Changes That Affect the Economic Environment in Business

Topics: Unemployment, Inflation, Economics Pages: 3 (1052 words) Published: March 4, 2013

For this task I shall explain the changes in the economic environment on the business. This may include changes within the following,

Business cycle
International trade

The business that that I will be looking at is Whitbread who own Premier Inn and Costa coffee. I will be explaining within this task how the above may affect Whitbread and its two companies Costa and Premier inn whether it is for the better or worse.

Business cycle

When looking at a graph of a business cycle we can expect to see increases and falls in production, income and expenditure of a company over time. The economy of the U.K, moves from boom to recession over time and these changes within the economy have major effects on the business itself such as Whitbread. The reason why the economy cannot stay within a boom for two long is because the demand for products eventually gets so high that t manufacturers and suppliers simply cannot satisfy it and this leads to rising prices, this has a domino effect has the price of other products and services eventually increases and the demand which once existed slowly dwindles effecting everything else and the economy plunges into recession thud creating a business cycle.

The way in which Whitbread’s companies that are premier inn and costa coffee will get affected may vary greatly, for example premier inn being a hotel chain one may expect them to get affected during a recession because more and more people may choose not to stay in hotels in order to save money and look for alternatives instead but with Premier Inn being a budget hotel chain they may experience an increase because of less people including major firms using luxury hotel chains such as the Hilton chain because of the cost associated with such facilities, many people will opt for something like Premier Inn as it is a cheaper alternative and many more people in a recession are looking to save money. Within a boom, premier inn may...
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