Question

The company Macy's has struggled due to global trade pressure, large debt, and online competition. How does each of these factors affect the business?

Answer 1

Dear Student,

Please find answer to your question, following factores affects the business by

A) Global trade pressure

1) Increasing wealth inequality & Price Descrimination

The pressure from global competitiors can lead to downsize the price of product and enter into local market with cheap prices that can not be achivable by company Mac'y

2) Exploitative nature of large multinational corporations

Foreign companies exploit the local markets by the way of huge investment and monopoly in market and therby small business firms like Mac'y suffer a lot due to lucrative offers given by competitors

B) Large debt

Large debt is a risky proposition, and businesses that don’t have the right combination of financial strength and good planning can quickly run into big problems as a result of their debt

Loans aren’t free. When your business borrows money from a bank, it doesn’t just need to pay back the loan principal – its debt service needs to pay for the principal and the loan’s interest.

So in Mac'y case due to low profit , company unable to pay taken debt and lead to loss

C) online competition

Competitors will try to win market share by cutting costs, improving efficiency, lowering price and innovating by either creating new products and services or improving upon old ones by using online aids of Marketing such as twitter, facebook, Amazon / Flipkart shopping. In other words,online competition tends to give consumers better goods and services at lower prices

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