Question: Based on the case study, What economic factors that can affect business success are highlighted in the above text?
Question: Based on the case study, What economic factors that can affect business success are highlighted in the above text?
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Question:
Based on the case study, What economic factors that can affect business success are highlighted in the above text? Are there others that you can think of?
![Case Study
Alison Mitchell joined The Look three months ago. The Look is
a high street clothes retailer that is mainly based in the UK, but
has some stores in continental Europe. Alison is a management
trainee who recently finished her history degree at university.
She has just come back from a management presentation in
which the annual results of the company were announced. She
left feeling slightly worried and a little confused.
'I know the economy has been doing badly and this has hit
customer spending. Customers are worried about their jobs,
which is not surprising given the high unemployment figures,
and many of them have had their wealth hit hard by falling
house prices. The economic climate is making everyone a
little more cautious. This year's profits for the company were
nearly £6 million, which is higher than our competitors. But
the board of directors is apparently unhappy with this return,
given the investment that has been made into the business. It
wants a significant improvement in the coming year and
stressed our role in making sure this happens. Six million is
hardly a small number, but apparently it's not enough! We're
now looking at cost-cutting measures including switching
more to suppliers based in Vietnam. There are also plans for
revenue growth by opening up stores in emerging markets,
such as Russia and India. The growth rates of these
economies are much faster that the UK and the board thinks
that this opens up opportunities, although I don't think the
weak value of the pound will help the expansion plans. In the
UK, we've been told to prepare for a difficult future and look
for ways of working more closely with our stakeholders to
push up our profit margins.
What I don't understand is why none of the economists
seemed to predict this downturn. What's the point of studying
economics is you can't do anything with it?'](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc38a16b-4da6-499c-8b57-516e9bdd0026%2F3f7b8070-c46e-41f5-b002-817cfca1c67f%2Fzjn2pwj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Case Study
Alison Mitchell joined The Look three months ago. The Look is
a high street clothes retailer that is mainly based in the UK, but
has some stores in continental Europe. Alison is a management
trainee who recently finished her history degree at university.
She has just come back from a management presentation in
which the annual results of the company were announced. She
left feeling slightly worried and a little confused.
'I know the economy has been doing badly and this has hit
customer spending. Customers are worried about their jobs,
which is not surprising given the high unemployment figures,
and many of them have had their wealth hit hard by falling
house prices. The economic climate is making everyone a
little more cautious. This year's profits for the company were
nearly £6 million, which is higher than our competitors. But
the board of directors is apparently unhappy with this return,
given the investment that has been made into the business. It
wants a significant improvement in the coming year and
stressed our role in making sure this happens. Six million is
hardly a small number, but apparently it's not enough! We're
now looking at cost-cutting measures including switching
more to suppliers based in Vietnam. There are also plans for
revenue growth by opening up stores in emerging markets,
such as Russia and India. The growth rates of these
economies are much faster that the UK and the board thinks
that this opens up opportunities, although I don't think the
weak value of the pound will help the expansion plans. In the
UK, we've been told to prepare for a difficult future and look
for ways of working more closely with our stakeholders to
push up our profit margins.
What I don't understand is why none of the economists
seemed to predict this downturn. What's the point of studying
economics is you can't do anything with it?'
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