Economic & Business environment of Unilever Company Ltd.

 

Task 1: Economic exchange impact on Unilever Company

Business and economic environment:

Unilever is a popular multinational global consumer products company in the globe. The products of the Unilever Company include cleaning agents, food beverage, and the personal care products. The economic and business environment of the Unilever Company consists of the internal and external factors of the local and global market. Worldwide there are various types of similar products organization that’s why Unilever has to compete with the others firm. They provide the utmost good products for the customers with a lowest cost than others. For the competition with others Unilever takes innovative marketing promotion policy. They have a good relationship with employees, customers, and suppliers. They collect data from the customers or suppliers and provide best qualities products with reasonable price in the markets than others that’s why till now they are a leading company in the world. The two main variables of the business and economic environment of the Unilever Company are the followings:

Ø  Microeconomic environment: The microeconomic environment is known as the individual actions as well as consumer actions of the UnileverCompany. The microeconomic environment of the Unilever Company includes the local and global market size, product market demand, product suppliers, supply variables, local and global competitors, different distribution channel of Unilever Company. Those variables impact a lot on Unilever Company. According to market size Unilever supply their products on the market because there will be a major issue if the markets supply demand system became inconsistency.  Unilever properly distribute the products on market. They also keep in mind local and global competitors and take strategic decision for the variable markets. Otherwise the market will be transferred to others organization. Thus they are making higher profit by giving these products facilities. (Pearson.J, 2009).

Ø  Macroeconomic environment: The macroeconomic environment of the Unilever Company involves the factors that have effect on the entire business economy of the Unilever Company. The macroeconomic environment involves factors such as: inflation rate, interest rate, taxation, savings rate, recession, depression, currency exchange rate, unemployment rate and different consumer confidence level. If taxation rates, inflations and interest rates go high then the products rate of the Unilever Company will be increased and it will be tough for them to maintain the markets. The products rates will go beyond the customers which affect the company’s profit. That’s why they take innovative strategy and plans for those situations.

The business and economic activity of the Unilever Company has affected by the changes or variations of microeconomic factors and macroeconomic factors of the UK economy. Like as, when the market demand and supply pattern changes, it has impact on the sale pattern, profit pattern and overall economic performance of the Unilever company. The competitors and suppliers of the Microeconomic variables also effect on the business activity and economic activity of the Unilever Company in UK. The changes in the interest rate of macroeconomic factors have effect on the economic activity of the Unilever Company. (Greenhaus, 2013) .

Government policies:

The government of UK also formulates different policies and procedures for operating the business activities in the local country. The government of United Kingdom formulates different policies that have positive and negative effect on the economic and business activities of the Unilever multinational company (Sawyer, 2013). The Government of United Kingdom formulate the policies on the business cycle like as economic policy, industrial policy, competition policy, regional policy, social policy, fiscal policy, transport policy, environment policy, training policy and education policy.

These govern policies has impact on the economic performance of the Unilever company in UK. For the implementation of the policy, the UnileverCompany was imposed different subsidies, non-financial and financial funds by the government in UK.  The operation costs of the Unilever Company areincreased. So the marginal operating revenue is decreased and it makes effect on the Unilever economic growth and sustainability of the Company in UK.

Government spending:

Government spending of United Kingdom changes within the country. The variations of the spending of the UK government make important effect on the business activity and economic environment of the Unilever Company. When the government decreases the spending of the government, the taxation on the corporate profit on the business is decreasedand theUnileverCompany pays little taxation on the corporate profit of Unilever Company. So in influence positively on the economic profit of the Unilever business environment and when the govern spending is increased more than before, the government increased that tax rates on the corporate profit on the business organization, then the Unilever company needs to pay more and it declared the operational revenue of the Business activity of the Unilever company in UK(Koontz, 2008).