Background
The external economic environment in which a business operates has a great impact on its performance. The economic environment consists of several external factors in a business market. In a similar connection, the broader economy can also influence a business. Economic environment can be divided into the microeconomic environment and macroeconomic environment. As far as microeconomic environment is concerned, it affects business decision making such as individual activities of firms and consumers. On the other hand, macroeconomic environment affects the whole economy and all of its stakeholders. Many economic factors have external limitations on the business and organizations always have little control over them. Macroeconomic influences are broad economic factors that either directly or indirectly affect the entire economy and all of its participants. These factors include interest rates, taxes, inflation, currency exchange rates, consumer discretionary income, savings rates, consumer confidence levels, unemployment rate, recession, and depression. Microeconomic factors influence how businesses make decisions. Unlike macroeconomic factors, these factors are lesser broad in scope and do not necessarily affect the entire economy as a whole. Microeconomic factors influencing a business include market size, demand, supply, competitors, suppliers, and distribution chains like retailer stores.
Companies coexist and evolve with their environments. Therefore, they are able to influence the environment to a greater extent (Brooks and Weatherston, 1997). Organizations influence their environments by affecting their industries or collaborating with each other thereby gaining restricted control over some part of their environments. The environment is, thus, not completely determined by external factors but can also be influenced by the organization (Ford, 1997).
The external economic environment of business plays a crucial role in determining the success or failure of a business. When interest rates are too high, the cost of financing projects may not help clients to expand. On the other hand, when unemployment rate is high, businesses can obtain labor at cheaper costs. However, when unemployment is too high, this may result in a recession and less discretionary consumer spending resulting in insufficient sales to keep the business going. In addition, it is always important to evaluate the market size to predict the project potential of business in the future.
Some of the external economic factors that can affect the proposed WindowsWear Museum are demand, competition, unemployment rates, and crime rates. In this paper, the positioning opportunities for WindowsWear will be discussed along with the related issues. Later, the impact that can result in profitable business and help WindowsWear achieve its goal of creating a market will also be evaluated.
Conclusion/Recommendation
The importance of the external environment in which a business operates has already been discussed. Surely, factors in a given external environment can impact the business economy tremendously. Therefore, a set of suggestions is proposed for WindowsWear considering the available information and resources. It includes how the Museum could take numerous steps to keep and maintain its status as one of the most exclusive places to visit in the New York City. As the creation of a business plan is excessively necessary for the success and reputation of any business, collaboration is the development of a business plan creation based on the client’s preferences, necessities, and perspective is also proposed.
Based on the mentioned information, several external economic factors may really affect the company’s economy. Thus, a business plan renovation combined with WindowsWear Museum competition growth is certainly imperative to supersede the top competitors. In order to achieve this goal, it is significant to study the marketplace on a constant basis. There are a number of ways to accomplish this goal such as creating a unique and exclusive schedule of activities for each weekend unlike the activities scheduled for week days.
It is also suggested that WindowsWear create an agenda for certain times of the year during which New York has is the setting of the Fashion Week. As the company mainly focuses on the fashion industry, further inspirations to elevate the business can be taken from the events and the Fashion Week.
Incorporation of the participation of various fashion designers is also recommended since the company’s main focus is the fashion industry. Such professionals in the field would make recommendations on what trends should be utilized to keep the latest fashion trends in displays. Similarly, fresh college students can also be hired as temporary employees who can develop a new innovative system. In this way, personnel dealing with customers on a day-to-day basis will be change every day. The utilization of special effect or holograms and other creative art forms can also serve as employees substituting the need of workforce. However, it is recommended to keep the same administration serving as managers or working on other higher positions.
In short, the business plan of WindowsWear should be modified accordingly to keep up with the latest fashion trends and to preserve the business standards and goals.
