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Church & Dwight: Economy Factors Affecting Business Case Study

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Updated: Apr 9th, 2022

30 External Factors of Economy Affecting Businesses

There are numerous external factors of economy that affect businesses in various countries. They influence different business aspects. In this context, the first one is GDP. The total value of commodities a country produces in a given period (GDP) indicates the income rates of the concerned citizens and their buying trends.

Consequently, this economic factor is able to influence the establishment, ratification, and propulsion of any business in the concerned country as indicated earlier. Church & Dwight Company can be affected by this factor since it operates on domestic products. The second factor is liquidation.

This is notable when an organization runs bankrupt thus incapacitated to operate efficiently (Pride & Ferrell, 2012). Consequently, its assets are sold to repay creditors. The remaining resources are distributed among the shareholders. Liquidation can affect thriving businesses in any given country.

Another economic factor in this context is the recession. This refers to a significant decline in economic activities characterized by low income and less spending.

Inflation is another economic factor indicated by considerable increase in prices among other economic provisions. These are external economic factors that can affect any business in any country.

Another considerable factor is the monetary policies established and embraced by any given country. It affects businesses, transaction trends, and other considerable monetary provisions in the entire business context.

Unemployment is another factor with a massive influence on businesses. It lowers the general income of a country and the ultimate spending trends. Similarly, underemployment is another factor to be considered in this context.

Another economic factor is the Balance of payments (BoP), which entails all records of dossiers of transaction amidst a particular country and the rest of the world. It contains the aspects of imports and exports among other considerable financial provisions.

Another factor considers the aspects imports and importation trends. This might affect the supply of required goods and services. Similar export (exportation) is another factor of economy affecting businesses.

Additionally, foreign exchange rates function as a considerable economic factor. They determine the fates of international businesses and monetary transactions. This is a substantial provision when considered critically. Another factor is the interest rates charged by financial institutions in the concerned countries.

This might affect lending opportunities and monetary circulation. Demand/supply likewise affects businesses in diverse states. A constant and reliable supply/demand of goods and services is a prominent provision in the entire business context. Another factor is the economic growth and development within the concerned countries (Larson, 1973).

A country with a considerable economic growth will favor its established and well-structured businesses. Transport cost is another economic provision in this context.

Efficient movement of goods from one place to the next is a crucial phenomenon. Money and banking is another economic factor that determines the establishment, ratification, and maturity of most businesses in any country.

Businesses need a reliable medium of exchange and efficient banking services. The general price level of the concerned goods and services equally affect both local and international businesses. Customers prefer quality and affordable commodities.

Concurrently, the general income of the public is another considerable economic factor. It affects businesses by influencing spending trends mentioned earlier. Similarly, the aspects of marginal and total utility can also affect local and international businesses such as Church & Dwight Company.

Another factor is the cost of living experienced by the majority. The cost of living has increased tremendously in the recent past hence disfavoring numerous businesses in the realms of sales and profitability. Another factor is the economic stability of a given country (Chin & Ng, 1996).

This will influence business trends considerably. Established and imposed taxes are another factor of economy in this context. The factor might favor or disfavor some businesses in some countries. Operational costs and debt financing are other considerable economic factors influencing business in various countries. Another factor is technology.

It propels businesses by establishing and inducting new business models, transactions, and efficient operations. Concurrently, market and trade cycles have affected businesses considerably. Another factor includes home economy trends, which dictates the lifestyles and other considerable business provisions.

Specific industry factor is another economic provision that determine the required business prowess. Lastly, another factor is the market routes and distribution trends established and assumed by the concerned businesses in the given countries.

15 factors of economy that affect Church & Dwight Company directly

According to the case provided, Church & Dwight Company relied on acquisitions and management changes to expand its domestic product offerings and improve its international footprint and reach. There are various economic factors that can apply in the Church & Dwight’s situation with remarkable implications.

Most of these factors can be considered as either opportunities or threats depending on the situation. Firstly, GDP of various countries might affect the establishment and prowess of Church & Dwight Company in its respective countries of operation. GDP dictates business trends and spending vulnerabilities among businesses.

Substantial GDP is an opportunity to the concerned businesses. However, struggling GDP might be a threat to the concerned business. Liquidation is also applicable in the Church & Dwight’s situation (Sander & Slatter, 2010). It can promote the sale and disposal of the company’s assets with devastating implications. Inflation is a business threat.

It can equally affect Church & Dwight in the realms of sales, revenues, and profitability. Another factor is unemployment (a threat). It minimizes the income of the victimized individuals hence limiting their spending capabilities. This will affect Church & Dwight business wise.

Additionally, the aspects of import and export can actually affect the company in the realms of supply and demand. Imports and exports can be opportunities depending on the situation.

The interest rates charged by banks can actually affect the company in case they are imposed unfavorably. This is a considerable provision when scrutinized critically.

Church & Dwight might fail to borrow money for expansion due to higher interest rates. This 160 year-old company and its ARM & HAMMER brand products might need loans borrowed at affordable rates in order to expand internationally.

Demand and supply of the company’s products is a considerable factor in the realms of economy and business growth (Marger, 2012). Additionally, the aspects of foreign exchange rates might equally affect the company. Economic growth and development of various markets globally can actually affect the company in numerous ways.

Transport costs can also affect Church & Dwight both internationally and locally. Poor transportation means and other relevant security concerns might affect the company adversely especially in its visionary missions. This provision is a threat to the business.

Efficient money and banking can be a critical opportunity to Church & Dwight. Technology is another considerable factor affecting Church & Dwight in this context. It is an opportunity if well embraced.

Cost of living is another factor/threat to the Church & Dwight business wise. Additionally, huge taxes imposed on the company can affect its businesses globally. This is a considerable business threat.

References

Chin, A. & Ng, H. (1996). Economic management and transition towards a market economy: An Asian perspective. Singapore: World Scientific.

Larson, C. (1973). Persuasion: Reception and responsibility. Belmont, CA: Wadsworth Pub.

Marger, M. (2012). Race and ethnic relations: American and global perspectives. Belmont, CA: Wadsworth Cengage Learning.

Pride, W. & Ferrell, O. (2012). Foundations of marketing. Australia: South-Western, Cengage Learning.

Sander, P. & Slatter, J. (2010). The 100 best stocks you can buy, 2011. Avon, MA: Adams Media.

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