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Impact of operations of Our Closet
The macroeconomic indicators include rates of interest rates; ability to drive the market within frenzy, GDP, chances of lost of money or that has been made in an instant. The impacts of macroeconomics lead to the impact of the wide population of swaths, instead of a few selected individuals. There are several factors or macroeconomics such as unemployment rates, outputs of the economy, and the rise of inflation. The following indicators of the performance of the economy are closely checked by the consumers, government, and several other businesses. The five key macroeconomic indicators include the effects investments are as follows, production of industrial. Industrial production can not affect the investors. However, the growth of high industrial production is linked with the growth of GDP and this reflects higher income and which works in the favor of savings.
The second factor is the growth of the GDP; this factor states the value of the market of all services and goods that are produced in the country (Lambert 2021). The production of fashion of humanity makes 10% of the emissions of the carbon, the water sources are dried up and it pollutes the river streams and the river. There are two types of monetary policy: expansionary and contradictory. The policy of monetary determines the quantity of money that runs through the economy. The monetary of a nation has a very big impact on the economy (Tozzo and Caenazzo 2020). The business is indirectly impacted by the monetary policy, through the primary interest rates. The monetary policy determines the money that is circulating in the whole economy. The various goals of the monetary policy are stabilized prices, maximum employment, and long-term moderate interests’ rate.
However, these policies have been correctly implemented which led to stabilized prizes and wages. Due to this, there is an increase in the jobs and long-term growth of the economy. The monetary policy also includes a contraction policy of monetary, in this policy; there is an amount that is decreasing the amount of money that is circulating within the economy (Wei et al. 2021). This can be done by selling the bonds of the government, raising the rates of interest, and by increasing the requirements that are reserved for the banks. This method is used by the governments to avoid inflation (Galvão et al. 2019). The second monetary policy is expansionary this policy helps to increase the supply of the economy by decreasing the rates of interest, lowering the reserve requirements for the banks, and buying the securities of the government by the central banks.
The fiscal policy is the spending of the government and the economy’s influence on taxation. The fiscal policy is typically used by the government for the promotion of the growth of sustainability and to reduce poverty. There are some examples of fiscal policy such as an increase in the spending of the governments and tax cuts (Sriyana 2019). There are three types of fiscal policy those are contradictory, expansionary, and the policy of neutral. The fiscal neutral policy is also stated by a balanced budget; in this to pay the expenditure of the government brings high taxation (Aum et al. 2021). The second is expansionary fiscal policy, in this policy; the expenditure of the government is more than it takes through the taxes (Davidson 2020). The third one is contradictory fiscal policy; in this policy the government tries to collect more taxes than the expenditure.
From the above figure, this can be satiated that the GDP rate of the U.K. is 7.45% which suggests that the economic health of the country is positive. The price customer index of the U.K. is 115.8 in February of 2022. The rate of inflation is around 6.1% in the year 2022 and in the previous month, the inflation rate was 5.4% (Statista, 2021). Due to the above data, this can be stated that the rate of inflation in the U.K has a positive impact on the economy. Inflation gives a positive impact on the U.K economy because it reduces the amount of the debt in the terms of real.
There are many types of channels of distribution such as selling of products through the intermediaries, direct selling of the products, distribution in respect of dual and reverse channels of logistics. There is a huge level of competition in the fashion industry of the U.K because there are around 11,301 stores of retail clothing in 2019 and in the previous year there is a decrease of 382 stores of retail clothing (Sriyana 2019). The competitor of our closet fashion industry is Spencer and Mark, which is the biggest retailer of cloth with a share of 8.1%. In the year 2020, around 2.2 million people are there in stocks and shares and 43.5 % (957,000) of ISAs are held by women. Our closet uses many social media platforms such as Facebook, Twitter, and Instagram. However, with the help of many famous influencers, our closet advertises their products because today's generation mostly used digital platforms and our closet uses it for their promotion of clothes (Davidson 2020). The sharing economy of the U.K closely works with the makers of policy including the “government” this shows for better changes to protect the business of sharing economy and consumers.
Information acquired from PESTLE analysis provides sufficient information regarding external environmental conditions UK businesses face while operating. The UK is a highly diverse country and provides scope for businesses to flourish effectively by using the opportunities provided by this country. Therefore, Our Closet is the mentioned company in this study that uses the scope present within UK’s geographical boundary to flourish successfully. Modern technologies are developing within the UK as a result this country has achieved the fourth position in the technological industry among other countries in the world (Gupta et al. 2019). Hence, this is an online business and while operating within the UK the company is going to get a lot of technical support to run efficiently. The population within the UK is increasing rapidly and creating scope for this fashion company to enlarge its customer base
Our Closet is getting a chance to serve more customers and extract maximum profit from the operations. However, this business is going to face difficulty in maximizing the revenue level as the tax rate might increase in the near future. Payment of a higher tax rate is going to lower the operating income as operating expenses increase. Moreover, the inflation rate in the UK is increasing as a result the employment scope is going to decrease. The employment rate of the UK is not going to be improved as a result this company is going to face difficulty in securing skilled labourers. This fashion company is involved in the manufacturing process as a result the operation needs to comply with environmental acts to reduce pollution (Achinas et al. 2019). Furthermore, this business has to recycle old clothes and adopt sustainability procedures; this initiative is going to maintain corporate social responsibility. Observing the current condition that prevails within the UK it is easy to interpret that this company has high scope to flourish successfully within the fashion industry.
There are various social and economic factors that are associated with the development and up-gradation of the existing condition of the company. The organisation must focus on the customer demand present in the target market and design its clothes accordingly. The pandemic scenario has influenced the positive growth of the online mode of operation. Semyachkov (2019) has suggested that people prefer to do online shopping and receive the clothes by means of courier. ‘’Our Closet’’ makes use of Artificial intelligence to gauge the demand of the customers and modifies its products accordingly. The incorporation of cloud technology has further promoted the growth of the organisation. There are several strategies that the organisation uses to enhance its profitability margin. The concerned organisation delivers its products free of cost to the various parts of the world. Crowd sourcing and robotics play a key role in the determination of customer demand.
Posting the story of the brand and its various policies can earn the appreciation and interest of the customer. The concerned organisation must focus on giving discounts and offers to the customers, so as to acquire new customers and retain the old ones. The use of AI technology will help to gain insight into the customer’s demand and redesign its clothes and garments according to the market value. Targeting the various communities can help to resolve the issues associated with share economy branding (Basseliar et al. 2018). The concerned organisation can build a strong website and a good webpage so as to gain the attention of the different customers. The organisation need to set up short term goals so as to meet the long term target range of the concerned organisation and to gain impetus into the working market.
Political influence
The political environment of the county of the U.K influences the business model such as by preparing the environment of the market less or more friendly for the particular business. Hopkins and Schwanen (2018) have suggested that the political factors that are affecting the business such as control in the trade, law of employment, the level of corruption, the freedom of the press, and control in the trade. These political
The presence of the “Employment Rights Act 1996” in the UK is mostly helpful to protect the health and safety of the workers in the workplace of the UK. In this context, it can be stated that Our Closet can be able to protect employment rights severely with the help of this law. “Employment Relations Act 1999” is effective enough to incorporate the faith of the employees in the workplace environment. In referring to this aspect, it can be evaluated that with the help of this law, the organization is able to influence UK’s people to add the voluntary works (Murkens, 2018). Both of the laws are very beneficial for this firm to run the business smoothly on the long-term aspect. The intervention of the high legislature of the UK in the fashion industry is stated as the political factor that has a positive impact on the respective fashion company of the UK. the political factor includes political stability as well as instability, government policy, tax policy, foreign trade policy, trade restriction, environmental law as well as labour law. Therefore, the above-mentioned political factors make a positive as well as a negative effect on the business operation of our closet.
Legal impact
Anti-trust law plays a key role in the determination of market competition of an organisation with regard to the fashion organisation. This law helped the organisation to compete with the rival organisations and gain an advantage over the firms. It also helped to focus on the monopolistic policies associated with the organisation associated in the fashion industry. The rules associated with this help in developing the liberalisation policies of the organisation. The chosen organisation ‘’Our Closet’’ works in online mode mainly as a result its market share is accelerating, with the modern trends people have a higher tendency of buying products online rather than offline. The given organisation focuses on the anti-trust laws to deal with the price-fixing policies associated with the organisation. This law further stresses on the regulatory norms that influence the monopolistic business strategies and help to overcome the market attempts associated with congressional interests, business correspondence and digital communications.
The concerned organisation hires a number of creative designers from the global platform on the basis of their work experience and knowledge. It also makes payments to the employees based on their standard remuneration scale. Strict laws are implemented so that the designs get properly patented and no one is able to copy them in the future. Elhauge (2020) has stated that the ‘’Copyrights Designs and Patent Act’’ of the UK helps to preserve the laws associated with the intellectual property of the nation. This helps in preserving the original stock of the organisation and negates the concept of copyright or piracy. The organisation also delivers its items on time and that too free of shipment charge. Consequently, the concerned organisation has gained popularity among the masses. However, the rising trends in the fashion industry pose threat for the existing organisation. The governmental policies are however stable which helps the organisation to positively flourish in the fashion sector.
Curiosity
The lecture modules were indeed very interesting and I gained sufficient insight into the subject after studying the modules thoroughly. The modules were indeed very informative and I faced quite a lot of difficulty comprehending them. The major issue that I faced was with the socio-economic chapters, which dealt with the various determinants associated with the socio-economic condition of the country. I could not understand properly what factors determined the socio-economic status of the people and how it varied from one place to the other based on geographical distribution. I also faced issues while calculating the purchasing power parity and how it varied on the basis of nations. Finally, I gained knowledge from the economic lecture notes and did a thorough study of the various economic factors that influenced a nation. I did some self-research on the internet and got the answers to the doubtful questions and queries regarding the economic and social status of a nation.
In order to understand the concept of GDP rate and inflation rate, one must have a proper idea of the macroeconomic and microeconomic aspects of society. However, the concept of real GDP rate and nominal GDP rate is very confusing. I learnt the various factors to be focused on and the ones to be excluded, so as to calculate the final price of a product. The concepts of NDP and GDP are also very confusing, initially, I could not understand the difference between the nominal price range and the basic price range and how the base year for the consumer price index was determined. The social status showed that there were three classes of people in the society based on their financial condition which included the upper class, middle class and the lower class. The per capita income of the people was very less compared to their purchasing power parity which focussed on the fact that unequal distribution of the national wealth was being practised.
Description
All the topics being covered in the lecture modules are very important and they enriched me with knowledge regarding the economical aspect of an organisation. All this knowledge is very important for a person to gain an in-depth understanding of the economic and social health of a nation and a company. However, the second module was very interesting according to me because it dealt with the concept of stakeholders. Initially, I did not have any idea about who stakeholders are but after learning the lecture module, I understood the topic. Stakeholders are important to every organisation and industry. In the future, I wish to open my own organisation that will deal with garments. In order to fulfil my dreams, I need to have the right idea about stakeholders and their roles. The module further taught me about the importance of capital investment and skilled labourers for the success of the organisation.
I learnt about the various associated stakeholders of the organisation such as the government, investors, customers, suppliers and employees. Stakeholders are very important from the organisational perspective they influence the capital distribution rate of an organisation. Understanding the GDP rate is not only important for professional life but also for personal life. It helped me to gain knowledge about the financial condition of the nation and the world. The module also covered information about the various pillars associated with knowledge of the economy. I understood the way the family background slabs were created on the basis of financial strata. This topic was also very interesting and I found sufficient information relating to this topic on the internet, browsing further about the concept of stakeholders helped me to comprehend and analyse the various problems associated with it. I personally want to become the owner of a fashion company in the future, so these topics helped me to gain ideas about the economic condition of the organisation.
Self-realisation
I never had any idea about sharing economy; it is only with the help of the lecture modules that I gained sufficient knowledge about the concept of sharing economy and its various attributes. Sharing economy is a modern concept that focuses on the sharing, provision and acquisition of services and goods based on the community and various online platforms. Big data also has a key role in the determination of the sharing economy associated with a country. This topic is unique compared to the other lecture modules. The lecturer taught me the concept of sharing economy in a very innovative way by focusing on the various factors associated with technological, economic and political drivers in the society. It is also important to be aware about the various attributes that are concerned with the concept of sharing economy. The sharing economy gave cruise to the fashion platforms, lending platforms, coworking platforms and freelancing platforms which has definitely had a positive impact on the financial status of the nation.
I loved all the topics related to the sharing economy however, the one that fascinated me the most is the story of Uber. It is a common app based on car rents that almost everyone uses in modern times. The story behind it was presented in a very unique way that gained my focus and attention. I also found the topic related to exchange and value chain of sharing economy very interesting as it reflected in the various attributes associated with people, production., distribution, resources, earth and power. The various graphs provided in the lecture modules shared the knowledge associated with outsourcing, artificial intelligence, manufacturing, biotechnology, big data and supply technology. I can sum up by saying that the topic related to sharing economy impressed m,e the most as I ha\d no previous understanding of it.
Extension
The lecture modules are very interesting and they helped me to gain sufficient knowledge regarding the economic and social status of a nation. However, I want to gain more knowledge about the various types of taxation slabs and the way in which they are calculated. I want to gain knowledge regarding the concept of tax havens, tax avoidance and tax evasion. As I have already mentioned that I wish to become a successful business person someday so I need to have an idea about the various tax slabs and the way they are calculated. I also wish to have an idea about the calculation of the various dividend rates associated with the employees and the partners. Tax concession policies are helpful both in the personal and professional life of a person.
I also want to gain knowledge about the way the exchange currency rate is calculated, it will help me to comprehend the concept of monetary conversion from one nation to the other based on exchange weight age. Calculation of the balance of payments is also important, I want to learn about the formula and the various indicators associated with the economic wellness of a nation. An extension of the various nominal and real GDP rates can help me to gain more knowledge about the channelization and distribution of the capital between the employees and the stakeholders. The modules, however, enriched me with the concept of the different profit margin calculations and the sharing economy attributes.
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