ECONOMIC FACTORS COMPANIES MUST CONSIDER BEFORE ENTERING A NEW MARKET

The major economic factors affecting business organizations are: 1) Demand and Supply: The demand and supply are two principal factors that affect the working of any business model. The demand is driven by the will, necessity and ability of consumers to purchase our commodity and the supply is the ability of the business to provide for the demand of consumers. So we should ensure that we are capable of handling the demand in the market. 2) Banking Facilities: Banking facilitates refers to the availability of bank loans and the rate of interest that they charge. In order to raise a portion of the capital we need access to banks for bank loans at a reasonable rate of interest. 3) Economic Growth and Development of the Country: Economic growth and development of the country is an important factor because a stable economy reduces the effort put into adapting to the changes business environment and allows us to meet the objectives. 4) Income and Employment: We have to ensure that our products are priced in line with the per capita income of the targeted group. And also the density of employment dictates the rate of demand, density of demand and also the purchasing power of the people.

5) General Price Level: Another very important aspect of the economy is the general price level, like Cost of raw materials, cost of production and finally, cost of transport are some of the important components that determine the general price.

6) Trade Cycles: Trade cycles are the fluctuating costs of goods and commodities in an economy. Rise, stability, continuity and fall are some of the important cycles that affect the prices of all goods such as raw material, final goods, etc.

In conclusion we would like to say that every economic incident and factor affects the working of a particular business. So the discussed economic factors are all inter related and contribute to the functioning of the company. Thank You!!!!