People, A Cheap Commodity Every day, businesses around the world make decisions that benefit their cause. The decisions that they make hold moral expectations. Ultimately, their consequences either good or bad. However, in making business decisions, an executive might negatively impact the lives of workers who are creating services and products for the company. In other words, by trying to make the business more profitable, they would create the opportunity for base level workers to undergo unjust pay, terrible work environment, or in some scenarios both for the sake of profitability.
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
This unfortunate occurrence immediately ceased production of the iPad2. Consequently, Apple couldn’t produce adequate iPads to satisfy the consumers’ demands. This delayed iPad shipments and caused an increase in cost of production, therefore, Apple’s pricing increased for the remaining iPads available in the market. However, Apple was at a competitive disadvantage as many loyal customers resisted purchasing the iPad2 and eventually turned to Apple’s competitors who produced inexpensive tablets. Disruptions in Apple’s supply chain adversely affected its sales subsequently decreasing revenue and overall profits.
Economic factors: In a rapidly economical changing world, TESCO seek to create strategies that would fit those changes such as inflation rate, taxes, interest rates as well as exchange rates. High unemployment rate is a major factor that affects Tesco performance, with weak power of purchase on Tesco products which impact Tesco ability on producing several items, especially with Brexit, employers would use it as an excuse to sack people and become more redundant. Inflation jumped more sharply than expected to 1%, the highest level in almost two years, the slump in pound lead to a rise in Tesco’s major supplier prices Unilever, who asked for a rise in prices. With a depreciation of sterling, costs will be higher and so are Tesco prices thus consumer spending would decrease which is going to affect production of Tesco, the employment and profit margins not to mention that fuel prices would increase as well. Social
There was also an increase in the sale of franchises as franchisees were unable to maintain the finances of owning the franchises. Nando’s approached and dealt with the situations by offering promotions and deals whereby their products would have been temporarily cheaper in order to attract customers and accommodate their financial difficulties. In order to maintain the amount franchises open, Nando’s dropped the franchise fees as well as their establishment costs and initial working capital in order to generate some profit. Over the past few years, many large international fast food brands have entered the local market in which Nando’s is situated, which poses a threat to the success and overall consumer base and so profit margin of the business. Nando’s has managed to rise and stay above the competition by
Therefore, when organic companies are expected to increase the production of food because of a high demand and high price of the production, it will happen to fulfil the demand in the market. Nevertheless, when the demand decreases, the demand curve will shift to the left, and so the price of the grains will fall too. This is because when there is a decrease in demand, the quantity also decreases because it could lead to a loss if there are too many products that are not being sold in the
The weaknesses demonstrated by Amazon to acquire Whole Foods for 13.7 Billion are disadvantages where Amazon can improve. Firstly, Amazon has made a considerable financial investment to acquire Whole Foods and will limit their ability to purchase more assets in the future. Second, the acquisition will hurt the corporation’s ability for quality and quantity control. Lastly, since Whole Foods is solely an Organic Food store, there are limited suppliers in the industry and can become a problem if proper precautions are not taken. Overall, with purchasing Whole Foods, the organization will experience a hit financially, quality and quantity control for satisfying their consumers and the limited suppliers of Organic products in the grocery industry.
By correctly compensating employees and offering further pay incentives such as bonuses or paid time off, the company will suffer less from employee turnover, which will benefit their success in the long run. CNBC guest columnist Ron Volper summarizes how paying employees’ salary and incentives will positively impact an organization, “The companies with the highest employee morale and productivity pay a mix of salary and incentives. The salary compensates employees for performing all the tasks required of them and provides them with a consistent income.” This high moral and positive attitude for compensation will positively result in retaining good employees for the long run of their
As the shopping craze and cheap products effect on consumers wore off, people started to notice the negative effects of cheap prices Walmart brought. At this point as consumers became more aware and local grocers and variety stores gather up more regular customers, some economists say Walmart had reached its growth potential. Walmart, as it had done for decades had to keep its prices low. In an environment where consumers are more aware of their spending habits and its effects on the local business had made So in the end to keep its business practice and mantra left behind by its founder Walmart had to increasingly send manufacturing jobs to offshore cheaper countries. Employ only at minimum wages, stop unionization and keep on cutting more corners to keep the prices lowered.
( An example of collusion within supermarkets, was when they agreed to price fix milk in 2007.) However, because firms are not allowed to agree on prices and quantities of goods, firms in a oligopolistic market aim to increase their market share and become market leader, therefore they increase their output which has the effect of reducing prices. This means they are unable to profit