For example, the exchange rates can affect the costs of the supply and price of imported goods and exporting goods in an economy. Also the rise in inflation rates of an economy can affect the way a company prices their products and services. The biggest threat that Nike would face economically is from an economic recession. A recession would have an effect on Nikes growth
The company’s pre-eminent rival Next Plc. is slightly longer established and therefore having an advantage in accessing more customers compared to Ted Baker which still has a larger room for growth. Other competitors include Primark, All Saints, Zara, SuperGroup Plc. and GAP Inc. 3.2 Company’s Industry Position With the rival Next Plc. prompting to lower its annual profit guidance from £775m to £815m, Ted Baker has continued to gain enhanced attention in the clothing industry and more consumers are increasingly identifying with the brand as
They want negotiation and dealing at their own cost. This power imbalance is creating a mess in the market because suppliers try to negotiate other retailers i.e. Aldi, IGA etc. This increasing duopoly of Coles and Woolworths will make market penetration very difficult for new entrants. At the same time these two will make market anti-competitive and it will leads to three major concerns i.e.
The rise in fuel cost and ongoing food crisis globally might be the economical factor that will affect Sainsbury because rising cost will affect the supply chain of Sainsbury which causes increase in its product prices and global food crisis will result in rise in purchasing costs for most of the things in supermarket which will pass over to customers by increase in price for most things and its product demand will decrease due to its high prices. At the same time due to improvement in consumers household income, reduction in unemployment rate and growing real wages recovered consumers confidence in purchasing goods they missed during recession
The upper classes then started picking up on this trend because they also want to appear as youthful, which made jeans lost its “rebellious force” like it originally was for the lower classes, including the youth. A lot of high-end clothing designer, like Yves Saint Laurent or Gianni Versace, caught on with the popularity of jeans and created their own expensive version of this cheap, street-style piece of clothing. Their products was mainly consumed by the upper classes. Of course there are large differences in quality and price between a pair of jeans from Saint Laurent and one from Matalan. Instead of being an “egalitarian” item of clothing , jeans carries on to also be a social marker, taking part in dividing the social classes.
In the event that market interest is relentless, an increment in business sector supply brings about a decrease in business sector costs and the other way around. In the event that market supply is unfaltering, an ascent sought after results in an ascent in business sector costs and the other way around. A business encourages exchanges in the middle of purchasers and venders (monetary markets) and makers and buyers (buyer products and administrations market). Markets experience variances and value movements coming about because of changes in supply and interest. These progressions result from vacillations in numerous variables including, yet not restricted to, customer inclination and observations, the accessibility of materials, and outside socio-political occasions (for instance, wars, government spending, and unemployment).
Consumers no longer purchase luxury items and tend to cut back on spending. Also, high unemployment has a huge effect on consumer spending. The more people out of work the less they spend on goods and services. One of the many industries that can be hit by the economic crisis is the retail industry. Brazilian’s tend to be very informed about the fashion world.
People in developed countries not being aware of their unsustainable consumption practices and what causes them. And some do not care. This is due to; the logic of capitalism, consumer culture and social status. The growth of capitalism shapes our current economic system and encourages people to consume and waste too much. People no longer believe in reusing or repairing their belongings and so throw them away thus resulting in an increased consumption of luxuries.
3- The effect of political and economic factors on business: Political factors that affect businesses include new legislation such as the national minimum wage and setting TAX rates such as VAT or corporation tax. As tax can be affected by how the economy of the state is ,as you can see when the economy is collapsing the tax rates are usually increased in order to gain what is lost by the collapse . Economic factors that affect firms are inflation and unemployment, interest rates and exchange rates if importing or exporting goods abroad. (http://www.bbc.co.uk/bitesize/higher/business_management/business_enterprise/business_contemporary_society/revision/14/) 4- Current factors which might affect businesses now and in the future: Nowadays, The problem of Qatar with most gulf countries influenced on business, those countries stopped the import exchange which made the state of Qatar to make a deal with Iran and Turkey to get imports at more expensive price, Also Trump when he said that “ Jerusalem is a capital of Israel “ it affected the economy as many of the countries who opposed this stopped interacting with the US market which caused them to have a to lose some of their financial customers (B2B) . In the future, The main factors are the global wars will impact on the world businesses as well as cutting off the relations of countries and natural disasters,
What worst is when businesses lower prices of their product in a desperate attempt for people to buy their goods. Deflation is measured by any decrease in the Consumer Price Index. Fall in the Consumer Price Index causes the prices to fall. When prices continuously fall, people tend to put off purchases hoping that they can get a better deal. This pressured the manufacturers to constantly lower the prices of their products.