Pros And Disadvantages Of The Boom Stage For Eddie Stobart

An economic ‘boom’ can help a company like Eddie Stobart. A ‘boom’ is the period that follows recovery phase in the ‘boom-bust cycle’. For example, if a product was £3 before the boom it would seem cheaper in the boom stage because people seem to have more money to spend. However, this is not actually the case as it only seems this way because products are cheaper than they once were and therefor they can get more for their money. This would be good for a company like Eddie Stobart as it means they can increase their profits due to more people using their service. This is also a benefit for Eddie Stobart as it would be cheaper for them to buy products for their company because all of the prices are cheaper in the boom stage. It may also make it cheaper for Eddie Stobart to expand their business further as their vehicles and the price of properties to buy and rent would be cheaper. This would be good for them as they can enhance their business further and therefore increase their products because of this. A disadvantage of the boom stage for Eddie Stobart is that they would have to decrease their prices to follow suit with their competitors. They would have to do this because in the boom stage because of the fact people have more money. However, Eddie Stobart will also have to be prepared for when the boom ends. They will then need to work out how much they predict that they are going to earn in the future. This can either give the business confidence as they could be doing better than they thought they were, or it could encourage them to take action in order to improve the position of their business in the economy. This could include lowering the prices or advertising more to get more customers in their shops and to encourage sale...

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...ct the income of their customers; however, when the supply is higher the customer may be earning more.

Supply would have an effect on the price of Eddie Stobart’s rivals. This is because when the supply is higher, the companies may be able to lower their prices or may be forced to lower their prices due to the high amount of stock that they hold. This is because the company may not want to hold any buffer stock. This would affect Eddie Stobart because they would need to follow suit with their rivals to make sure that they can maintain their customers and also possibly gain new customers because of their cheap or cheaper service.

Supply may also have an effect on advertising. This is because when the supply is high a company like Eddie Stobart may have lots of stock left over and may therefore need to advertise it in order to be able to sell it quickly.