Economic change on functional areas of a business

Marketing: If there’s an increase in the GDP - a business might want to introduce premium range products & advertise them more as consumers will have more money to spend

Operations: If GDP increases then the output might also increase - sales may also increase as consumers’ total income would have also increased.

HR: If GDP increases then there might be a demand for higher wages due to higher taxes

Finance: Profits will increase as sales increases.

Marketing: If there’s an increase in taxation then products might see less demand as consumers will have a lower income. A business may consider offering special offers to maintain & boost sales.

Operations: Increase in taxation could mean that consumers have less to spend on goods & services - reducing the businesses output as they won’t need to produce as much.

HR: May need less staff so recruitment will drop. Redundancies may happen in the long term. Staff may demand higher wages because of higher taxes.

Finance: Increase in taxation could mean that consumers have less to spend on goods & services - reducing the businesses sales - therefore profits will also fall.

Marketing: Increase in exchange rates means the goods & services offered by a business may be more expensive in foreign currency. Marketing can try to justify this price by promoting the benefits of the goods & services.

Operations: Increase in exchange rates mean - businesses that import will be able to buy cheaper goods & services & businesses that export will see less demand. A decrease means - greater demand from abroad for products. Input price will increase if raw materials are imported.

Finance: Changes in the exchange rate can also indirectly impact your business, even when you do not buy or sell goods and services overseas.

Marketing: Might have to increase their prices to cover higher costs potentially from input costs.

Operation: Might want to reduce their costs - maybe switch to a cheaper supplier.

Finance: As the inflation rate increases, banks, and other financial institutions could start charging customers more as they would want to cover their costs.

Marketing: Marketing may consider targeting markets internationally due to no barriers in order to promote goods & services to wider TA.

Operations: A business may consider producing overseas as there aren’t any barriers & make use of international suppliers.

HR: Might want to recruit more staff internationally to scout more talent globally - this diversifies the business.

Finance: An increase in efficiency and competitiveness; A reduction of resources used in the production of goods.

Marketing: Might be able to increase prices steadily in a protected market and there may be no need to market as much since there’s less competition

Operation: Output may increase if sales rise because of lack of foreign competition but a business may lose sales if there’s retaliation - which reduces their opportunities to sell abroad.

Finance: Protectionism leads to retaliation and therefore higher import prices and higher consumer prices.