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The Climate of the Economy

Essay by   •  July 15, 2011  •  Essay  •  502 Words (3 Pages)  •  1,582 Views

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ll businesses are affected by national and global economic factors. The climate of the economy dictates how consumers, suppliers and other organizational stakeholders such as suppliers and creditors behave within society.

As the economy is in a recession due to the financial crisis right now, it has the impact on the potential customers that they generally have less money to spend. Due to that fact, people might tend to keep the money in their pockets and cut down on expenses in their everyday life. One consequence may be that they reduce or cut down on restaurant visits. That can be seen as an advantage that they reduce visits to more expensive restaurants and instead visit less expensive fast food chains. In that an opportunity would arise for fast food chains like Subway. People do not want to renounce totally to go out for lunch or dinner and therefore they might choose more affordable places. Besides that, compared to other nationalities, Sins earn quite a lot. As a result they are not so affected by the crisis and do not have to cut down so much in their everyday life.

Population changes also have a direct impact on organizations. Changes in the structure of a population will affect the supply and demand of goods and services within an economy.

The unemployment rate in Singapore with its 2% (January 2010) is very low. Singapore has one of the some highest gross domestic products (GDP) per person in the world. In the same way, Singapore has very high per capita incomes in the world as well as the Asian.

Therefore, people have more money to spend. As a result, there are more potential customers for visiting fast food chains.

Socio-Cultural Environment

The third aspect of PESTLE focuses its attention on social forces affecting attitudes, interests and opinions. These forces shape who we are as people, the way we be have and ultimately what we purchase. Within Singapore, people's attitudes have been changing towards their diet and health in the past few years. They have become very conscious about their health. As a result, Singapore is seeing an increase in the number of people joining fitness clubs and a massive growth for the demand of organic/healthy food. Besides this trend towards healthy food, there I also a trend towards quick food as people work a lot and do not have so much time for cooking. Organizations must be able to offer products and services that aim to complement and benefit people's lifestyle and behaviour. If organizations do not respond to changes in society, they will lose market share and demand for their product or service.

Singapore holds a number one position in the world when it comes to their happiness index. Therefore, one can interpret that many Sins give importance to spending a holiday in sunny destinations, hanging out with friends in cafes or restaurants and having a

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