Economics and the Legal Environment - Coursework Example

Economics and the Legal Environment Introduction ABC Kitchens is an already established company in the marketand thus it is not very difficult for the company to engage in a new market and have the suppliers have them as their favorites. However, there are posing challenges that face the company on a daily basis. Like in any industry, competition is one of the factors that exist in business and the manner through which the various players decide to handle this matters a lot. Focusing on the Strengths of the company, one recognizes that the company has an already established base in the American market and that the deals they are offered are rather superior and worthy seeing as they are already acquainted with the suppliers in the region. The main reason as to why ABC Kitchens is identified as a powerful company is the high amounts of sales that it has made over time and this was due to a shift in the customers who go for its products. However, accommodating this is one of the most effective strategies to carry out. It is advisable to go through the different micro and macro economic factors that may affect the business. Macro-economic factors Economic Growth The economic growth of America is another factor that affects the running of the organization. The reason for this is that it determines many factors. Moreover, if there is positive economic growth, there is the ability of the customers to lead a rather comfortable life to a point that they have the ability to purchase more food from the restaurant. It is thus effective to understand that economic growth is one of the major macroeconomic factors that affect a business. Inflation Inflation is a factor that affects the running of the company negatively. Inflation also determines a lot of issue with regard to the running of ABC. The cause is the fact that a rise in the inflation makes the company spend many resources. The consequent of this is the rise in prices of the commodities that ABC deals with. With an increase in price, the most common effect is the loss of customers who will thus have to look for another restaurant that offers the commodities at a much cheaper price to save on their money. Interest Rate ABC just like any other company is one that requires finance to carry out its operations. These finances are not always readily available and it is imperative to understand that the course of action that they normally take is to borrow from financial institutions. However, there are times that these institutions may set the interest rates too high for the company to deal and consequently it is unable to borrow the finances it requires. This is why it is said that the interest rate of a company is imperative in determining the amount of revenue available to an institution and consequently the manner of operation (Arnold, 2013). Savings Savings is another factor that majorly influences the manner of operation for the company. When people do not carry out effective savings, they only have enough money to supplement their daily meals that are often cheap. ABC is an internationally known company dealing with high class and quality products. Failure for the people to save would lead to the company not accumulating as much revenue as expected to purchase products from the company (Amity, 2014). Consumption The consumption of these commodities is another factor majorly influencing the success of the company. People may have a low consumption rate of products from the company. Many factors can lead to this. One of the factors is negative advertisements from the company that would have had the customers having high expectations only to get disappointed after making the purchase. It is imperative to ensure that correct advertisement is made to ensure that customers stick to the company out of loyalty with the products provided. Low quality foods may also cause this and it is important for the company to understand the needs of the community around in order to increase the consumption rate and consumption population (Marco, 2013). Micro-economic factors Competition A major factors to acknowledge regarding this is competition. The food industry is one that has developed over the years with many players showing interest in it. As opposed to past years when the industry did not have many people, it has grown significantly to offer employment opportunities to very many people. ABC Kitchens has a very great challenge and this is given its location. New York has the repute of being a hub for a lot of talent in the food industry and this has led to many people introducing not only food companies, but also culinary institutions linked to various companies. A peril to the business is that the rival companies have not been in the industry for long. This thus means that the companies are young and the customers might want to test out their abilities. Moreover, the fact that the companies have already showed a keen interest in media advertising means that they are innovative and might come up with even more strategic marketing means. Production Attitude Production attitude include necessities needed for an effective production process. These are majorly materials coming from the supplier. One of the factors that depend on the economy is the production or rather the supply of raw materials in high amounts. If the country witnesses sluggish development, there is the possibility of the price of raw materials increasing significantly. Raw materials are very important for any company as these are the basics for performance. Labor Labor laws are another factor that adversely affects the manner of operation for the ABC Kitchen. This point is directly linked to that of production. The reason for being if the raw materials producing firm does not offer appropriate fees to the people working for them, they will carry out shoddy jobs or to an even extended level quit. This same thing can happen on the part of the ABC Kitchen itself. Without offering quality treatment to their source of labor and those working for them directly, they may end up producing sub-standard commodities that would in turn disappoint the customers. The workers and customers may come up with legal unions that seek their right to receive attention. Unsatisfied customers have the effect of leaving the company to seek for another restaurant and this would lead to general poor performance. Capital Lack of capital is another factor that can affect the functioning of the company. The reason for this is that without this money, the company does not manage to purchase the various commodities it requires to run the organization. Moreover, another effect of this is lack of funds to pay the workers and lack of this leads to low motivation and low output. Failure to pay the suppliers in time may also lead to poor relations between the two groups and the consequent of this is poor performance. Land Land laws also come in imperative. The government ought to provide land to the company if at all it offers the right documents and creates a substantial case for expansion. Land is an important factor and in this case, lack of appropriate basis to open subsequent branches is a factor that affects the company. It is imperative that the company gets land to set up its other branches if it aims at succeeding. Failure to do this would have the company in very few basis and thus unable to reach many customers. Customers are necessary for the development of a company and the increase in profits and thus it is important to have many branches (Jeffrey, 2014). Technology The contemporary business environment is one that is coupled with many changes in technology. Technology is important in that it ensures that a lot of work is done and in an efficient manner. The company ought to be up to date on the various systems that exist in the contemporary food field. This is to guarantee that it offers its customers quality products in an effective and timely manner. To prove that the quality of the products manufactured by the company is going to be legitimate; the company should offer overseas branches with a plan of the systems they plan on using. The company should introduce a high-end system that incorporates major technological tools that are vital to the products produced. These are in line to ensure that the customers get maximum comfort and satisfaction while using the products. Conclusion In an effort for the company to build its name, a set strategy has to be incorporated. Understanding these economic factors affecting the company is very important and dealing with them is even more vital. One manner through which the company can do this is by using the large amount of cash it has in its reserves to hire young employees. This is from the fact that the education system has changed over time, the incorporation of young minds equipped with the necessary skills, and technology expertise would give it a much better opportunity of conquering the market. Moreover widespread advertisement and holding of events in which they show case some of their best products from the contemporary times and even earlier days ensures that the customers acknowledge the quality of products that the company has offered them over time and thus regain customer loyalty. References Jeffrey, W. (2014). Linking the Substitution and Output Effects of Production to Profit Maximization in the Intermediate Microeconomics Course. Business Education & Accreditation, 6 (1), 13-22. Marco, V. (2013). Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries. Industrial & Corporate Change, 22 (6), 1453-1495. Amity, S. (2014). Impact of Changes in Macroeconomic Factors on Treasury Bond Returns: Evidence from Emerging and Developed Markets. Global Business Review, 9, 24-37. Arnold, R. (2013). Macroeconomics. McGraw Hill Publishers: New York. Read More