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Unit 1 The Business Environment P5 P6 M2 M3 D2
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Lauren WhiteUnit 1: The Business Environment
Similar Businesses in Different Worlds
P5 - Describe the influence of two contrasting economic environments on
business activities within a selected organisation.
Economic
Importance of Stability
Business will want their economic environment to be stable. This is important because it
allows the business to analyse the demand for their products in the short and medium term.
Stability can also include ensuring that the deals made within your business are secure. An
example of this would be having the assurance that your creditor will pay you back in the
time agreed.
McDonald’s UK economic environment could be considered to lack stability. This could be
due to issues such as Brexit as the economic environment is uncertain as nobody is aware of
how Brexit will affect the economy. There isn’t any knowledge on what will happen to the
trading standards in the UK as an agreement has not been confirmed. This could affect
McDonald’s ability to trade effectively as they are unable to plan for the short and medium
term.
McDonald’s India is operating in a more stable economic environment. They have the
knowledge about how much revenue they will make meaning they know they will make
steady sales. In addition, India doesn’t face issues such as Brexit meaning they have the
ability to plan more effectively. Furthermore, McDonald’s India also producing products that
are more culturally specific meaning they will be in high demand in that specific economic
environment meaning they know they can make a good revenue. Therefore, their economic
environment could be considered as stable.
Impact on Business of Changes in the Economic Environment
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