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In this assignment, I am going to write about a business that I am familiar with, KFC. I am going to describe how KFC will be affected by each stage of the business cycle.

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Introduction

1) Describe the likely effects on Balfour Beatty or a business of your choice of variations in the economic environment. In this assignment, I am going to write about a business that I am familiar with, KFC. I am going to describe how KFC will be affected by each stage of the business cycle. Business Cycle What Does Business Cycle Mean? Over a period of time, there are changes in the level of economic activity of the economy. There are years where the economic growth is strong and some years where it tends to be slow. The pattern of these changes is called the business cycle. When the economy grows, we notice that the number of employed people increase and the number of unemployed people decrease. There is more buying and selling in businesses and this encourages the businesses to employ more staff to make the goods and services to customers to buy. When the economic growth is slow, unemployment increases and a lot of people cut down on their spending. Business will notice that customers spending patterns have changes and this will affect them as they will not have enough sales and this might lead to them cutting down jobs, in order to cut cost. ...read more.

Middle

This increase demand and also increase business confidence. Because demand is very high, KFC will have to increase their product and also increase their prices. Because the level of demand higher than the ability of the economy to supply goods and services, KFC find it difficult as they don't have enough resources to meet the needs of the customer. They will need to employ more people with the right skills and qualifications, and during this period, it is going to be difficult to find a suitable candidate for the job as most of them are already employed. So in order to attract people to apply for jobs, KFC needs to offer a higher salary or something similar. Doing this might get KFC suitable employees but it will also increase cost, which they will pass on to customers in a form of higher prices. WHAT HAPPENS TO KFC DURING A RECESSION? During this period, the economic growth is very slow and unemployment is high. KFC will notice a low sales figure as people tend to save than spend money during this period. ...read more.

Conclusion

Economic expansion also raises concerns about inflationary pressure, which generally prompts monetary authorities to increase interest rates. This means that positive GDP readings are generally bullish for a given currency, while negative readings are bearish.http://www.fxwords.com/g/gross-domestic-product-gdp-uk.html Retail Prices: If retail prices increase, it indicates s that the economy is in crisis. Retail prices increase. Retail price index measures the changes in prices of goods and services bought for household use in the UK. An increase in the index means that prices have increase on average (inflation) and a decrease means that prices have decrease on average (Deflation) Property Prices: A rise in house price indicates a strong housing market, which generally means a strong overall economy. If house prices fall, they will not only leave house owners with negative equity, but it will also have an impact on the impact as it will course serious consequences for the wider economy. QUARTERLY BASIS: A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends: http://www.investopedia.com/terms/q/quarter.asp Every three months, the economic overview and outlook is published on a quarterly basis and it provides an in depth look at the main economic indicators. ...read more.

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