P5 M2
P5 & M2
In this assignment I am going to describe the influence of two contrasting economic environments on business activities within Boots. I will then compare the challenges to Boots business activities in two different economic environments.
Economy is the wealth and resources of a country that is used to produce and consume goods.
What makes an economy strong?
The output makes an economy strong output is the ability for an economy to produce goods and services to sell. These then create jobs for people and workers would get income and spend money, therefore businesses make more revenue, which allow them to receive all kinds of tax; NI (National Insurance), VAT and corporation tax paid to the government.
In order to determine the output of a country, the formula used is G.D.P, Gross Domestic Product where the total value of goods produced on its land is by nationals and foreigners.
UK GDP = 0.8%
France GDP = 0.5%
Effect of economic factors on business activities
Inflation is the general cost of goods that increase which make the cost of living expensive. The government try to aim as a target of 3% growth.
UK = 2.2%
France = 1.3%
During inflation when the prices go up this is called ‘Growth’ which is when things start to get better; consumers being to increase spending which will then make businesses feel more confident and start to invest again and build stocks. However it takes time for unemployment to stop growing. Growth effects Boots because the prices go up which will then make sales go down as the cost of products are too much and people can’t afford so they will limit what they buy. People will then demand for more wages because prices are going up for products and they want more money so they can buy these nice items. Boots will then have to have competition with other stores like Superdrug. Therefore to help the business they would advertise themselves more to promote the business like doing sponsorships
In this assignment I am going to describe the influence of two contrasting economic environments on business activities within Boots. I will then compare the challenges to Boots business activities in two different economic environments.
Economy is the wealth and resources of a country that is used to produce and consume goods.
What makes an economy strong?
The output makes an economy strong output is the ability for an economy to produce goods and services to sell. These then create jobs for people and workers would get income and spend money, therefore businesses make more revenue, which allow them to receive all kinds of tax; NI (National Insurance), VAT and corporation tax paid to the government.
In order to determine the output of a country, the formula used is G.D.P, Gross Domestic Product where the total value of goods produced on its land is by nationals and foreigners.
UK GDP = 0.8%
France GDP = 0.5%
Effect of economic factors on business activities
Inflation is the general cost of goods that increase which make the cost of living expensive. The government try to aim as a target of 3% growth.
UK = 2.2%
France = 1.3%
During inflation when the prices go up this is called ‘Growth’ which is when things start to get better; consumers being to increase spending which will then make businesses feel more confident and start to invest again and build stocks. However it takes time for unemployment to stop growing. Growth effects Boots because the prices go up which will then make sales go down as the cost of products are too much and people can’t afford so they will limit what they buy. People will then demand for more wages because prices are going up for products and they want more money so they can buy these nice items. Boots will then have to have competition with other stores like Superdrug. Therefore to help the business they would advertise themselves more to promote the business like doing sponsorships