How Recent Economic Trends Influence Business Essay

How recent economic trends are influencing the business A firm and its management are affected by many factors present in its environment and this because a business can not operate in vacuum. The factors existing in a business’ environment are beyond control by a firm and the factors affects how a business operates and performs in the market (Li, 2008). Other macro environmental factors besides economic that affect business performance include political factors, social, demographic or ecological, and technology. The economy is an important factor affecting businesses since it determines level of profitability a business can receive from operations. In recent period the economy can has been characterized by recession and increasing†¦show more content†¦Rogers (2008) provides that Apple experiences reduced demand for PCs and the company has had to lower its prices in a bid to maintain high demand for its products and maintain sales revenue for the business. When there was an economic trend characterized by strengthening of the United States dollar, the company had to increase prices of products sold in foreign countries and this influenced demand for Apple products. Other economic trends that influence Apple include increase in fuel and energy costs and this influences the company in terms of demand for products and also cost of operating. A consumer has higher infinity or need to purchase fuel thus increase in fuel prices means consumers have less money to dedicate to other products translating to reduced demand for company products. The company also incurs increased expenses due to increased fuel costs thus the company experiences increased cost in producing and distributing its products. Increased expenses mean the company has reduced profit margin. Other economic factors that affect consumer spending behavior and could affect demand include labor costs, healthcare costs, mortgage market and access to credit. Recent economic conditions have resulted in reduced money to consumers thus reducing spending and thus the company experiences reduced demand for its products. RecentShow MoreRelatedFinance Is Based On Economics841 Words   |  4 PagesFinance is based on economics. Therefore, to properly understand financial markets and their behavior, you must first understand economics. Economics is the concern of production, distribution, trade and consumption of goods and services. It is the science that arises out of the relationship between limited resources and unlimited wants and needs by humans. 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