An Examintaion of the Changing Nature in Retail Nature and the Potential Impact on Future Operations

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The macro-environment investigates the impact of PEST factors, these factors affect a company's planning and performance because they are part of a forever changing market. Companies need to be able to adapt to these changes but as they are factor which are beyond a firm’s direct control they can often be seen as threatening. However, changes in the external environment also create new opportunities as well as threats. All of these changes within the macro environment can have large impact on consumer behaviour and spending. Retailing is the set of activities that markets products or services to consumers for there own personal or household use. (Newman and Cullen (2002)

The macro-environment investigates the impact of PEST factors, these factors affect a company's planning and performance because they are part of a forever changing market. Companies need to be able to adapt to these changes but as they are factor which are beyond a firm’s direct control they can often be seen as threatening. However, changes in the external environment also create new opportunities as well as threats. All of these changes within the macro environment can have large impact on consumer behaviour and spending. Retailing is the set of activities that markets products or services to consumers for there own personal or household use. (Newman and Cullen (2002)

The macro-environment investigates the impact of PEST factors, these factors affect a company's planning and performance because they are part of a forever changing market. Companies need to be able to adapt to these changes but as they are factor which are beyond a firm’s direct control they can often be seen as threatening. However, changes in the external environment also create new opportunities as well as threats. All of these changes within the macro environment can have large impact on consumer behaviour and spending. Retailing is the set of activities that markets products or services to consumers for there own personal or household use. (Newman and Cullen (2002)

The macro-environment investigates the impact of PEST factors, these factors affect a company's planning and performance because they are part of a forever changing market. Companies need to be able to adapt to these changes but as they are factor which are beyond a firm’s direct control they can often be seen as threatening. However, changes in the external environment also create new opportunities as well as threats. All of these changes within the macro environment can have large impact on consumer behaviour and spending. Retailing is the set of activities that markets products or services to consumers for there own personal or household use. (Newman and Cullen (2002)

Economic factors such as inflation effect levels of spending, The Times Newspaper stated on October 17, 2007 that for the past three consecutive months inflation has remained below the bank of England’s base rate at 1.8%, this in turn will mean that prices will not noticeably rise. But a low inflation rate often coincides with a lower interest rate. If interest rates are low it encourages consumers to spend as the cost of borrowing money is much cheaper. This is especially beneficial among firms that sell ‘big ticket goods’ e.g. white goods such as fridges. This is due to customers often needing financial support for funding as they are expensive. For example car companies and high street shops such as PC World, low interest rates could create opportunities. As there will be higher demand for these goods, and therefore be able to sell more units. On the other hand it could mean that unless retailers are prepared for the surge in demand then many may fail to meet customer demands or may not be able to produce stock quick enough. This could then lead to an increase in inflation as prices will rise because they may not be enough resources, or it could be employees have to work over time to meet customer demands and thus expecting wages...
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