Learners are required to analyse the effects of fiscal and monetary policy decisions have on business. The “credit crunch” saw a temporary reduction in VAT and a fall in interest rates to historically low levels designed to stimulate demand. These changes illustrate the impact of fiscal and mon...
BTEC Level 3 National Extended Diploma in Business
Unit 38
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Pressures of UK businesses
Businesses in the UK have lots of pressures when they operate in their
respective fields. It is natural that these businesses suffer these pressures
so they can develop plans to escape from them. A pressure that can affect
UK businesses is the global economy and strong competition. If the global
economy is not stable, UK businesses will not be able to export any goods
to make money. UK businesses need strong competition in order for them
to succeed in the market. The more competition Curry’s has, the more
plans & strategies they can develop to achieve its aims & objectives which
are to increase sales & market share. Another pressure that UK businesses
might have is resources such as human, physical, and technological.
Curry’s need to make sure that their human resources is organised
correctly because without experienced employees, Curry’s will not run
efficiently. Curry’s need to make sure that they have appropriate physical
resources such as buildings to operate in and to have an effective
customer service. Customers will notice this and be willing to shop at
Curry’s. This will increase customer loyalty. Another pressure is financial
stability. As a business’s role is to manage its finances & pay off its debts
to survive in the market, UK businesses like Curry’s that are financially
stable can be able to increase its profits easily which will be easier for
them to invest in their business. Another pressure will be technology. UK
businesses such as Curry’s need to get the correct technology when they
provide infrastructure, produce goods, and online marketing. This will
benefit Curry’s because business activity will function quickly. Customers
will be able to receive goods quicker which will generate sales for Curry’s.
Global Factors
Trading Blocs- This is an agreement made by countries over the world to
reduce barriers of trade inside those countries. Examples of these barriers
are quotas, tariffs, and embargoes. Tariffs are the tax people pay to
receive trade from other countries. Embargoes are a ban to restrict the
exchange of trade in different countries. Quotas are a restriction to limit
the number of value, goods, and services to be imported & exported at a
particular amount of time. Examples of trade blocs are the European Union
(EU) which are most countries and the North American Free Trade
Agreement (NAFTA) which is an agreement between North American
countries such as USA, Canada, and Mexico. The European Union’s main
roles are to provide peace & equality in between countries in the EU and
to help increase business activity. As the EU is a trading bloc, it will benefit
countries’ businesses as most of them operate with the same currency. It
will be easier for them to send trade to each other as there will not be any
barriers & restrictions. As the EU expanded with over 26 countries, trade
has increased. There are greater movement with labour & capital. Trading
blocs benefit Curry’s because they will help Curry’s grow as a business.
Curry’s can be provided with greater technology that will help global
communication be more efficient. An advantage of trading 0blocs is the
Reference: BTEC Business Level 3 Book 1 & 2,
http://www.economicsonline.co.uk/Global_economics/Trading_blocs.h
tml.
http://ec.europa.eu/education/policy/strategic-framework/indicators-
benchmarks_en.htm.
http://www.kpmgfamilybusiness.com/business-risks-internal-
external-pressures/.
, economies of scale. The cost of productivity will go down allowing Curry’s
to afford producing more goods to sell to customers. Another advantage is
that Curry’s can be able to open new markets in different countries if they
wish. Another advantage is that more jobs will be created for people who
are looking for work. Another advantage is that Curry’s can be able to get
free trade from other countries without any restrictions.
Global Warming- This is an increase to the Earth’s atmosphere
temperature that causes irreversible changes in climate and that may
cause the greenhouse effect. Global warming will have effect on
communities around the world as the world will increase in heat which will
cause millions of people to die. The effects that global warming will have
on the world are people can lose their homes through floods, temperature
of the Earth will increase due to greenhouse gases which is caused by
humans. Global warming will affect transport & infrastructure which will
affect the transportation of goods. This will affect Curry’s productivity.
Imports & exports will also be affected due to the temperature increasing.
Curry’s and other businesses will be hugely affected as their premises will
sink due to flooding. Demand will also be affected as consumers will die
out of heat & de-hydration. Curry’s can be able to reduce global warming
by recycling waste & resources. This will reduce carbon emissions & save
money to purchase new resources. For infrastructure, Curry’s can
purchase energy-efficient cars, trains, and lorries to reduce pollution &
save money.
European Factors
Social Policy- This policy is created by the EU to give support to
consumers who are looking for work. This policy ensures that each
employee in a workplace must be treated fairly. The social policy focuses
on religion, race, sexual discrimination, and many others. The EU Social
policy ensures that there is no discrimination should take action anywhere.
The social policy promotes human rights between countries in the EU.
They also create campaigns to support human rights in the EU. The EU
social policy encourages trade to be imported & exported efficiently
between countries. It encourages EU manufacturers to build positive
relationships for more trade to be sent between each other. This will
impact on UK businesses like Curry’s because it will create a positive
attitude in the workplace. Curry’s staff will be able to work well with each
other thus increasing Curry’s business activity.
Education and Training Policy- This policy is created by the European
Commission to supply free education & training to European citizens. The
European Commission’s strategic objectives in succeeding education in
countries are promoting equity, improving the quality of education, and
improving creativity and innovation in training in fields like accounting,
entrepreneurship, and marketing. The EU gives grants to educational
institutions to sponsor educational activity. The European Commission
provides initiatives for people to develop their skills in work. One of them
Reference: BTEC Business Level 3 Book 1 & 2,
http://www.economicsonline.co.uk/Global_economics/Trading_blocs.h
tml.
http://ec.europa.eu/education/policy/strategic-framework/indicators-
benchmarks_en.htm.
http://www.kpmgfamilybusiness.com/business-risks-internal-
external-pressures/.
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