Factors of Business Essay

The first implication that leave behind impact The job enterp produce is the European Union, which has been in a deep inlet this is because consumer have has f on the whole in allen, whilst unemployment places argon increasing across the European union. This has caused great concern to global markets as the possibility that Greece may not be able to pay of their groovy debts, this could resolving into the them defaulting the Eurozone, notwithstanding in that location is some stability but this website is very delicate because the European Central Bank and a similar the opposed monetary fund, have supported loans which have come with strict conditions attached. By Greece defaulting this could spell the end of the euro, which can have a great allude on all economies around the world, this could direct into an extension to the genuine recession because countries could be seen as an uncertainty to pay back, this ordain increase the espousal cost and they may even incr ease to unafthe businessable aims beyond 5%, a consequence loan may dry up confidential information to countries not importing in effect(p)s because they can not afthe business this. This would affect The business because consumers would only typeface to acquire essentials and get a car would be seen as a luxury.A major fault in the Eurozone is that all countries will have to have the same interest grade, which is not near(a) because they all have different very different economies. A found compositors case is that countries like, Ger many an(prenominal) and France have lot stronger economies than the PIIGS, which stands for Portugal, Italy, Ireland, Greece and Spain. The current EU low rate is 0.250%, which wills suite countries like the PIIGS, but it will also halt the put across of France and Germany. yet 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 than(prenominal) mountain to take loans because they are relativity cheap and this will allow more bills to be spent. Interestrates in the EU and UK will affect The business because if the base rate are low this is unspoiled because it will allow consumer to get cheaper loans allowing them to purchase the business luxuries like items, also it allows mountain to finance cars cheaper because the base interest rate is low.The tack rate will could work as a bene harmonize to the business this is because if some early(a) countries currency is weaker than the US this will mean they will look to lead astray 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 problems for The business because it will mean that some consumers may not be able to bear up under the companies products. bar ely an different 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 rude Policy (CAP), which attempts to rationalise farming and the production of food and other farmed produce, this is through 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 manikin of different countries, an example of this is The business who are an American business however they manufacture there cars across the world, this raises supply for countries to import and export goods. hitherto this can cause problems to whole global economy, a prime examp le is that this current recession started in the US where the original 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 propertys, these loans are kn bear as sub prime loans. The globally recession is worst in annals and it has lasted longer than the great depression or the Wall Street pick 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 authorisation 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 hike cost of Oil, this would result into the prices rising of all goods including food prices, which w ill result into consumers changing there buying patterns to ease the cost 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 reduction in 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 slight 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 output 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 companie s like The business manufacturing cars there it will create jobs, and also result into more money cosmos spent, which will boost the economy of these countries.The business are looking at bearings of keeping Carbon liberation down this is why they have announced they that they will use atomic number 13 alloys on there wheels instead of steal this is because it will reduce the saddle of the car and also by this happening means they can fit smaller 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 ea sing, this is a way that centrals banks use to boost the economy they do this by asking allowance 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 monetary 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 big boost. When the economy has recovered the central banks will sell the bonds it had purchased and then destroy the notes they have received, and this will mean that in the long term supernumerary money has not been created. However thi s comes with a few risk that the Germans in the 1920s and also Zimbabwe have seen, which was that they saw a huge rise in inflation.