The Economic Environment

The news that the UK economy grew by 0.8% between July and September caught many by surprise. There has been an unlimited flow of negative press regarding the state of the UK and global economy which has fuelled fear amongst consumers and businesses. Fear can be a devastating emotion in business, but is also a powerful motivator. What’s important is to have control and balance of fear. Breaking up emotion and business totally would be a dangerous strategy because with emotion comes compassion, empathy and determination. The economic environment is an important component of the business economic  environment in which you run your home business. It refers to the nature of the economy and how it affects the demand and ability to acquire goods and services in the country where you do your business. Most developing countries have small economies whereby the majority of the population does not have enough money to spend on luxuries and their basic needs as well. It’s therefore important for you to consider the ability of the population to buy the products and services you offer when buy drugs no prescription setting up a business. Milk products are generally purchased by all households, however liquid milk accounts for the largest share of this market. On the other hand cheese faces strong competition from other complimentary goods. Factors in this area include disposable income and expenditure patterns; per capita income and distribution; currency stability; inflation; level of acceptance of foreign businesses in economy; Gross National Product (GNP); industrial and technological development; available channels of distribution; and general economic growth. Obviously, the greater a nation’s wealth, the more likely it will be that a new product or service can be introduced successfully. Conversely, a market in which economic circumstances provide only a tiny minority of citizens with the resources to buy televisions may not be an ideal one for a television-based marketing campaign. Health agendas such as the need to consume omega fats, cholesterol lowering products and probiotics in 2005 and 2006 have led to a growth in the market of milk products. Growing a business prudently is an important strategy for all companies. Darwin observed that in nature species fight fiercely for survival and only the fittest will go on to pass on it genes. Many argue that the business world has adopted Darwin’s theory of evolution and have rigorously applied it. Barriers of entry into the milk producing industry is necessary in that it helps in the prevention of unhealthy competition in the industry, if firms were to have free entry and exit then there would be an increase in the level of supply of these products resulting to a very low prices for these products. When commercial banks charge high interest rates, it generally discourages borrowers from accessing credit. As a business person, you should ask yourself as to how easy it’s going to be for you to borrow money from the bank to finance your business. For instance, in developing countries, commercial banks are Canada pharmacy pills not so much be willing to lend money to farmers because they think that they run high risk businesses. This is mainly because agriculture is normally affected by weather conditions. In very dry seasons, farmers may realize poor yields and those who borrow from banks may find it so hard to pay back the borrowed money.

March 5, 2013iavalanche Comments Off on The Economic Environment
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