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Written by:
Davida D
Date added:
August 2, 2014
Level:
University
Grade:
A
No of pages / words:
4 / 963
Was viewed:
1050 times
Rating of current essay:
Essay content:
The four most important of these forces are:
• the growth rate of the economy
• interest rates
• currency exchange rates
• inflation.
The growth rate of the economy leads to increased expenditure and, by increasing demand, reduces competitive pressures in industry.
• Lower interest rates determine a company’s cost of capital, and thereby its fixed cost structure, stimulating investment, but also lowering barriers to entry by potential competitors...
displayed 300 characters
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Planning under such conditions becomes hazardous.
• Price deflation on the other hand, increases the price of fixed payments.
• Companies with a high level of debt have to service this debt with a steady fixed amount, which will become more expensive under these conditions.
3. Technological forces
Technological forces can be seen as being both a threat as well as creating opportunities...
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