The paper "A New Approach to Financial Sector Development" is a wonderful example of a Business Case Study. This essay presents an analysis of the legal, cultural, financial, political and economic factors that an Australian cider producer should consider before exporting cider to Scandinavia. Scandinavia is a region in Northern Europe comprising three countries: Sweden, Norway, and Denmark. The factors that are analyzed in the essay (cultural, financial, political and economic) are part of the macro-environment in which a business operates or intends to operate and affect the success or failure of the business.
The macro-environment is defined as the entire environment in which businesses operate or the environment that surrounds the businesses and their marketing environments (Nieuwenhuizen, 2007, p. 9; Nieuwenhuizen & Rossouw, 2008, p. 20). The macro-environment comprises a wide array of variables that can impact a business either negatively or positively (Nieuwenhuizen & Rossouw, 2008, p. 20). These factors are outside the control of any company or business (Ghuman & Aswathappa, 2010, p. 37). Therefore, the purpose of the essay is to provide an understanding of the above-mentioned factors with respect to the market in the Scandinavian countries and the impact of those factors on the ability of an Australian cider manufacturer to operate successfully by exporting products to Scandinavia.
In other words, the essay will examine how the aforementioned factors can impact the Australian cider producer’ s capacity to get an adequate rate of return (that is to be profitable) by exporting cider to Scandinavia. The factors are grouped and analyzed in the sections that follow. Economic /Financial Environment The economic or financial environment of a business refers to the macroeconomic factors that characterize that environment.
Macroeconomic forces have an effect on the general wellbeing and health of any given country or a regional economy in which an organization operates or intends to operate, which consequently affects a company’ s or an industry’ s ability to earn a sufficient rate of return in that country or region (Hill & Jones, 2010, p. 64). According to Hill, Jones, and Schilling (2015, p. 69), there are four key macroeconomics factors: the rate of economic growth, interest rates, the rate of inflation (or the opposite, which is deflation), and the prevailing currency exchange rate. The economic growth rate of a country or a region is important because when the economy grows, it results in an increase in consumer expenditure and tends to create a general easing of the competitive forces within a given industry (Hill & Jones, 2010, p.
64). That is, countries or regions that are characterized by an expansion of their economies are likely to have more people willing to use their money to buy different products. As well, the resulting high demand for different types of products implies that companies will find it easier to sell their products and expand their operations when a country or a region is experiencing economic growth. Interest rates can also affect the demand for a firm’ s products.
In particular, high-interest rates limit access to credit and thus reduce spending by consumers while low-interest rates increase access to credit and can thus increase consumer expenditure (Hill et al. 2015, p. 70).
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