Analysis of Economic Factors Affecting Business Performance

This report examines the influence of economic factors on business organizations, using the Greenwoods menswear retailer as a case study. It evaluates the impact of macroeconomic forces like Brexit, labor market dynamics, and inflation, and analyzes how these factors contributed to the company's ...Read More

ECONOMIC
AND
THE
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Identify and evaluate the impact the economy has on business organisations............................1
TASK 2............................................................................................................................................2
Appraise and apply economic theory to a range of contemporary business contexts.................2
TASK 3............................................................................................................................................3
Analyse the micro and macro economic forces on contemporary business................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business economics is a discipline of applied economies that studies the issues faced by
corporations and devises quantitative methods to analyse business performance (Jones, van
Leeuwen and Broadberry, 2012). It analyses and assessment of economic theory for business
organization, management enlargement and strategy. The economic factors of the business
influence of the organizational structure and coordination with different business in subject such
as labour, capital and product markets. The present report is going to evaluate the impact of
economical factors on failure organisation. For this purpose, greenwoods was a long establish
means wear retailer stores and it had more than 200 stores in 1990s. In presented report focused
on impact the economy and apply economic theory to range of contemporary business context.
Evaluate the micro and macro economic forces on business.
TASK 1
Identify and evaluate the impact the economy has on business organisations
In present time mostly companies are focusing on identifying and fulfilling the needs of
customers in particular niche markets. But today market economic trends are fluctuated and
affect to their business. These market trends are creating problems to managers for appropriate
decision making process. In the context of Greenwoods was established in 1860 and operates
menswear stores that was more than 200 in 1980s. According to EMAP publishing Ltd the chain
of Greenwoods has discontinued their trading and closed its stores in the north of England. The
website of company display message to customers “sorry, this store is currently unavailable”.
The company has leave posters on some stores window that read “All outlets of versatile
international trading Ltd t/a greenwoods menswear have now closed for business permanently”.
the manager of the company announced company have pre tax profits 22000 and it was down on
the previous year's figures of 68000 (Wirtz, Tuzovic and Ehret, 2015). the decision dispose of its
freehold asset property and let out their retail space. The financial director of Hanson partners
which owns greenwoods menswear said – it was a long term decision to move away from
freehold. It's all part turn around position from a loss making company at the turn of the century.
The liquidation reason of Greenwoods business over in these areas (North England), can
be identified by analysing economical impact, as mention below -
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Impact of Brexit – The macro economical effects of Brexit on organisation in different terms
such as short term and long term. It considers some restrictions that as a result of British
referendum on whole world. The impact of Brexit shows on laws, rules & regulations, taxes and
any other legal conditions that are difficult to estimate. In the case of greenwoods Brexit impact
on the structure of company and additional costs and work efforts are shows both sides like UK
and the European union. It has been analysed that before the Brexit trade volume of UK and EU
near about 1196 billion euros but after Brexit many risk factors are grown up and affect to
structure of greenwoods.
Labour Market – In present time labour market is main factors that are attached to any
country's policy and describe economical data. In the context of UK market, there is rising labour
cost and rates that are create many economical changes. Due to growing demand in the market
labour wages are rising and employees seek to high charges on their services. It is consider as
main factor that was affected to every organisation as well as green woods structure. In
menswear store need to more labour that was represent products to customer in effective way.
Inflation – The economy of UK is fast and prices and wages are changes rapidly and the
inflation period of nations. Due to inflations impact on general level of price of entities and
services are rises and impact on purchasing power of buyers which finally affect the performance
of sales in the level of domestic and international. The greenwoods decided to manager their
conditions according to economics ups and downs and fa ciliate all resources that are close to
customer and gain more profitability (Sodeyfi, and Katircioglu, 2016).
TASK 2
Appraise and apply economic theory to a range of contemporary business contexts
In the present time, On 2nd January company was announced the business was in
liquidation and a little over 18 months since it previously fell into administration. The financial
manager of Greenwoods has been ceased trading of all online and offline store. Therefore, it is
not capable to pay their debts and creditors will involve in liquidation process. In present time
the stores of greenwood shrunk by 63 in 2017 because it went into administration. The chain of
greenwoods has closed in Sunderland after the company collapsed for the second time. There is
handed termination letter to their staff workers and on December 29, closing their shops with
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information in Sunderland. Therefore, for solving situation of company the manager of
greenwood apply new classical macro economies theory for run business in effective way.
New Classical macroeconomics – In present time greenwoods faces many issues that are
related to failure in producing profitability and decreasing sales performance. There is
recommended new classical business theory to improve performance of the company. This
theory helps to understand conditions which are affect to market. Greenwoods provides different
types of stock of menswear and specific services at their stores to satisfy customer. Therefore
the market economy described through demand and curve of goods and services. These curves
are helping to measure performance of company and customer taste and preference according to
market trends. These analysis helps to manager to estimate and prepare curve that are help to
future growth and determine a range of values. The demand and supply curve represent
allocation resources related to customer preferences. The greenwoods is improve their sales
performance through classical theory and operate their stores in effective way (Ceseña, Good and
Mancarella, 2015).
TASK 3
Analyse the micro and macro economic forces on contemporary business
Business environment are created by micro and macro economies factors that will affect
the ability of a firm to build and maintain its successful customer relationship. These forces are
affected to sustainability of business. Microeconomics is consider as social science that studies
express of individual human action. It shows different goods on different values for individuals
to make more efficient or more productive decisions. There is including individuals with in an
economy like as suppliers, workers and intermediaries. The macro economies consider on issues
that are related to market trends like production, level of import or export and inflationary rate in
prices etc. Every retailers primary goal is to satisfy needs of targeted market place and serves its
products with in the market (Hansing and Orozco, 2014). The greenwoods concern on micro and
macro economical forces to analysis of market trends and market place, where company is
operated. With the help of these forces determine production for run business smoothly and
shows prices of goods and factors. If the amount of any products increased so it will reflect on
sales and customers as decline so there is select other alternative substitutes that will influence of
net income of an organisation. As well as if they are provided products on minimal rate so it will
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reflect on reputation of company, if the company provides low rate so it will reflects on quality
of products. Economical situation influenced of an organisation and microeconomics helps to
manager to understand different types of situation related to production, distribution process and
consumption process. Macroeconomic helps to manager to analysis of different level of
collective employment and per capital income. It helps to identify general level of prices,
business cycle and economical growth of business. With the help of these processes, greenwoods
is determinate the reason of changes in national income (Prillaman and Meier, 2014). It would
help to apply effective strategy and policies to control unethical activities of business and
maintain balances between inflation and deflation period of economy. These factors are helping
to understand performance of the company and measure operational activities in respective
stores. In the terms of macro or micro economies forces it helps to take initiative decisions and
provide sustainable success to business.
CONCLUSION
From the above report it has been concluded that economic factors of any country affect
to business structure. It is important to organisation analysis of market situation with the help of
these factors. Market structure depends on economy, forecasting demand and supply of sales and
per capita income. In broadly terms, the concept of economic and the business described those
opportunity that are helping to prevent their business from excessive loss in profitability. For
improvement of the performance of the company apply economic theory and run business
smoothly.
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REFERENCES
Books and Journal
Jones, G., van Leeuwen, M. H. and Broadberry, S., 2012. The future of economic, business, and
social history. Scandinavian Economic History Review. 60(3). pp.225-253.
Wirtz, J., Tuzovic, S. and Ehret, M., 2015. Global business services: Increasing specialization
and integration of the world economy as drivers of economic growth. Journal of Service
Management. 26(4). pp.565-587.
Sodeyfi, S. and Katircioglu, S., 2016. Interactions between business conditions, economic
growth and crude oil prices. Economic research-Ekonomska istraživanja. 29(1). pp.980-
990.
Ceseña, E. A. M., Good, N. and Mancarella, P., 2015. Electrical network capacity support from
demand side response: Techno-economic assessment of potential business cases for small
commercial and residential end-users. Energy Policy. 82. pp.222-232.
Hansing, K. and Orozco, M., 2014. The Role and Impact of Remittances on Small Business
Development during Cuba’s Current Economic Reforms.
Prillaman, S. A. and Meier, K. J., 2014. Taxes, incentives, and economic growth: Assessing the
impact of pro-business taxes on US state economies. The Journal of Politics. 76(2).
pp.364-379.
Online
Position of Greenwoods. 2018. [Online]. Available through:
<https://www.drapersonline.com/news>
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