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Business Environment P5 & M2 GROWTH

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Peter Lewis

on 8 March 2014

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Transcript of Business Environment P5 & M2 GROWTH

Business Environment
P5 – Describe the influence of two contrasting economic environments on business activities within a selected organisation

M2 – Compare the challenges to selected business activities within a selected organisation, in two different economic environments
What is economic growth?

"Economic growth is an increase in the output that an economy produces over a period of time, the minimum being two consecutive quarters."

This could be measured by Gross Domestic Product (GDP) or Gross National Product (GNP)
Some reasons for economic growth can include:

Investment in technology
Increased productivity - task analysis and division of labour
Development of new production methods
Increase in the labour force
Discovery of new sources of raw materials
During a period of economic growth, the 'ripple effect' has far-reaching consequences, for example:

Income rises
People have more residual income
Spending increases
Productivity increases
More jobs are created
Business activity grows
The economy grows
In the private sector, a period of economic growth could mean that a business can:

Invest in staff training
Expand the range of products offered
Invest in technology
Employ more staff
Expand the business because more credit is available
Increase profitability and returns to shareholders
In the public sector, a period of economic growth can result in:

Increase the range of services provided
Invest in technology
Enhance the quality of the service provision
Create job opportunities
In the voluntary sector, a period of economic growth can result in:

Increased donations from members of the general public
Increased scope to work in partnership with the business community
Investment in technology
Improved potential to support their cause
A period of economic growth in one of opportunities for the business, such as:

Research and development - new products and services
Investment in equipment and technology
Enter new markets - The Ansoff Matrix
Training to develop a more skilled and competitive workforce
In the public sector, government organisations need to:

Review the range of services provided
Develop improved ways of working to enhance quality
Create efficiencies through investment in technology and staff
Establish positive partnerships within the community
Opportunities within the voluntary sector can include:

Increase promotional activities to increase awareness and donations
Establish partnerships within the business sector
Search for opportunities to increase activities related to the their mission
Full transcript