Boom
A boom takes place when there is a full capacity of growth taking place in the economic environment, these growths include the following, such as: a rise in the rate of employment and wages, a raise in stock market accompanied by a rapid increase of consumer prices which is known as inflation. Government tax revenues will be increased at a faster rate, company profits and investments often increase, and a rise in productivity etc.
Jet Petrol - recession
If a recession takes place, then it is likely to have an impact on Jet Petrol, as it will affect the company’s progress by creating a negative impact in the economic environment. The type of changes a recession would impact towards Jet Petrol station is listed below…
- Due to the current recession taking place in the UK, the VAT has increased by 20%, this is a negative impact as it causes an increase of prices. Therefore according to Jet Petrol, this company will need to increase prices towards the products they sell, and because of this the business may lose a few customers due to the increase of prices. As some people may not be able to afford purchasing petrol for their cars if it is too expensive.
- The owner of Jet Petrol may proceed towards making some of the employees redundant, as the recession has increased therefore the employees weekly/monthly wages are likely to have also been increase, so in order to cut down on costs the manager may consider on appointing a shortage number of staff.
- Jet Petrol may need to cut down on a few costs, such as: performing a drop in their stock market as the sellers are likely to increase their prices due to recession. Therefore Jet petrol may have a certain budget at which they tend to spend towards ordering goods from the suppliers and according to an increase of VAT the new stock prices may have increasing and exceeded over the company’s budget limitations.
- Jet Petrol may have to decrease certain prices for some of their products, because due to the recession situation taking place, the customers are likely to be cutting down on costs by saving money. So if Jet petrol would like to continue gaining customers and earning cash, they may need to consider on lowering the prices of their products. Also this is necessary for a company such as Jet petrol, because if the company do not earn a sufficient amount of cash that can help operate the business efficiently, then the Jet Company is likely to be losing out on profit and may end up being involved in a situation of getting bankrupt.
Jet Petrol – boom
A boom is when there is a full capacity of growth taking place in the economic environment. If a boom occurs, then companies including Jet Petrol are likely to continue making a progress more efficiently, as there will be more consumer demands and an increased rate of products being sold. The reason for this would be because the customers will have obtained more cash due to recession being down, therefore they may be able to spend more than usual, and the positive impact of this would be towards the Jet Petrol, as they will be likely to make a profit and possibly earn more cash than what they had expected and by obtaining this, the company will be able to continue succeeding and ordering more stocks from the suppliers and paying the employees weekly/monthly wages without any hesitation due to the profit margin being high.
Supply and Demand
When an organisation manufactures products, then they decide to supply other companies with those products at different price rates, the suppliers are likely to supply their products for a high rate of prices towards companies, in order to make a profit. Also the suppliers meet the demand of products, by manufacturing certain products that they believe are likely to be sold at a specific term. This also benefits the suppliers, because if their current products are often sold to a business such as Jet petrol, then this shows that they are able to meet the customers’ demands, then other companies are likely to order more goods from them too, which can then lead the suppliers towards achieving a higher rate of profit.
Competition
If a recession is taking place, then many businesses such as Jet petrol would need to decrease the prices of their products, the reason for this is not only because of the increase of the supplied products, but because there are other similar competing petrol stations that may also be going through the same situation. Therefore this shows that there is now a competition of prices going on between Jet petrol and other similar companies that provide the same type of service as they are all looking forward to continue surviving, by gaining customers and making a profit.
However if a boom is taking place, then it is likely that there will be a decrease of competition in the economy, as companies such as Jet petrol will be likely to continue making a progress more efficiently, due to various different reasons, such as: being able to meet more consumer demands which can then leads towards an increase in the rate of products that are being sold, customers would have more cash due to the low rate of recession therefore they are likely to spend more than usual in their daily shopping, therefore many businesses will continue to gain new and regular customers. So there will be a decrease between the competition of one business and another.
Affordability
Affordability takes place when there is a decrease in price ranges, which then leads towards certain goods being sold to the consumers at a more affordable price. A business may use this as an advantage by selling goods which are demanded by the consumers and then selling those specific goods at a cheaper price, in order to increase their sales.