Risk Factors of Bloomingdales Risk factors play a major role in today’s economy. Since we are stuck in the stagnation period and do not seem to be recovering for quite some time, businesses have to come up with a proper marketing plan that will help sell their products. All businesses suffer from the same risk factors. Some common risk factors include: product quality, price, brand loyalty, competition, managerial skills, etc. Many customers are shopping at lower priced stores because the economy is not allowing them to spend extra money.
However problems could quickly occur if the budget is not controlled and monitored effectively. Poor cash flow is extremely likely to bring the outcome in Debenhams not been able to shelter costs which may lead to bankruptcy; in a circumstance where a business has a poor cash flow produced by more outflows than inflows. In a case of poor cash flow due to poor budgeting, the business would have to lease the products and gather unresolved payments in order for the cash flow to recover. I would suggest for Debenhams to make better use of its premises. For example other stores have restaurants or cafes maybe they could add one to theirs to attract more customers and make more money.
If he relocates one of the stores he could also lose customers as well. The internal weakness include not wanting to hire outside of his family and the timing if he relocated one of his stores which he could lose current and potential customers due to the opening of West 9. He is not sure of his ability of running two stores either . External perspectives The characteristics of this industry are that with similar companies that are larger it greatly affects smaller companies with the cheaper prices that these companies can offer to customers. The firm’s strategy for differentiation is to be able to provide exceptional customer service by react quickly to competition
This document will show results from the cash flow forecast and analysis of any possible future changes that could be made such as selling price, increasing or decreasing costs, etc. Prices of materials If the prices of the raw materials that the company are using increase then this will have an effect on the cash flow forecast because the figures will change due to the prices of the raw materials. If the raw materials change price then this will change the money that is in the total outcome. This will affect the company because if the company is buying expensive material and not making enough money back from the sold product then it is likely to make a loss and the company could therefore go bankrupt. Figures on the cash flow forecast at this point will look very poor.
The price elasticity is important in business because it refers to the change in quantity demanded to the change in the price of a service or product. Elastic demand is a change in the price of the service or goods that can affect the demand. Will Bury product is different, and the success of his product can assume that the price can be elastic for his product. In the market, there are similar products that are available for different prices the lower the price may work out better in attracting new buyers. However, in Will Bury situation he may have to raise prices and sell more items to bring in more
In the next chapter we learn how sellers set the prices in which we pay for an item, why things cost what they do and not what they are worth. The key to prices are sellers that can sell their products as close to the cost of making the item. In a regular market, prices are the key. Businesses cannot afford to charge a higher price, customers are normally looking for a lower price and the lower the better, in today’s economy. Many customers ask the question, “What affects prices?” We learn that things happen beyond the sellers’ and buyers’ control to raise and lower prices in today’s market.
However, if the price goes too high, the demand will decline. The above descriptive model shows this relationship with the addition of the other costs associated with delivery of a product or service, which in turn affects price. The model shows that by adding the above costs together with price, demand will either increase or decrease. It is the assumptions of the above model are that along with the price (P) variable, the variables of advertising (A), transportation (T), and quality (Q) affect demand. One
Yes, the quality is different also. So the average consumer has to make the trade off of quality for price. The second principle of economics is connected to the first because making a trade off requires a comparison of the cost and benefits of taking an action. As stated in the previous paragraph, the consumer weighing the quality for a better price is one part of making the decision. Another part to the decision making process is comparison.
A market is where producers (like Tesco) and consumers (the customers) trade, e.g. goods are traded fort the consumers money. The market which Tesco fits into is the food and & grocery supermarket market, this market is very competitive as there are many large firms which rival it, these include; • Sainsbury’s • Morrison’s • Asda • Iceland • And Waitrose However despite there being many companies in a market, this is not an assurance that it will be particularly competitive, this is because the degree of competition is mainly based on market share, this is the % of the total unit or revenue produced by one company in a market, so it is possible for there to be 5 companies each owning 20% of the market, with each of the companies owning very similar (and therefore competitive percentages) this would be a lot more competitive then 20 or more companies all owning small percentages. The current market shares in the supermarket industry are; 1. Tesco: 30.6% 2.
Essay 3 When businesses find ways to internalize externalities they can make more money. Discuss why shopping malls charge a low price per square meter to department stores like Galeria Kaufhof, a medium price to stores like H& M, and a high price per square meter to jewelry stores and food vendors. “Externalities are the costs or benefits that affect people who are not directly involved in the production or consumption of a good or a service.” 1Thus, externalities are not limited to the parties participating in the market i.e. to producers and consumers but also affect other people in the society. Externalities cause deadweight loss which can lead to market failure.