With reference to organisations or industries that you know, to what extent do you think that recent changes in the UK economy will have inevitably damaged the long-term profits of businesses that operate in this country? (40 marks)

The UK had recently emerged from the recession 2007-2009, the economy is now recovering. During the recession, many businesses had struggled to survive. The strategies that businesses had taken during recession may affect their long-term profits. For example, as people spend less during the recession, businesses try to reduce their costs and reduce prices in order to encourage customers to buy their product e.g. Primark, M&S etc and many businesses have also closed down branches in order to maintain their …show more content…

This has helped Waitrose to understand the customer’s behavior and they have showed their ability to respond quickly to the changing demand. This will help the business in the long-term. Waitrose had the ability to adapt to economic market conditions.

In conclusion, I think that many businesses are affected by the recent recession and the strategies that they have chosen have inevitably damaged their long-term profits. A good example is GM who have done badly in the recession, had to borrow money from the government, they were slow in responding to the changing demand and so customers were not happy with the product, staffs were made redundant, working hours were reduced and the communication within the company was badly coordinated which results in less staff motivation. Taking these things into consideration, GM will struggle to make profit in the long-term. On the other hand, businesses such as Starbucks, Waitrose etc have responded to the economic downturn very effectively. Waitrose for example had a great strategy to keep customers purchasing their products while maintaining the quality. The supermarket said its 'everyday to gourmet' approach had proved a success with customers as its own label essential range appealed to those wanting to save money in the face of the recession, while products like 'indulgent desserts' also performed strongly. Starbucks had introduced new lower price coffees to win back customers temped away by cheaper