession in the economic
policies. When it comes to the administration of private sectors will lessen their spendings or
their capital values, the authorities of government will try to spend more and involve less
taxation rates and when the administration of private sectors will increase their spendings and
valuation of their capital, the government authorities will start spending less and controlling the
taxation rates. There are two types of fiscal policy;
1. Expansionary fiscal policy- this policy is used by the government in the period
of recession, and it is also use to vitalize accumulate demand and it is also boost
the economic growth. This can be work to spend more, lowering the rate tax. The
approach behind this policy tends to appear when an individual will pay less tax,
but invest more.

2. Contractionary fiscal policy- in this type of policy, the government collect more
money through tax revenue then it actually spends, such type of policies are used
during the time of inflation. When, the government wants to collect money and
desire to borrow money from the people of State, is known as the contractionary
fiscal policy. It can be done through increasing the tax rate and lowering down the
government spending(Mitchell, 2019).
Monetary Policy- it is a policy which controls the flow of money in the market and the
channels through which the new money is supplied. The reason behind to control the money flow
is to grant the effective tax status in the market. The monetary policy is controlled by the central
bank to influence the factors of the macroeconomics. In relation of the Virgin Media, their main
aim is to control the money flow by charging the genuine interest rate by the people. So, that the
money flow is under control(Wray, 2019) .
At the time of the Covid19, when most of the companies were in shock and also in loss,
the Virgin media gives the various offer to the customer in telecommunication, internet services
and the company in that hard time also paid the employee's fully and also provide the facilities at
their home only.
What are the recent global challenges facing by the chosen business and
recommendations on how to overcome with the challenges in the current
time?
The main focus of each and every company is to ensure the operations of the
organisation but, this is not the only function of the company which assure them about the new
challenges(Watts, 2019) . The Virgin Media search out the new challenges which need to be face
by the company in an effective manner, such challenges are given below;
Technology Improving- it is a big task for a company to always get aware about the
update of the technology. The whole operations of the Virgin Media company is depend up on
the technology and in the meantime the customer demand the better services in
telecommunication, internet services etc. to fulfil the demands of the customer, it is highly

recommendable for the Virgin Media to use the latest and upgrade technology, which makes the
operation of the company faster and smoother. The incident was taken place in UK, where the
thousands of people were report their problems about the Television services, the customers were
left out the access of television. To solve that problem, the company apologised on twitter and
give revert to all the viewers about their complaints. That their engineer were tryingto fix the
problem, which hit across the city(Mu, 2022).
Accessible Health care system for everyone- at the time of Covid 19, the company
finds out the new challenge and also the opportunity to them. In Covid 19, the whole world is
facing the disastrous situation, the people got ill but they were not able to had an appointment
with the medical practitioner, because there is no system of meeting physically in Covid 19. To
build the image in the market the Virgin Media took the advantage of that time to help the people
of United kingdom by providing the virtual health care system in their offer of
telecommunication and along with internet services. This will help the people, and they easily
get the recommendation by the medical practitioner(Yan, 2022).
Bad Server- the company like Virgin Media which provided the services over the
internet. Those companies have to be aware about the disturbance in the server, by which the
customer got disappointed by the services and they decided to switch the company. It's a
recommendation to the Virgin Media to foreseen their server, and if they find the problem try to
fix it in the meantime, so that the customer will not face the problem(Sul, 2019).

CONCLUSION
From the above report it is concluded about the study of macroeconomics, that how the factors of
the macroeconomics affect the economy of the chosen business i.e. Virgin Media. There are
various factors of the macroeconomics such as; inflation, unemployment which are highly
discuss in the above report. The government intervention in the business organisation is the
function of the government, and how that function of the government affects the Virgin Media is
also explained in the above report. The policies of the government such as Fiscal and the
Monetary policy of the economics which helps the government to regulate or controlling the
economy of the country by reducing or by increasing the rate of tax. These policies analyses the
flow of money in the market. The chosen organisation Virgin Media faced many problems in
Covid 19 and also the company faces the problems regarding the customer's complaints. At last,
the recommendation is given to the company to make the services effective and the measures to
deal with the new challenges.

REFERENCES
Books and Journals
Bresser-Pereira, L.C., 2020. New Developmentalism: development macroeconomics for middle-
income countries. Cambridge Journal of Economics, 44(3), pp.629-646.
Islam, M.R., 2019. Economic Growth Rates and Exports of Bangladesh: The Bengal
Tiger?. South Asia Research, 39(3), pp.285-303.
Lera, S.C. and Sornette, D., 2018. Gross domestic product growth rates as confined Lévy flights:
Towards a unifying theory of economic growth rate fluctuations. Physical Review
E, 97(1), p.012150.
Liu, G., Chen, S. and Gu, J., 2019. Urban renewal simulation with spatial, economic and policy
dynamics: The rent-gap theory-based model and the case study of Chongqing. Land Use
Policy, 86, pp.238-252.
Mitchell, W., Wray, L.R. and Watts, M., 2019. Macroeconomics. Macmillan International
Higher Education.
Mu, J. and Yan, L., 2022. How to Predict the Economic Growth Rates of a Country ？ A DSGE
Model with the Accumulation of Human Capital. Applied Economics Letters, pp.1-21.
Sul, D., 2019. Panel data econometrics: Common factor analysis for empirical researchers.
Routledge.
Svartzman, R., Dron, D. and Espagne, E., 2019. From ecological macroeconomics to a theory of
endogenous money for a finite planet. Ecological economics, 162, pp.108-120.