• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain the effects, of changes in the economic environment on Wimpey Homes.

Extracts from this document...

Introduction

´╗┐Yasmin Akhtar P1: explain the effects, of changes in the economic environment on a selected business: The name of the company that I will be using for this assignment is Wimpey Homes. This graph bellow shows the business cycle: Slump is a period when output slows down due to a reduction in demand this may because less people may want to build new houses so Wimpy homes will not have many homes to build so sales will decrease and confidence may begin to suffer Recession is when wimpy homes have made less from their money that they had in their base year which was their closing balance from the year before this is because economic levels slows down and the level of output may actually decrease. Unemployment is likely to increase. Firms may lose confidence and reduce investment. Individuals may save rather than spend. Recovery is a period when the economy moves between recession and a boom. The sales starts to increase and the employment levels start to rise. Boom is a period when the economics is growing and it grows very fast and the employment levels are very high and the unemployment levels are low. The business confidence become high and they may lead to increased investment. The consumer confidence may lead to extra sending on luxury items. Growth is a period of improving economic circumstances more than the recovery. ...read more.

Middle

This would also affect these suppliers as they will be making less sales as they will have less demands form Wimpey homes to build the house as many people will not be buying new house because of him unemployment. 3) The managers of Wimpey homes should look out for is the trade surplus to see the economic recovery. This is when goods are exported more than goods imported. This means the country does not need to look for cheaper goods from foreign markets. The GDP is also a good way of indicating whether the economy is recovering from a recession as it is a measure of the national income and output for a given country?s economy. The GDP can be measured through the expenditure method: GDP = consumption + gross investment + government spending + (exports ? imports). The GDP is the value of goods and services produced in a country within one year. Economic growth refers to the increase in GDP which leads to the improvement in the standard of living for the citizens of a country. Steady growth in the GDP leads to additional earned income which leads to buyers of homes which is beneficial to Wimpey homes. The increased share prices and firms declaring profits is a good indicator. 4) In the boom period it is harder to find the right person for a new job at Wimpey homes. ...read more.

Conclusion

Input costs are the cost of direct material, labor and other overhead items for the production of houses and other properties produced by Wimpey homes. The input costs will affect the business from high and low period s of inflation. The input costs for Wimpey homes would be very high as buying the building materials to build the houses will be expensive and the costs of wages would rise. In the low periods of the inflation the input costs would be low as the building materials would be cheaper to buy and the wages for the employees would be less or just the average amount of money that they should get paid. There would be an increase in the sales of good and services in the periods of low inflation as the business and the consumer confidence is high. However the sales of goods and services would increase in the periods of high inflations. This is because consumers will not be able to purchase house as they may not be able to afford it and will refuse to take out loans and mortgages because they may not be able to pay the money back. The ability to expand will be present during low inflation as profits will be very good for Wimpey homes and they can expand into more regional areas or on a global scale. Whereas, the ability to expand during a high inflation period will not be present and will not be very good as the cost would be higher than it normally is. Unit 38 Qasim Matsemela ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Case Studies and Analysis section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Case Studies and Analysis essays

  1. Marked by a teacher

    Skills and Knowledge Needed to Work In A Business Environment

    5 star(s)

    that result from your office and explore and see if there are green substitutes for them. Another way to practice energy efficiency, especially in the summer, is to loosen up dress codes and open windows rather than air condition. Consider opening windows on the top floor so rising heat can

  2. Business plan. The business that I am going to produce is a personalised logo ...

    This I will use to fight against my competitors. Weaknesses are things that may cause problems within my business, these are the downsides that may occur during a businesses life. I think my weakness will be similar to a lot of small businesses starting up, getting your company known, I think that unless I invest in a lot of

  1. PEST is a planning tool which is used by a business to evaluate and ...

    They have strong views on the things they believe in and wish to influence some aspects of society. This helps maximise the affect that these groups have because a group of people working together will have more effect to change something than an individual.

  2. The Impact of Migration on the Reduction of Poverty

    However, quantitative inferences drawn in a working paper most relevant to the study is also provided. 1.7. Ethical Issues: There is no known ethical dilemma in the carrying out this research. 1.8. Conclusions This Chapter has dealt with various background issues relating to the Research Study we have undertaken.

  1. This news feature is for the chamber of commerce and will be looking at ...

    This is maybe because New Look thought trading in other countries will bring them more money rather than just trading in the UK when the recession was about to start. In 2009 the GDP dropped dramatically to -2 this shows that in 2009 the UK was going through a financial crisis.

  2. The international business environment of Apple Inc

    The education of those in that country have led to minds that have enabled technology to increase to the next level, which has allowed many companies to be successful. Many other countries are restricted to the education that can be given such as India where not every child attends schools, colleges or Universities.

  1. Nestle stakeholders and business environment

    Supplier is a one of the important stakeholder for the firm. Supplier provides the necessary raw materials that the firm?s need to produce its products. Supplier is a one of the important stakeholder for the firm. Supplier provides the necessary raw materials that the firm?s need to produce its products.

  2. easuring The State Of The UK Economy And Its Effects On Honda.

    There are five different indicators of an economy?s status which can be measured to indicate how well it is doing. These are: 1. Changes in Gross Domestic Product (GDP) 2. Rates of inflation and deflation 3. Employment Rates 4. Trade Surpluses/Deficits 5.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work