FACULTY OF BUSINESS ENVIRONMENT AND SOCIETY 2012 M03EFA: Economic Environment of Business(2012)Course Leader: Dr. Keith Gray7th December 2012Examine and critically appraise how an economist would evaluate the economic impact of a major investment project such as ' The London 2012 Olympic Park'.Azeemudeen Fazal Mohamed (4602688) |
MBA General Management |
Contents Abstract 3 Economic Impact of the London 2012 Olympic Park 4 Assessment of economic environment 7 The political factors 7 The economic factors 8 The social factors 9 The technological factors 9 Conclusion 10 References 11
The ever bifurcating market place and consumer preferences are increasing complexities for the economists to evaluate and understand the decision making rationale of producers and end consumers. Additionally the factors of production and institutionalization are contributing to ceaseless challenges for generating market equilibrium where perfect competition can be exemplified (Weatherly, 2003). One of the basic factors for this shift is demand and supple equilibrium is characterized by the increasing demands of seasonal items. London Olympics 2012 is an example of a similar event that has motivated the economist to reconsider the rational decision making patterns of businesses and individual consumers.
The major investment project usually involves the creation, acquisition, development or maintenance of an asset with a lifespan beyond the current financial year. The London 2012 Olympic park is the biggest project done on billions GBPs. evaluation of Project was done by analyzing the costs and benefits of a proposed project with the goal of assuring a rational allocation of limited funds among alternative investment opportunities in view of achieving certain specified goals. Proper identification of project costs and benefits is an important step. An improper identification of costs and benefits would lead to under - estimation of costs or over-estimation of benefits or vice versa. Indeed it must have gone with various consultants on the basis of financial aspects and economical aspects. Here are some examines and appraisals of an economist on the economic impact on major investment project -'The London 2012 Olympic park'.
II. Economic impact On Social environment:
The economic impact is the effect of macro economics on the commerce that involves the trading and transportation of goods and services for large amount of cash or exchange on goods; the employment that involves the income, changes in standard of living, changes in the diversity of living; money flows on all variants. The impact of London Olympic park had dragged the motivation of public and personal future to the various extinct. Here are some of the factors of economic impact London Olympic park.
London 2012 Olympic Park is a classic representation of economic environmental shift. It was the time when the natives were following the event and the local vendors has an immense opportunity to target not just the nativesbut also the foreigners. The economy of London is well saturated withvarious competitive and well known local and international brands. But yet the London 2012 Olympic presented them a new opportunity that incorporated mass production for a homogenous target. Mass production was the nominated strategy because the target was following the similar trends as exhibited in the event of London 2012 Olympic. Additionally the target market is rendered as homogenous because of the fads being followed in the event(Hofreiter&Huemer, 2006).
The disturbance in the internal factors of businesses associated with the London 2012 Olympic is characterized by the firms operations and the returns. If a firm accruing losses its due to the short run, operations can be continued rather than shut down decision, depending on the capability and type of loss(Dyck andOvaska, 2011. In the Average