Eco 550 Essay

1017 words - 5 pages

Strayer University

ECO550

Written Assignment 4

Economic conditions like the weather have the capability to change every minute and are difficult to predict. Large corporations depend on various economic factors in world markets and decisions based on current economic information and trends. They also rely on the amount of sales revenues, profits, cost, labor and benefits to forecast future moves for the company. A company with traits that are monopolistic can dictate prices and supply based on the power they have over their products and services.

An example of a company that has a large share of control over the building supply and home ...view middle of the document...

Lowes reported third quarter profits this year at 11.9 billion dollars although shares for the company have decreased 6.3% this year and they still trail Home Depot in total sales given the volatile macroeconomics market it is positive to see an increase in profits. Lowes has actually closed 27 stores this year and cut around 1,700 management jobs along with cutting the number of its regional offices (Burritt, 2011). The positive gains it is seeing in profit are most likely due to the strategic cuts the company has made which unfortunately hurt jobs and the economy as a whole but are smart business decisions to help the company profit. Profits for Home Depot also were on the rise and came in at $17.33 billion or about $6.5 billion more than Lowes (Reuters, 2011). The success is mainly attributed to Home Depot’s efforts this year for restructuring distribution facilities, focus on customer service, in-store technology advances, better merchandising and slowing store growth.

Companies like Home Depot and Lowes’s see an increase in customers comparative to the Christmas Holiday that other retail stores see just before spring. The companies typically add seasonal employees to help with the increase in customers and sales that they see during the spring months. In news release from February of this year Home Depot announces that it would hire around 60,000 seasonal and full time employees and as of the date of the news release has over 300,000 employees (PRNewswire, 2011). Lowes has over 230,000 employees for both full and part-time and this reflects its position in every aspect as 2nd to Home Depot. The financial crisis that has plagued the United States has hit both home improvement stores hard and made them face tough business decisions based on market and housing data. Given new construction for homes have stalled in many areas this has directly been linked to store closures in certain regions.

The consumer price index has increased 3.5% over the last year for all urban consumers which directly affect the sales of goods (BLS.gov, 2011). The unemployment rate has just recently dipped below 9.0% for...

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