BMP4003 Business Environment: Microeconomic Analysis of Outdoor Toys

This presentation provides a microeconomic analysis of Outdoor Toys Plc, focusing on the impact of Brexit on its business environment. It begins by introducing the concept of the business environment and outlining the main arguments related to the article, using microeconomic concepts such as demand and supply, as well as cost and production. The presentation highlights how the increase in shipping prices due to Brexit has affected the prices of trampolines and other outdoor toys. It delves into the theories of demand and supply, explaining how increased shipping costs lead to higher prices and decreased supply. Furthermore, it discusses cost and production, illustrating how rising shipping costs can reduce production levels. The presentation concludes by summarizing the key issues caused by Brexit and its effects on the UK shipping industry and the microeconomic concepts discussed, referencing academic sources to support its analysis. Desklib offers a wealth of similar solved assignments and resources for students.

BUSINESS ENVIRONMENT

TABLE OF CONTENT
 INTRODUCTION
 MAIN ARGUMENTS RELATED TO ARTICLE USING
MICROECONOMIC CONCEPTS
 REFERRING TO THEORY AND APPLYING IT TO THE MAIN ISSUES
 CONCLUSION
 REFERENCES

INTRODUCTION
 Business environment refers to the environment which includes all those factors that
used to affects the operations of the company and also includes the customers,
competitors etc.
 The current assignment is based on the Outdoor Toys Plc. Which is owned by James
Owen.
 The current report will outline the main arguments of the article by using the
microeconomic concepts and terms.
 Further the report will outline the theory on the two main issues that is demand and
supply and costs and production.

MAIN ARGUMENTS RELATED TO ARTICLE
USING MICROECONOMIC CONCEPTS
 Micro-economics is refers to the study of the individuals, households and the behaviour
of the firm in the decision- making and proper allocation of the resources.
 This concept is applied where the markets of goods and services deals with the
individuals and with the economic issues.
 The positive microeconomics makes the people to know about the economic behaviour
of the people in the market and their expectation from the changing condition.

CONTD…
 As in the given article it is given that the prices of the trampoline is increased 40- 50%
that has affected the shipping prices.
 By the happening of the Brexit there was the cause in the increase in the prices of
shipping industry.
 Brexit was basically the changes in the nature of the relationship between the UK and
EU.

CONTD…
 The cited organization must have to focus on the microeconomic concepts as the rise I
the prices of the shipping will increase in the manufacturing of the products.
 By focusing on the above the microeconomic concepts it will help the organization in
order to maintain its production by the rising of prices in the markets of UK.
 The trade with the EU was dropped immediately by the end of Brexit transition period
with the UK exports to the EU countries that was falling by 45 % and the imports was
decrease by 33 %.

CONTD…
 The soar in the shipping prices used to cause a bounce in the prices of trampoline in the UK
in this summer.
 The high transportation costs and the port congestion will lead to the larger toys such as
trampolines, wings and the climbing frames will become more expensive in the market.
 Hauliers in the UK used to charge more which was about 650 to haul a container from the
port of Felixstowe to the company's site.

REFERRING TO THEORY AND
APPLYING IT TO THE MAIN ISSUES
 Demand and supply
 Cost and Production

DEMAND AND SUPPLY
 Demand: The demand refers to the principle of the economics that used to refer the
desires of the consumers.
 This helps the market to know about the order to purchase the goods and services and
for which they are willing to pay for the prices of the goods and services.
 As in the article it is provided that by increase in the prices of the shipping will lead to
increase in the prices of trampoline and wings.
 Outdoor toys is the manufacturer of the trampoline so by the increasing in the shipping
the cost will also increase in the prices of trampoline.

CONTD…
 Supply: The supply is the economic concept that helps used to evaluate in respect of
the total amount of the goods and services that are available for the consumers in the
market.
 From the above article it is set as the example it is seen that there is increase in the cost
of the which used to decrease in the supply of the wings and trampoline of the
organization.

COST AND PRODUCTION
 Cost : The cost is the monetary value of the products and services that helps the
producers and consumers to purchase the products manufactured.
 This is the main factor by which the customers to know about purchase of the products
in the market.
 By taking the example from the given article it is seen that the rise in the shipping cost
leads to decrease in the supply of the products and services in the markets of UK.

CONTD…
 Production: The production refers to the method of turning of the material or inputs
into the final products by having the best manufacturing process.
 By taking example of the article of the soar in the prices of the products will make the
company to decrease in production.
 As the rise in the shipping costs will lead to decrease in the production of the
trampoline by the company.