- the uk bedroom furniture market
- the period of 2008-2013 was very poor for furniture manufacturers although it has picked up in 2013 and then more quickly in 2014.
- economic factors
- real incomes have grown. this means consumers have more money, their pay has increased at a greater rate than the cost of living. if consumers have more disposable income then demand for luxuries like new furniture will increase. therefore retailers will place larger orders with manufacturers like af.
- employment levels have rise,. this means consumers will have more money, resulting in more people being able to buy furniture. this will increase the market and result in more furniture being purchased and therefore produced.
- interest rates potentially rising. interest rates are a cost to consumers if they are borrowing money. therefore they will have to make large repayments meaning they are less likely to spend on luxuries. in addition it might make them more likely to save rather than spend, reducing the demand for new furniture and home improvements(as well as buying new homes). af are likely to see a drop in demand for their products as customers spend less o furniture. thier costs will also increase and the case suggests that they have a lot of interest which will increase resulting in higher costs and lower profits. they may decide to postpone expensive investments such as the biomass burner as borrowing any money is more expensive and any money they have will be better to save.
- increase in competition from foreign firms. this will provide uk customers and therefore the end consumer with more choice. more competition will also lead to lower prices as firms compete to gain market share. more competition in the market will force af to lower their prices, given their high variable costs will mean that they have to make several cost cutting actions to remain competitive. especially as other foreign firms are setting up in the uk (inward investment SO THEY TOO CAN HAVE THE MADE IN BRITAIN BRAND.
- inward investment
- term given when foreign businesses set up in the uk.
- this means more employment for the local area-higher levels of consumer income-increse product demand. more competitive for aaf. benefits the local community as the local infrastructure will improve.
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