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External influences

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NAME: Lashana Ricketts FORM: 10LE TEACHER: Mrs. Barton ECONOMIC CONDITIONS 1) Why do UK businesses need a stable economy? The economy is a delicate balance. The factors that are depending on a stable economy are: * The level of inflation- i.e. the level of price rises each year * The level of interest rate- how much it cost to borrow money * The strength of the �- which affects the exchange rate- the cost of trading with overseas countries. The UK businesses need a stable economy because if the economy were not stable, businesses would loose out. E.G. if interest rates were high businesses would not be able to borrow money for them to develop their businesses. So a stable economy ensures that businesses in the UK will be able to expand their companies. 2) Explain the current interest rate? Why is a high interest rate bad for your businesses? The interest rate is measured as a percentage and is the cost of borrowing money. ...read more.


If there is a high inflation the profit of both The Body Shop and GUCCI would have a decrease. If inflation is high the businesses would be affected in numerous ways. Some of these ways are: * Future money values become very uncertain * Planning decision becomes very uncertain * Price list keeps changing * Interest rates would be high so borrowing would be expensive Examples of what could be affected with high rates of inflation: The Body Shop and GUCCI * The making of the product would become very expensive because it would cost a lot more to buy the machineries * The ingredient would also become expensive and with expensive ingredient that will make the business loose money. ENVIRONMENTAL CONSTRAINTS Environmental laws for your businesses Waste duty of care The duty of care is a law says that 'you must take all reasonable steps to keep waste safe. If you give waste to someone else, you must be sure they are authorised to take it and can transport, recycle or dispose of it safely'. ...read more.


The qualities of both businesses are really high. They have to be high because of the price range of their products. With a high price rate the product is expected to be best in quality by everyone. Because of the success of both these companies their products aren't available to everyone. If you have a lot of money then you are expected to have at least one of each of these brands. The companies are both top of the line when it comes to clothes. If their products were available to everyone then all those celebrities would not be caught in them. Celebrities are the main targets for both of these companies. If celebrities are in these designers then people will try their best to save so that they too can buy a little luxury. As I said before I haven't found any differences but the one thing that I think will affect both GUCCI and Prada customers are the prices. I think that if both companies would at least make some products, which are less expensive, they would attract even more customers. It is known that some > NET--> http://www.defra.gov.uk/environment/waste/management/doc/ (15/12/04) ...read more.

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