Research Methods Essay

492 WordsJul 23, 20142 Pages
Consumer spending is decreasing. Due to the current condition of the Australian economy, consumer confidence levels are reduced and consumers are saving disposable income rather than spending it. The economic factors resulting in this trend include an increase in the unemployment rate from 5.8% to 6%, an increase in the inflation rate from 2.5% in 2013 to 2.9% in 2014, and a cash rate of 2.5% which sits at a historical low. An opportunity that this trend presents is the ability of an organisation to focus on marketing the products and services offered to consumers in an appropriate way to encourage potential customers to believe they need a product rather than want it. Though this opportunity has the potential to give the business an edge over its competitors, there are several threats that this trend presents which have the ability to override any opportunities that the trend may offer to organisations. One threat includes consumers saving their disposable income rather than spending it. As an increase in inflation and unemployment rates has compromised the current economic condition of Australia, consumers have been reluctant to spend and have opted to focus on saving their disposable income. This in turn results in less sales, reduced revenue and leads to business failure. The relevance of these threats and opportunities is evident as the economy cannot be controlled or manipulated by any business owner. If it is not monitored or controlled appropriately, it can significantly impact a business both positively and negatively. Linked to this is the importance of consumers in the success of a business, as without consumers, a business will have no source of income and will struggle to operate. This lack of funds will have a significant impact on all stakeholders of the business, both internally and externally, as the business will not be able to pay their

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