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For this task I have decided to look at how many different changes in the economic environment can have an impact on Keith Ian Estate Agents.

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Introduction

Evaluate the impact of changes in the economic environment on Keith Ian Keith Ian is a well established estate agency they have extensive knowledge of the Hertfordshire area since the 1970's. They were founded by the late Keith Sampford and Ian Robertson. They pride themselves on providing a high level of personal service. They offer a service whether people are selling, renting or buying. For this task I have decided to look at how many different changes in the economic environment can have an impact on Keith Ian. I have identified these changes to be; * The rate of inflation * Interest rates and the availability of credit * Position on the economic cycle * Government policies * Unemployment levels * Globalisation With these points recognised I have priorities them, in order of most to the least effect that have on Keith Ian. I am going to look at how they affect Keith Ian's sales revenue, profitability and market share. Rate of Inflation Inflation is defined as a rise in the general level of prices of goods and services in an economy over a period of them. Inflation also reflects erosion in the purchasing power of money. Purchasing power is the number of goods/services that can be purchased with a unit of currency, in this case being pound sterling. Inflation has effects on an economy's performance and can be altogether positive and negative. High inflation may prompt employees to demand rapid wage increases this is in order to keep up with the costs of consumer prices. Cost-push inflation states that rising wages in turn can help fuel inflation. If employees of Keith Ian decide that they need a wage increase in line with consumer inflation then this could be bad for Keith Ian as they will need to make more money in order to make a higher profit which is less likely to happen so they may have to come to the conclusion that they are going to have to deal with the fact that they are loosing out on profit. ...read more.

Middle

Middle class are the main buyers of houses in a town like Ware. Ware is also deemed as a very desirable place to live therefore people are still willing to buy house in the local area. Other businesses during the recession are unable to survive therefore having to close down; this is a great opportunity for Keith Ian as they may in fact receive the flow of customers that were one going to its competitors. The term savvy shopper is associated with people who are very careful with their money and what they spend it on. These labelled consumers are a highly influential in the sales revenue and profitability of Keith Ian. They may generally in these economic conditions looking to buy a new house, as they know they are going to live there for a long time. These types of shoppers will help to push up sales revenue therefore increasing there profitability. Government Policies The government have many different polices which could be put in place, there principal aim is to keep the four many factors under control. This includes; * Rate of inflation * Economic growth * Levels of employment * Keep balance of payments in equilibrium Government policies can either be positive or negative for a business like Keith Ian. One of the recent policies the government has put in place is the reduction in spending; this can have an indirect effect to Keith Ian. In the spending cuts they've decreased the amount of spending on education. This therefore means that schools aren't going to have high quality up to date facilities due to the fact that they aren't receiving a big enough income to be able to afford it. This would make Ware a less desirable place to live, due to Ware having undermanaged schools. People may feel like they don't want to move to the local area because the schools aren't up to scratch and they want their children to have the best possible advantage of education. ...read more.

Conclusion

Glaxo relocating to another country mean that Glaxo won't be able to keep all their workers in which they were once employing; this could be a good or bad thing for a town like ware. With many people unemployed they could decide that they want to find other jobs in the town of Ware therefore helping to increase the productivity of the town. This could encourage more people to want to move into the town. Therefore more houses being bought, giving Keith Ian the push they need to become a successful business. Gaining them a high market share due to the fact that they are a prestigious estate agency so people are more likely to want to buy a property with them because they have high attention to detail with everything they do. For instance with my experience they take there shoes of when coming in to someone's house, on the other hand other estate agencies would look over this point. On the other hand having the relocation and the job losses could be really bad for Keith Ian, people may want to find a job as high up as they were before this could mean that they would have to relocate in order to do so. Therefore they have to move out leaving less demand for houses in Ware. This will consequently cause a decline in the housing market for properties in Ware, decreasing the sales revenue of Keith Ian. Making the business less profitable, and may not have the money to run anymore. On the other hand this could be a good thing for Keith Ian as other businesses could go bust due to the decrease in demand f or properties, as Keith Ian is a highly established business they may be able to last through this time and take all of the custom from the estate agencies in the local area who haven't managed to survive through the relocating of Glaxo. ?? ?? ?? ?? BTEC Business Claire Widdicombe Unit 39 (Exploring Business and the Economic Environment) (D1) ...read more.

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