M2 compare the challenges to select business activities within a selected organisation in two different economic environments.
Republic of India is an Asian country which is situated in south of Asia and it comes within the 7th largest country in the world and also it has a population of 1.2 billion people. The capital city of India is New Delhi however the biggest and most known city in India is known as Mumbai and it is the biggest city in India. My chosen business Marks and Spencer’s is a UK based business and it’s moving to India I will look into the problems they may face in India.
I will be looking into these factors M&S may face and they as follows: * Inflation
* Poor infrastructure
Inflation – Is the prices of different goods or service may vary either increase or decrease over time in the economy.
Most businesses in the UK and India, by looking closely at the inflation rate as it could have a big effect on the business and because if the inflation rate increases there could be less sales as the prices of the goods will be high and the customers will spend less on goods and services as the prices are much high than before. Looking at the current inflation rate in India the rate has reached to 6.5% resulting in many Indian banks such as ICCI bank raising their interest rates this will this could have an affect on as inflation rate goes high this will result on the customers spending less on supermarkets on such as M&S and this could only mean that the business is not making enough money or breaking even on monthly bases to afford many employees and also pay the bills and taxes so they need to consider on who they could over come this by maybe having to look into how many staff they hire or even starting the business on different city in India which is economically stable and there many wealthy people who are welling to spend on foreign bases supermarkets.
M&S in the UK will be affected by the inflation as they will have to lower the prices to get more customers buying their products and to attract It customers to come to the store. The inflation rate in the UK is 3.6% this is making a lot of people worried and must of the companies and business within the UK are not making much profit and they make enough just to pay their spending’s such as the wages, bills and the tax. If the inflation rate takes drops and decreases it will be beneficial to M&S because they could drop their good prices but at the same still make profit so therefore they will not be worried as much.
Poor infrastructure –
A company such as M&S moving their business to aboard to India there will be a lot of challenges they could face a lot of problem such as bad transport, in India the roads not as smooth and reliable as it is in the UK therefore for M&S they need to consider the fact that there will be poor infrastructure. However India are trying to compete with china and so therefore they have made it a priority to improve the infrastructure and has pledged to build 14km of new roads every day according to the leading intentional monetary fund. India is looking to attract more business to come and base their business within India and M&S is an English company and if it goes aboard it will have a positive effect to the Indian economy as they would be a very popular and more people will purchases their goods from M&S and that means more money is put into the Indian economy. On the other hand looking at the infrastructure in England, the infrastructure in the UK is rather very good as they have excellent road condition, much organised train and tube transport so...