Economics Periods and Influence of the Government

2021-05-06 02:26:45
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During a Boom Period

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During a boom period, the economy grows and output is usually high. Therefore, GDP also increases. Businesses have more confidence during boom period since consumer spending is at high. People have more surplus money to spend. For enterprises like Nike, they would expect more sales in their product which leads to increase in profit. In addition, Nike would expand due to a high number of people turning up for their products. This means they would open new stores, new shops and new avenues for their products and services. More customers creates a good client base, in return Nike will establish an increase of profit of the company. During this period, the government will have more money which means that budget of council will be increased and taxes will lower as well; this means that Nike and York City Council will benefit from it. However, one of the problems faced will be high competition as people have more money to spend so there will be more competitions in the market. This will lead to decrease in sales. It will mean that company got to spend extra money onto advertising, which might increase amount of customers coming into the business. Interest rates will rise in order to stop spending much money. Nike can have many opportunities such as expansion, increasing profits and etc.

In a Recession Period

Recession is the period when the GDP is growing at a low rate. It is characterized by a fall in economic growth rate. In this event of fall of the economic growth, there happen to be low employment levels. Businesses have less confidence because not many people are able to buy their products. Additionally, companies find it challenging to push through price increases and are in constant danger of closure if their strategy will not pay off. For company like Nike, they would experience a decrease in the growth of sales. They will contract which means banks and other companies that can be source of money, as in, this period businesses have a little money that they can spend. This will decrease profits of the Nike, as less people are able to buy their products. Additionally the government has less money that they give to budget of cities; this means that York City Council will have less money that they can spend. However, there is also a tremendous disadvantage, as there will be lots of other companies and customers that will tend to buy from the cheapest companies in the market. Moreover, companies might spend extra money on promotions and advertising. It is risky for these enterprises to invest in advertisements since there is risk of it not being profitable. For Nike Company, it will lead to decrease of opportunities, such as reduction of production in order to save more money.

Effect on Nike during Boom Period

Nike will have high sales figures, as population will have more extra money to spend. To increase those sales, they will need to put up advertisement that will attract people. Business also will do expansion in order to have more stores where they can retail their products. They will also sue more factories. This will allow company to make more sales which will lead to significant increase in profit. Demand for Nikes product will increase massively, as people will have more money to spend. Nikes products will be on more demanded. However, the demand will depend mostly on how effective advertisement was.

Expansion: Nike will do expansion that would entail opening more stores, increase the number of employees and open or use more factories. Nike will produce more products that they can sell. There will be higher sales figures because there will be more stores and employees.

Effects on Nike during Recession Period

There will be a high decrease in sales as more people will have less extra money to spend, and they will prefer to buy cheaper companies products, as these actions will save them money. It will mean that Nike should use advertisement to attract some customers; however this is high-risk action, as they might spend all their money on it. As a result of a decrease in sales, there will be a high drop in profit that is made by the company, this is because there will be not many people that can buy their products. Unemployment will increase as Nike will have to retrench some employees to save money. As a result of this, Nike will experience a drop in sales. This would be depicted in less stores and less employees that will offer services to customers.

Political Issues

These are all of the things that are under the influence of the Government for example taxes.

Taxes: Taxes have high effect on the Nike as a company. Taxes when levied at a high rate slow down the companys aims and visions. High taxes have an effect on shareholders. Nikes shareholders such as Adidas would give lower dividend. It would lead to fall off in their stock market strengths which in return also cause a shift in their position in market and they risk losing their position as market leader. High taxes will also affect employees as they will receive lower pay from the company. Company will struggle to establish their goals of becoming market leader as well as increasing profit. However, this will affect York City Council in a positive way. The Council will be in a position to receive more money from companies, businesses and locals in higher proportion. It leads to the improvement of the environment of the city. In the event of the improvements, it attracts more businesses that facilitate the enhancements of quality of life of locals by making environment of the city better.

Budget Cuts: York City Council will be affected highly as they will have less money to spend on improvements of the city, which will later lead to increase of tax. Additionally, life conditions of locals will deteriorate as council will struggle to provide extra facilities for the people. Resources will be overstretched and there would be motivation to achieve their aims. This is because they will not have enough budgets to invest into the city. The city will be less attractive to more businesses and thus there would be a decrease even further in the budget of the council. In some cases, companies leave town because of taxes, and because of sharp decrease of customers that are coming in. As for Nike, it is not exempted from this as it will be affected too. Nike has got stores in York. Nike facilities will be limited; it is with great concern that this would prevent new customers from coming into the business. Therefore, it will decrease profit of the company. It also implies that, if York City council will struggle to build roads and car parks it will lead to challenges. Take, for instance, stocks for these stores will not be delivered for sale on time. The stores will also be inaccessible for customers due to poor infrastructure. In long run, it derails Nike as a Company from achieving its aims. This will be influenced by decrease in profit, decrease of shareholders as they will sell their shares because company shares price will go down.

Budget Cuts happens in Recession period, it means when people have little money to spend, it leads to decrease of customers as few customers will be available to purchase their products. Infrastructure These particular issues can be viewed in two different aspects. Firstly, there is a positive view where both will be in a beneficial position. Nike will benefit from improvement of infrastructure of the city as it will bring extra customers to the business premises. Additionally, the stock will be delivered on time and it will lead to increase of profit. Increase of shares price that will lead to increased dividends and this means that shareholders will be in a beneficial position as well. In the event that the movement will provide high speed internet, it will lead to more customers through online sales. There is an element of enhanced arena of Adidas products. As for employees, the number will increase as they will have to recruit a team of assistants. Improved education on the other hand, leads to more skilled employees. The company will be able to recruit people that are already trained and they therefore can begin working after being recruited with minimal on-site training if any. Money and resources are saved in these instances since there is no budget allocation for employee trainings. Companys performance will be enhanced as well as realization of profit which is also one of the aims of Adidas. Another beneficiary is York City Council, it will be beneficial in the sense that as more people come into the city, it will mean increase of budget of council. When the budget of council increases it will lead to further improvements and reinvestment into infrastructure of the city. As business profits increases, it will mean more money going into council due of the profit from tax and revenue collection.

Higher Internet Speed will lead to improved performance of the council from most of the taxes payed online. Online tax management would enhance efficiency and save lots of time for employees in the council. Furthermore, education will lead to higher skilled employees in the council which in return may improve infrastructure even further. This will be reflected on the extra profit for the council. High skilled employees will be preferred for big companies in the city. Due to wage tax it will bring extra money to the budget of the council.

Secondly, there are negative aspects of infrastructure. To begin with, poor infrastructure of the city will mean that Nike will have lower profits due to fact that low people would turn up to buy products.

For unpleasant reasons stock might not reach the stock store on time due to poor infrastructure and in most cases, this contributes to bad image of the company. Poor internet coverage entails fewer people being able to access them. In the event that Nike decides to choses to use internet services to advertise its goods and services it will mean that it will incur loses as many locals will not have this information about their product range, services offered, terms and conditions, locations of stores among others.

As for Education element, if it is poor in offer, it would mean that new employees need to be trained as they may not be well conversant with work requirements. Training in this case will lead to slow attainment of aims as much time is channeled towards training of workforce. On the other hand, for York City council it will lead to decrease of budget as businesses will earnin less money, less people will come into the city, and businesses leaving city or closing their stores will be on the rise. All these decreases budget of council greatly.

We find that slow internet or lack of the same in some areas will cause limited or lack of tax remitting via the internet and such people will be forced to go and pay by check which is time consuming for Council and Local people. If the education is never improved, it affects council. In this case, they will always offer various training such as onsite training to equip their employees with the relevant skills for the tasks. Extra money is hence needed for training of employees to meet their tasks.

Legal: Legal is a part that entails laws. Legal aspect involves due process and respect for laws.

Socia: Issues Social issues are issues that companys got to deal with people.

Population Growth Nike will be affected by population growth in positive way. The bigger the population, the more the number of customers and employees. It is quite imperative at that if a country has a high population growth, it essentially means that there would be ready workforce and potentially more sale can be made. Moreover, York City Council also will be affected. It will be affected in the sense that more employees mean they will also have more potential expertise.

The Council will also benefit from the...

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