BMP4003 Business Environment: Economic Review of Shipping Industry

This report provides an analysis of the economic factors impacting the shipping industry, focusing on a BBC news article discussing rising shipping costs at UK dockyards and their effect on imported goods. It explores microeconomic concepts such as supply and demand, elasticity, and the impact of port congestion and skilled worker shortages due to Brexit. The report applies economic theories to these issues, discussing the relationship between buyers and sellers, price elasticity, income elasticity, and cross elasticity. It concludes that the business environment encompasses various factors, including economic forces like GDP trends and inflation rates, which significantly impact businesses operating in the shipping industry.

BMP4003 Business Environment
Assessment 1 - Individual Presentation

Article Review - Economic Concepts And
Models
Name:
ID:

Contents
• Introduction
• Describing the key arguments of article in relation to microeconomic concept
• Applying economic theories to the above discussed issues
• Conclusion
• References

Introduction
• Business environment can be described as a
exercise which encompasses all those forces that
can affect processes of organisation as well as
comprises of varied stakeholders like customers,
competitors, government regulations, technological
advancement and industry trends. This project aims
to discuss the economic concepts regarding
shipping industry.

Describing the key arguments of article in
relation to microeconomic concept
• Given BBC news article provides varied issues
relating to shipping cost at dockyards at United
Kingdom which in turn increases the cost of
trampolines and other swings in market.
Companies are facing challenge of port
congestion which suggests that ships have to
stand in a queue for their turn for loading or
unloading of their products.

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• Another issue that manufacturing
organisation facing in producing
trampolines is shortage of skilled
workers. As due to Brexit, a large
number of workers who were working
in United Kingdom have migrated to
European Union.

Applying economic theories to the above
discussed issues
• Numerous economic forces have
significant impact on the above
discussed issue of demand of Chinese
products, rising shipping cost and the
influence of these factors on GDP and
global economy.

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Ascertainment of economic theories in
relevance with stated issues of UK market in
shipping industry are discussed below:
• Theory of demand and supply- Law
of demand and supply has described the
relationship between buyer and seller for the
purchase of specified product or service.

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• Elasticity- Theory of elasticity can be described as an economic concept which is
used to measure the fluctuations between demand of quantity and changing price
of that specified good. A commodity is said to be elastic when there are high
fluctuations in quantity demanded in relation to increase or decrease in prices. It is
needful for organisations that demand for a product or service should remain static
in accordance when prices volatiles with high or low altitudes

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Differential types of elasticity in relevance
with trampoline manufacturing companies
are as follows:
• Elasticity of demand-
• Income elasticity
• Cross elasticity

Conclusion/Summary
• From the above mentioned information, it has been concluded that business
environment encompasses varied factors like technological, economical, political,
legal and socio-cultural aspects. These comprises of external as well as intrinsic
forces which impact businesses. There are varied economical forces which impact
businesses like rising GDP trends and increase in inflation rates.

References
• Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
• Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and
SMEs' profitability: Evidence from European Countries. Economic Modelling/. 78.
pp.275-292.
• World Bank, 2017. Doing business 2018: Reforming to create jobs. The World Bank.