With reference to organisations or industries that you know, to what extent do you think that recent changes in the UK economy will benefit the long-term profits of businesses that operate in this country? (40)
Economy is the state of a country or region in terms of the production and consumption of goods and services and the supply of money.
The recent changes in the UK economy has seen dramatic fluctuations in consumer confidence, spending, saving and among business has effected the amount, borrowed, invested, saved and earnt. The recession in the UK economy in 2008 saw a dramatic turn for the worst, as GDP fell for two consecutive quarters. The U.K. are currently progressing through the stage of recovery where they have seen a steady rise in GDP with output increasing by 2% during 2015.
For some industries of luxury goods, with income elasticity the changes were detrimental for sales. With some higher end brands looking at ways in which they could remain profitable and maintain a profit margin; this was achieved through cutting cost. JLR offered workers sabbaticals while cutting costs and maintaining their workforce as demand decreased temporarily. This allowed them to remain competitive, as unlike other companies they didn’t make job cuts and could easily adapt again once demand picked up during a period of recovery. Industries such as discount stores offering inferior goods, eg. Poundland grew and became more popular, excepted and successful during the recession, slump and recovery that the UK economy was facing. Poundland was able to expand and invest during the recession and into the recovery in the Uk despite the turbulent period, they were beginning to open stores where the gap in the market hadn’t previously been shown, as more middle class households where looking to cost costs. The counter- cyclical nature of the brand meant that demand was increasing and the location in Twickenham had fallen in price as there had been no shop in that location...