Euro zone crisis is a current affairs topic that has impacted the business world. This article will briefly describe its effects and identify which companies have been successful/unsuccessful at dealing with the issue and why?
The ongoing euro zone crisis threatens the global business world. Moreover, the UK is in a double dip recession. The recession forces businesses to cut down on their overhead costs, which often leads to redundancies. Consequently, this contributes to an increase in the UK’s unemployment rate, which results in consumers becoming price sensitive. Hence consumers reduce spending on luxury goods, which explains the current decrease in the luxury goods market. This has affected Nescafe coffee, which have experience a decline in their luxury goods. However, Nestle continues to invest in their research and development and are successful in bringing out innovative products in order to remain competitive in the current economic downturn.
Other businesses such as major retailer Woolworths have closed down as a result of unsuccessfully dealing with the recession. However, Woolworths are dealing with this by utilising on their online website, which remains serving its loyal customers, yet this is not as popular as their retail shops. Moreover, Peacock’s has also been unsuccessful in dealing with the recession and announced the closing of many of their retail shops. However, Peacock’s media coverage attracted a takeover by Edinburgh Woollen Mill, which has resulted in some of its stores kept open. In contrast, New Look has announced they have increased their profits from last year and therefore are successfully dealing with the recession by maintaining cheap prices and keeping up with the latest fashion trends. Moreover, New Look has further plans of international expansion to escape the recession and maintain competitive.
By iMeeta © 2012
iMeeta 