Abdulalah Al-Jobore
Unit 38 - Business and the economic environment
P1
P1 Explain the effects, of changes in the economic environment on a selected
business
Introduction
In this assingment, I will be producing a thorough investigation using the extensive research
conducted by me, and demonstrating that I have gained a good understanding of how businesses
are affected by the economic environment. I will be making particular reference to how changes in
the economic environment affect Jaguar Land Rover.
Jaguar Land Rover limited is a British multinational automotive company that brings together two
highly prestigious British car brands. Jaguar Land Rover limited is a combination of two companies:
Jaguar and Land Rover, after Tata Motor acquired Jaguar and Land Rover from Ford in 2008, it
merged the two markets into a single company. Therefore, it is a limited company that designs,
develops, manufactures, markets, and sells various automotive vehicles in the United Kingdom, the
United States, China, rest of Europe, and internationally. What makes Jaguar Land Rover special and
unique is the fact that it offers luxury saloons, specialist sports cars, four wheel drive off-road
vehicles, and related components and services.
The Economic Environment
The economic environment has a combination of many different elements that have a significant
impact on businesses. Every country whether it is a small or large company have its own economy,
which is known as the economy or the economic system of the country. This system can measure
the features of a country as it works measurement tool as it the way that trade, industry and the
wealth of country is measured. In other words, the economic environment refers to the external and
non-controllable economic factors that influence buying habits of consumer and businesses which
resulting in affecting businesses performance. The factors are usually scaled either as a large-scale
(macro) or small-scale (micro). Therefore, the economic environment of UK will have significant
effect on businesses such as Jaguar Land Rover, as it will have important changes that could have
huge impacts on any business. This is because it will affect the trade between the country and other
contraries affecting the money passing in and out of the country, which is for most businesses such
as Jaguar Land Rover will be considerable issues since they are trading with other countries by
importing and exporting different resources from and outside UK. The reason behind this is that cost
of goods and prices rates will be affected positively or negatively.
The United Kingdom has a mixed economy based on the Capitalist system on free trade and global
economic, despite the fact that its limits being established by the government. Having a capitalist
economic system means this the United Kingdom economy is characterised by free markets and the
absence of government intervention in the economy. This revealing in have most of the decision in
the UK made by the markets, however some decision will be made by the government such as
‘’those relating to building, school and hospital construction, the supply of medicine in hospital etc.’’.
(UKEssays, November 2018).
According InterNations, the economy of the United Kingdom as an overall, was the second largest in
in Europe trailing Germany only, and number five in the world by GDP (Gross domestic product) with
a total of 2.848 trillion USD in 2015. This shows that the economy of the country is very health and
wealth in term of trade, industry and wealth of the country. In 2015, service sector such as banking,
insurance is the UK’s strongest sector alongside with other important sectors such as wholesalers
and retail trade, transports, accommodation and food services, public administration services (NHS,
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