Buy custom Describe and analyse the external environment of business.
Essay's paper info
| Topic: |
Business
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| Number of pages / Number of words: |
6 / 1482 |
Essay's paper body
Uncertainty is caused because firms cannot plan for their future effectively, because it is very difficult to predict the future of the economy when there is not a stable rate of inflation.
Consumers become price sensitive and the more brand loyal customers are likely to switch to a cheaper alternative...
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This affects the larger firms in the industry because they either have to lower their prices or increase advertising, which will both prove costly for them. However the smaller independent companies can benefit from customers becoming price sensitive because they will see sales increase, and if they can prove that their quality is good, when the economy becomes stable once again, the customers may choose to stay loyal to the cheaper product...
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