Factors of Business Essay

The first implication that entrust impact The stage bloodline is the European Union, which has been in a ample recession this is because consumer demand has f altoge at that placen, whilst unemployment counts are increasing across the European union. This has caused great concern to international markets as the possibility that Greece may not be able-bodied to pay of their outstanding debts, this could military issue into the them defaulting the Euroz unity, only at that place is near stability but this situation is very delicate because the European Central camber and also the International monetary fund, cast supported brings which have come with strict conditions attached. By Greece defaulting this could art object the end of the euro, which basis have a great presume on all economies around the world, this could conduce into an extension to the watercourse recession because countries could be instructn as an uncertainty to pay back, this bequeath increase t he acceptance cost and they may even increase to unafthe businessable rates beyond 5%, a consequence loan may dry up guide to countries not importing neats because they goat not afthe business this. This would affect The business because consumers would only look to purchase essentials and buying a car would be seen as a luxury.A study fault in the Eurozone is that all countries entrust have to have the same fire rates, which is not good because they all have different very different economies. A prime guinea pig is that countries equal, Germany and France have lot stronger economies than the PIIGS, which stands for Portugal, Italy, Ireland, Greece and Spain. The current EU base rate is 0.250%, which imparts suite countries like the PIIGS, but it will also halt the progress of France and Germany. However the UK can change their base rate, which is controlled by the Bank OF England, the current base rate in the U.K is 0.5%, this will encourage much people to take loans bec ause they are relativity cheap and this will set aside more money to be spent. Interestrates in the EU and UK will affect The business because if the base rate are low this is good because it will allow consumer to get cheaper loans allowing them to purchase the business luxuries like items, also it allows people to finance cars cheaper because the base interest rate is low.The exchange rate will could work as a benefit to the business this is because if other countries bullion is weaker than the US this will mean they will look to sell there for more profit because they will have to pay foreign currency for the product. So if the Euro exchange rate falls this could be seen good because it will mean that countries in the Euro will have to pay more for The business cars, however this can cause more capers for The business because it will mean that some consumers may not be able to afford the companies products. However another advantage is that this would mean that they could have cheaper parts from the suppliers because the exchange rate has fallen.In the European union there are many different rules that you have to comply with to get one of them is the Common Agricultural Policy (CAP), which attempts to rationalise farming and the production of food and other farmed produce, this is done by allowing subsides to be paid to farmers to grow certain crops, however money spent in the EU can not be spent on reliving unemployment, which is a major concern in all EU states.I am going to look at how countries are linked through globalised trade, this is because business are not based in just one country they are in a variety of different countries, an example of this is The business who are an American business however they manufacture there cars across the world, this creates supply for countries to import and export goods. However this can cause problems to whole global deliverance, a prime example is that this current recession started in the US where the orig inal loans where given to people who werent likely to pay and these loans back these then encouraged other banks to the same to allow consumers to purchase goods and dimensions, these loans are known as sub prime loans. The globally recession is worst in invoice and it has lasted longer than the great depression or the Wall Street crash in the 1930s. This has affected The business this is becausethey had seen a drop in demand for there product because people did not have the faith to purchase luxury items, however last year they have seen their profits go up by 26% in 2013, which shows that consumers are having more confidence in spending money, this is due to most countries have decreased their base interest rates.They are global concerns that will cause The business problems, a major concern would be the rising cost of Oil, this would result into the prices rising of all goods including food prices, which will result into consumers changing there buying patterns to ease the cos t of goods increasing. This would affect The business because they would have to pay more to suppliers because cost of shipping and delivery are rising, they would also see a little(prenominal)ening in gross sales across the world because Oil is more expensive, to result this they would have to look to make a reduction in manufacturing meaning jobs will be lost in countries, which will create a problem to country who will see an increase in unemployment rate and this will see consumers spending less money and this could result into countries going back into a recession.There is also issues for The business on environmental issues that is regulated by the world trade organsisation, who will look to make sure that the Carbon issue is reduced in the world. However there are suggestions that developing countries like China and India, have less strict environmental which gives them a competitive edge of other countries, by companies like The business manufacturing cars there it will create jobs, and also result into more money being spent, which will rise the sparing of these countries.The business are looking at ways of keeping Carbon emission down this is why they have announced they that they will use Aluminum alloys on there wheels instead of steal this is because it will reduce the weight of the car and also by this happening means they can fit little engines, which will lead to an improvement in fuel millage.However unlike Europe the global economy is strong in countries like China,where they have been very good, this is shown that they have had a sales increase of 52%, and they are forecasting that the chinese economy is going to expand by 7.5%, and they are going to see an increase of their market in China to 23 million vehicles. The business also have the leading vehicles in the world which is the The business Focus.There is uncertainty suing QE, which stands for quantitative easing, this is a way that centrals banks use to boost the economy they do this by asking permission from the treasury to create a lot of money, this is some by crediting their own accounts, they then spend this money on buying government bonds from financial firms like banks, insurance companies and pension funds, this makes the cost of bonds expensive, which then puts off other investors, which consequently means that the companies selling there bonds may use there money to invest into other companies or lend money to individuals. This would hopefully make banks and insurance companies to lend money to companies or individuals, the interest rates they charge should fall, which will result in more money being spent and this will give the economy a enceinte boost. When the economy has recovered the central banks will sell the bonds it had purchased and then destroy the cash they have received, and this will mean that in the long term extra money has not been created. However this comes with a hardly a(prenominal) risk that the Germans in the 1920s and a lso Zimbabwe have seen, which was that they saw a huge rise in inflation.