Notesale: Turn your study into money

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Unit 1 assignment 3: The impact of the economic environment on businesses

         
1
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Economics studies how governments, individuals and nations make
decisions on assigning insufficient resources to fulfil their needs
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Without economic stability, there would be a higher
risk of sickness, and poverty
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Ø   Explain who are the BRICS economies
BRICS is the shortened form of an association of five major developing national economies of Brazil, Russia, India, China and South
Africa
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The BRICS associates are all developing or
newly manufacturing countries, but they are famous by their fast developing economies and major impact on regional and worldwide
affairs
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Economics Data

Ø   Draw up a table of at least 4 economic data items for the 2 selected countries (the UK and one India country), an example is
detailed below but you can display in a format of your choosing
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5%
(2942)

1
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1%

4
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Base
Interest
Rate

Interest rates are the cost of borrowing
money
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5

6
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70 % more higher than the UK
which means apple would have to pay back more to the bank
if they choose to take out a loan

Total number of able people of working
age seeking paid work

5
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9

Unemployment figures in the UK are currently 0
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UK has low interest of 0
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This also favour the company as it would help apple lower their cost of operation, which contributes to their profit margin and make
them likely to spend more while as High interest rates in India don’t favour Apple as if they take out a loan they will get charged a high
rate of interest as cash is worth more and investors receive a high rate of interest, as the financial system needs money to lend out, so
financial institutions are willing to pay high interest rates to attract investor money
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However in other circumstances, high interest rates favour may India
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75% interest of the amount added to the original amount
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Altogether I conclude that the UK’s state of the economy doesn’t affect apple as the low inflation rates keep the prices of materials low
and the high unemployment figures give apple a large number of applicants to choose from
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3
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Using the stage of the
business cycle describe in detail how it effects
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Business profit= The economic data on India show high inflation of 4
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75% which are the
symptoms of a booming economy so India’s currently in the booming stage of the business cycle which has a positive impact on
apple as it’s profits are ever growing but if they there in depression their profits will be much smaller
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7% fall in
unemployment from last year which mean apple’s profits have increased due to the fact that more people are working therefore
there is more money to spend on luxury products like the iPhone 6S
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Interest rates (monetary policy)= The UK’s base interest rates are currently at 0
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However
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Unemployment and Taxation (fiscal policy)=governments may use taxation to reduce unemployment for example When the
UK was in recession the government cut taxes which gave it a boost out of recession and put more money into the hands of
customers which meant they had more money to spend which also means apple made more money and the company needed to
employee more people to meet their increase in demand which could have resulted in more people paying taxes into the
government and generating revenue
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Moreover the economic data also shows unemployment in the UK is currently at 5
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1% and interest rates are currently at 0
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The economical data also shows a difference of 1
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7% difference in interest rates which means if apple took out a loan in India they would
have to pay back way more compared to the UK which will affect there operation as they will have less to spend because inflation is also
high which will result a higher cost for products like IPhones, Ipads and macs which will means less profits

Unit 1 assignment 3: The impact of the economic environment on businesses
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Supplies
Ø   Describe the term supply

Describe the term demand

The term supply is the level of
goods and services that
suppliers are willing to provide
at different prices
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The price of goods and
services tend to increases as
its demand increases
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Further more Apples prices will fall in India due to
higher inflation as products will be more expensive and Apple’s
products normally cost way more compared to what other companies
in the same market offer ,this will mean customers will go to cheaper
companies like Samsung, as GDP is high in the UK more people can
afford apples products
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§  

Need and aspirations of the consumers=  

Need and aspirations of the consumer affects Apple as it uses
marketing strategy such as celebrity endowments to drive sales ups as
newer days celebs are role modules to a lot individuals and often they
tend to want to be like them so if they see them using an IPhone then
individual would be encouraged to buy a IPhones which will rise its
demand
...
0

Availability of raw materials and labour=
Availability raw materials and labour affect Apple as the company
sources materials in India with lower labour and production costs,
which helps cuts operating costs
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Logistics and ability to produce profitably=

Logistics and ability to produce profitability affects Apple as it controls
where goods are sold and manufactured
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Further more the Ability to produce profitability
affects Apple in both countries as they can manufacture products
without losing money
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Government support=

Government support affects Apple as they can lower taxes, increase
labour and pay and give Apple a support so the supply would increase
which means Apple would make profit
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A change in prices doesn’t always affect Demand for
example if there was a price increase in an essential product like petrol then demand wouldn’t be affect as its vital for them to travel
which means they will have no choice but to buy, this is referred to as inelastic
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Price sensitivity (elastic demand)

The impact of change in prices affect demand of products and services effect demand as Apple uses this to conclude the price of their
products have substitutes such as IPhones have Samsung
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Influence of branding on price sensitivity (inelastic demand)

Branding gives products a inelastic demand as a strong brand like Apple ensures customers sensitivity as they recognise the high quality
apple delivers
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Unit 1 assignment 3: The impact of the economic environment on businesses
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Discuss supply chains, ownership of business movement of capital and business operations
International level = This type of level is where an organisation operates in two or more countries for example Apple Inc
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From there, assembler will ship products directly
to consumers for those who buy from Apple’s Online Store
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Reducing ability of national governments to regulate global businesses)

Apple is a global corporation as it sources materials and operates in many different countries around the globe
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Furthermore reducing ability of national governments to regulate global businesses will be
beneficial to apple as they spend a lot of money and time on comply with regulations that eventually prove to be unnecessary for
example health inspections
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Apple acquired ownership of a company beats
in 2014, today apple still operates under the same brand as it’s well established and provides them with interments opportunities
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key challenges

Ø   Compare the key challenges relating to the headings below and draw conclusions on
●  

Supply has an impact on apple as if the supplier does not deliver products on time apple might see a decline in sales, as there won’t
be products to sell
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Without any of these suppliers apple wouldn’t be able to manufacture products
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Global interaction also affect apple as the business advertise in different countries, for
example in the United states and the united kingdom apple might use the same advert as both countries speak English moreover the
adverts might feature a well known celebrity within the countries while as an adverts in a country like china might feature a different
celebrity and languages due to the fact that a number of the population might not speak English or know the celebrity in the US and
UK adverts so using the same celebrity might be useless where as using a celebrity that is well known in china might be more
appealing to there target market in the country as they are a global business which also means they affected by the different
economies
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Conclusions
o   Summarise how the economic environment impacts on a business

●  

Economic environment is vital to a business such as apple as there are numerous factors that can have an impact on the
organisation
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Apple also has to be aware of unemployment, inflation, GDP and interest rates of the countrys
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'BTEC Unit 1'
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Swanepoel, Thalyta, Gerrit van der Waldt, and Elanie Steyn
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