Analysis of Business Environment Factors and Their Impacts

This report provides a detailed analysis of the business environment, encompassing various internal and external factors that influence business operations. It delves into monetary policy, explaining how central banks manage money flow and interest rates to stabilize prices. The report further explores fiscal policy, detailing how governments use tax rates and spending to influence the economy, including discussions on tax policies and government spending. Global factors such as globalization, technological advancements, political, economic, social, legal, and environmental factors are examined for their impact on UK businesses. Additionally, the report covers regional factors, including Brexit, geographical considerations, labor, government support, and cost-related aspects affecting business locations and operations. The report concludes by summarizing the key findings and highlighting the interrelation between these factors in shaping the business landscape.

Introduction to Business
Environment

Table of Content
 Introduction
 Monetary policy
 Fiscal policy
 Global factors
 Regional factors
 Conclusion
 References

Introduction
Business environment refers to sum total of internal and
external factors which influence on business. Business
environment can consist factors like suppliers, consumers,
competition, improvement in technology, government
activities etc. It is helpful in determining the business
opportunities, helpful in planning, increase profitability,
make improvement in overall performance etc.

Monetary Policy
 It refers to process
through which monetary
authority of country like
currency board, central
back etc. assure the
stability in price as well
as trust in currency.

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 It is macroeconomic policy that is laid down through
central bank.
 The monetary policy is mainly used through government
in order to regulate money flow in an economy.
 Main objective of monetary policy is to minimize
demand for services and products.

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Impact of high interest rates
 Usually, Central bank enhance the interest rates when
inflation is to be predicted to enhance in inflation target.
 The higher interest rates tend to minimize inflationary
pressures and rate of the economic rates.

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 At the time of high investments, firms can earn the more
money from these kinds of investments.
 The enhancing interest rates can develop the high affect
on the several business due to demand of the credit goes
down and also the customers switch to saving the
money to spending it.

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Impact of Monetary policy on Investment
 Monetary policies is related to strategies which employed
through central bank with regard to money that
circulation in an economy.
 The main aim of the monetary policy is to attain the long
term economic development and the central banks may
have the various stated objectives towards end.

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Control of money supply
Money Quantity circulation
in an economy impact
macro and micro
economic trends.

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 Bank of England can control money supply through
“open the market operations”.
 It will include selling, purchasing and also interest-
bearing bonds.
 If it will sell the bonds then in this case purchasers pay
from through through cheque drawn on commercial bank
accounts of Bank of England.

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Advantages of Monetary Policy
 Reduces interest and mortgage payment rates
 Permit Central Bank to apply quantitative easing

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Disadvantages of Monetary Policy
 Not useful in global recession
 Not guarantee to economic development