Employee and the customers.
Steady growth is vital as it controls the money being spent and earned; steady growth makes sure that it increases steadily through time. By having steady growth it means that aspects such as the recession can be avoided and consumers are still able to buy and sell at reasonable prices. The level of employment is vital as if there is a high level of unemployment then it would mean that the consumers would not be able to buy anything. If this happens then it would mean that the first objective of steady growth will not be possible because of the fact that the consumers will be spending nothing at all.
Unemployment is a consequence of recession, which is why these objectives combine to make sure that recession does not occur. Since the government is aiming for low unemployment and most consumers are working and receiving a good income this enables them to spend money allowing steady growth to happen. The last objective means that they would want the products that consumers buy to stay fairly low so that consumers can still spend there money. If the inflation were to be high then it would mean that consumers would not be able to buy products and this would stop steady growth.
If the economy meets these objectives then it would benefit businesses as it would mean that they can make plans for expansion as well as managing their costs and borrowing money more appropriately. The effect of steady growth is that businesses can afford to make the business better and improve their services because now they have more money to spend towards their organisation. By having a low inflation it would mean that the cost of borrowing will decrease this means that businesses can take out loans etc. without having a major debt problem.
This will help to prevent negative aspects such as recession as there will not be a loss of money in the economy. Inflation: Inflation is the steady increase of prices and the falling value of money all the time. There are two ways in which inflation occurs this is because of cost push and demand pull. Cost push is when the cost of producing products throughout the world goes up, in order for a business to still make a decent profit they will sell their products at a higher price so they still make a high profit margin.
The way in which cost push usually occurs is because the price increase of natural resources, labour and materials. The cost of natural resources constantly is increasing because the lack of it, this makes it rarer and this will increase the price that it is being sold at. Oil is also a vital resource as it not only helps to make the product it also helps to deliver it. If the price of this goes up it would mean that the business would be spending more and they will either have to find a cheaper supply of oil or to put their selling price higher so that they can make some sort of profit.
Demand pull is where all businesses are trying to sell their products at a maximum price as there is a huge demand for the product itself. Businesses take advantage of the demand for their product as if a lot of people want to buy it and they need it then they will increase their prices so that they will make more of a profit. Organisations that do this are called profit maximises; they are called this because they take advantage of the demand for their product and they raise their prices in order to maximise their profit. Jaguar: Inflation rates affect jaguar in many ways.
If there are low inflation rates It helps jaguar meet their aims and objectives in many ways however if the inflation rates are high it will stop them from meeting them. High inflation rates would mean that the customers would not be spending a lot of their money on leisure purposes as the as the prices that they are being sold at will go up, also they will not be buying products because of the fact that there will be no increase in the consumers wages. This means that if they spend there wages that they are currently earning with the high increase of prices it would mean that they are losing a lot of money.
The second negative impact that it would have on them is their employees will be de-motivated. This is because the prices of products will be rising and because jaguar has given them no pay rise it would mean that they will be unhappy as they will be struggling with their personal lives. Because they are de-motivated it would mean that they will not be concentrating on their work as much because they are unhappy, this would mean that the car quality will be going down and this would also lead to customer dissatisfaction as it would mean that they are getting lower quality cars.
The last disadvantage to high inflation rates is that all the resources Jaguar uses to make their cars and to deliver them would be more expensive, this means that in order for them to make a healthy profit they will have to raise the prices of their cars. By doing this it brings them many disadvantages as it could mean that they will lose customers because the new prices of their cars will be too high. This would mean that there sales will decrease and it would also mean that there share in the UK luxury car market will decrease because of this.
However if there was a low inflation rate it would also help Jaguar as it would mean that there is a healthy economy. If there are low inflation rates it would mean that people would be willing to spend there money because the prices of products are not high, this would mean that jaguars sales would potentially increase because more people are willing to buy there cars. This would help Jaguar meet there aims of increasing there share in the UK luxury car market and customer satisfaction.
The way in which it helps meet customer satisfaction is because they will be getting a luxury car for cheap, this then increases their share in the UK luxury car market because of the fact that more people would be buying the cars because of the cheap prices. Another benefit that low inflation rates brings is that it would help Jaguar keep their costs down, this is because the price of the materials would be fairly cheap, because of this Jaguar can then make a large profit because of the fact that they will be selling their cars for the same price but the cost of producing the cars would be low.
This helps Jaguar meet two of their aims, these are keeping their costs down to the 2004 level and to maximise their profits. The last benefit that it would bring them is that their employees would be happy, this is because their wages would not be small compared to what they would be if the inflation rates were high. They will also have a better quality of life because of the fact that the prices for products is low so they can spend how much they like.
Because of this the employees would be happy to work at the plant and they will be doing their work to the best ability that they can. This helps Jaguar meet three of their aims. The first aim that it would help meet is employee satisfaction, this is because they will be happy to work at Jaguar because there wages are good. The second aim that it helps them meet is customer satisfaction; this is achieved because the employees are happy meaning that the quality of the cars would increase.
The last aim that is met is the increase of their shares in the UK luxury car market, this is because their reputation would increase because more people have jaguars and the quality of the cars would be increasing meaning that their reputation would increase with it, this would increase their sales and the share in the UK luxury car market. Marriott: Similarly to Jaguar the inflation rates also have an impact on the Marriott and how they meet their aims and objectives.
Again if the inflation rates are high it would stop the Marriott from meeting their aims and objectives efficiently and if they are low it would help them meet their aims and objectives. The first drawback of high inflation rates is that they will lose the small amount of leisure customers they have. Although a very small minority of the Marriott’s customers are leisure customers it would still have a big impact on them.
for example the high inflation rates would mean that the Marriott would have to put their prices higher because of the fact that it costs them more to run it, this would mean that people would see the hotel as “expensive” and less people would go to the Marriott to use their leisure facilities as they would be seeking somewhere cheaper. This stops the Marriott from achieving their aim of customer satisfaction and also stops them from their aim of making profit.
As 80% of the Marriott’s customers are business customers it would not affect them greatly because it means that the business is paying for their stay at the hotel, however if this business were to realise that having these high inflation rates also affects them because of the fact that their costs would be going up dearly it would mean that they would stop spending at the hotel. If this happens it would affect the Marriott vastly because of the mass number of business customers that use the Marriott hotel. This would stop the Marriott meeting their aim of profitability because they would be losing their biggest source of income.
Furthermore the inflation rates will have the same affect on the employees at the Marriott as they did at Jaguar. Because of the high inflation rates the Marriott would keep the employees wages the same as it would costs them dearly if they were to increase them. Because the wages have stayed the same and the price of product has risen then it would mean that the employees would be expecting a pay rise but because the Marriott is not giving it they will feel de-motivated. Because of this they will be unhappy to work and they will be giving the customers with a poor customer service.
This stops the Marriott from achieving three of their aims. The first aim that it will stop is associate satisfaction; it will stop this because the employees will not be happy because of the fact that they are not getting the right pay. The second aim that will be affected is customer satisfaction, this will be stopped because of the fact that the quality of customer service has fallen because of the unhappy employees. The last aim that it would affect is profitability, this is because the more customers that are dissatisfied the less that would come to the hotel, and this would mean a lack of sales and a lack of income.
The Marriott are more reliant upon customer service as they come face to face with there customers however Jaguar do not, this means that the Marriott would be more affected if the employees are not satisfied where they are working. However low inflation rates also helps the Marriott. The first benefit that it brings to the Marriott is that more leisure customers would be coming to the hotel because of the fact that they can spend more money. The increase of leisure customers would mean more of an income for the Marriott and this would lead to having more profits made.
Another benefit that it brings to them is that the employees would now feel happy working at the Marriott because there wages would be fairly reasonable because the price of goods is not that high. By them being motivated to work it would mean that they would be happy and the customers would also be happy as they are receiving a good customer service. The last benefit that it brings to the Marriott is that they will make more profit, this is because the price of goods would be cheaper then they would be if inflation rates were high.
For example the Marriott would be paying less for toiletries in a time where there is low inflation than when there is high inflation. Because of this it would mean that the Marriott would be making more profit as there costs are being kept down. Conclusion: For both businesses having high inflation rates would affect the way in which they meet there aims and objectives. In terms of Jaguar having high interest rates would mean that the price of everything would go up whereas the wages would still stay the same, this would mean that the employees would be struggling with there personal lives as they are struggling to pay for goods.
This leads to employee dissatisfaction which would reflect in the quality of the cars as they would not be putting a lot of effort into making the cars. Because of this Jaguar would be struggling to meet all there aims as there employees will not be satisfied, there customers would not be satisfied, and this would also lead to the decrease of their share in the UK luxury car market. In terms of Marriott again the employees will be unhappy if there were high inflation levels as they would not be able to pay for day to day goods.
This would affect the level of customer service being given to the customers. This again stops the Marriott achieving their aims. It would stop them from achieving employee satisfaction, customer satisfaction and would also affect their profits. Overall I think that the Marriott are affected more by inflation rates because of the fact that the employees actually come into contact with the customers and if they are dissatisfied it would mean that they will potentially lose a large amount of there customers.
However Jaguar does not come into contact with there customers so the customers would not be as dissatisfied as they would at the Marriott, also employee dissatisfaction would not have that much of a large affect on Jaguar as most of the cars are built by machines, this means that the employees do not come into contact with the cars that much although at the Marriott it is all about the meeting between the employee and the customers.