Impacts on Thorpe Park
In an economic depression unemployment rates and decrease in the flow of money into the economy. Thorpe Park will find it exceedingly difficult to earn profits. As a result they reduce their staffs that lead to unemployment. But they only hire seasonal staff who only work 9 months of the year so employees will become unemployed at the end of the 9 months every year.
Unemployment is a major influence on Thorpe Park as it will affect its products for example if they are short on staff one person cannot check all the seatbelts are locked on the rides than activate it as it will take double the time to get the ride going and make the customers waiting time longer which will make them fail their objects of giving customers a ‘’thrilling experience’’, resulting in a bad performance and customers never coming back.
Impacts on Thorpe Park Essay Example
Due to people who have lost their jobs, money is now being spent much more carefully. This means that the average person is spending their money on only the necessities such as food, fuel and bills. ore extravagant purchases such as clothes cars and days out to the local theme park are not high on most people priority’s therefore I would expect to see the amount of visitors to Thorpe park decreasing for most of the time throughout the year. however, due to the unemployment rates many people instead of taking family trips abroad, now prefer to stay at home to save money and spend their holidays in Britain, meaning British resorts, parks, museums and even Thorpe Park see a much higher visitor level in the past 2 years than they have for a very long time especially in the summer months and other holidays.
So I would expect to see a decrease in visitors overall in comparison to previous years but during the summer months visitor numbers have greatly increased. Therefore profits will have decreased and staff at Thorpe Park will be made redundant. I think this will be a long influence as we are currently in a recession which means unemployment rates are high meaning in will take time to go back out if it. It will also affect Thorpe Park’s aim of ‘’Increase Intention to Visit on national level from 36% to 38%’’ as some people won’t be able to afford it.
So an advantage of the impact it has on Thorpe Park is people can’t afford to go abroad so they will just go to a theme park instead because it is cheaper. Cost Thorpe Park will have to pay out a little out of their money as because of the unemployment rates of their customers which means that they may not have the extra cash to spend. Thorpe Park already breakeven at ? 16 per tickets and they already charge ? 39. 60 per ticket, which means even if they make the ticket each about ? 20 for the holidays as a special offer then they will still be making ? profit on each ticket sold.
Reliability I think this will be a reliable strategy for Thorpe Park as it will help them gain more customers even if Feasibility Effectiveness Interest Rates: An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For Thorpe Park this would mean that lots of aspects of the business will be affected as explained below. Interest Rates Directly Affect Borrowing The most straightforward impact of interest rates on businesses is how rates influence business borrowing.
Thorpe Park may need to take out short term loans to make up for shortfalls in payroll or other expenses, so higher interest rates make such shortfalls more costly, since Thorpe Park will have to pay more interest back to lenders. Thorpe Park may also frequently take out longer term debt for improvements and infrastructure. The higher the prevailing interest rates, the most costly taking on debt and therefore the less likely businesses will be able to commit the funds to such projects e. g. Thorpe Park Making new rides and attractions etc.
How Interest Rates Impact Business Strategy Another important impact interest rates have on Thorpe Park is in business strategy. At the most basic level, the goal of all businesses is to make profit. Therefore, venture a business makes must be thoroughly analysed for its ultimate prospects at bringing in profit, and how those prospects compare to other possible sources of revenue. Since saving capital at current interest rates is a possible source of revenue, higher interest rates tend to make new ventures less attractive.
For instance, if a cost benefit analysis shows that a new program within a company is likely to yield a profit of 4% per year for all money put into the program, but the prevailing interest rates are 6%, the company is better off putting their money in the bank. In this way, interest rates dictate what a business will consider a strong return on investment. Thorpe Park will not have any time to save money as every 4 years they make a new ride which may be more profitable than putting money into savings account. Interest Rates and Investment
A third impact of interest rates on Thorpe Park is its ability to raise capital through stock the value of stock prices. When a company goes public, it sells shares of the company in the form of stock to raise capital. Subsequently, the implied value of the business is tied to the share price of the stock, and share price is tied to demand for the company’s stock. When interest rates are higher, the demand for investment tends to be lower, so higher interest rates are generally detrimental for Thorpe Park stocks, and their ability to raise money through a stock offering.
The reason higher interest rates are bad for stocks is that higher interest rates make traditional saving more attractive; if someone can earn a 5% guaranteed return by saving at a bank, they will be less likely to risk money investing, than if they could only earn 1 or 2% in a savings account. If Thorpe Park needs more capital they can sell shares and it’s also another source of finance for Thorpe Park. Product Pricing The more Thorpe Park must pay monthly to service loans and/or a line of credit, the more it has to charge for its product or experience in an effort to make the payments.
This becomes a major stumbling block because consumers may not be willing, or able, to pay the higher price. So the profits Thorpe Park will suffer if it is unable to charge what it needs to offset the cost of higher interest rates. Cost of Goods Sold Thorpe Park has a supplier of some sort and that supplier is also affected by higher interest rates. The supplier will often raise his price to adjust for the higher interest rates. So in addition to paying higher interest rates, Thorpe Park must also pay a higher price for supplies.
This means that tickets may go up to cover the costs of the supplier, which then will make the customers think twice about going to Thorpe Park and therefore result in a decrease of sales to Thorpe Park. Employees Once Thorpe Park reaches a point at which it cannot charge its customers what it needs to maintain operating expenses and make a reasonable profit, it must cut costs. Cost cutting often starts with simple solutions such as looking for cheaper suppliers. But as the need continues it can lead eventually to laying off employees. The Downward Spiral Higher interest rates will ignite a downward spiral in economic activity.
As businesses lay off workers and the unemployment rate rises, consumers have less and less to spend on goods. As a result, businesses have to dismiss even more workers. This cycle continues until interest rates are reduced. Judgement then: positive/negatives and actions Cost Reliability Feasibility Effectiveness Legal Employment Laws: These laws are major to Thorpe Park as they are a very big business and employ quite a lot of people. The employment law make the employees happy and motivates them because of their rights for example the time regulation act gives people breaks which can help prevent accidents.
Employment law is aimed at protecting the health, safety and rights of employees, the main employment laws that a business needs to consider are: Equal Pay Act 1970 Employees who do equal work or work of equal value must receive the same pay as workers of the other sex. If a man and woman are on a different pay although doing basically the same job it is for the employer to show that there is a genuine reason for any difference in pay, which is not based on the sex of an individual.
Thorpe Park employs many different people, from old to young, men, women, and people from Britain or different countries, there is a huge variety and each and every person needs to be paid equally This shouldn’t be a problem for Thorpe Park as they employ many different people of all sexes that do the same work. Men and women are now thought to be treated equally in society and all businesses including Thorpe Park have to obey and understand this rule, if Thorpe Park needs to ensure they pay their staff with the correct amount of money depending on the type of work the employee is doing.
Employees are also entitled to know how their pay is made up. For example, if there is a bonus system, everyone should know how to earn bonuses and how they are calculated. Sex Discrimination Act, 1975 Employees cannot be sexually discriminated in employment, training or recruitment Technological Environmental The environmental law can have an impact on Thorpe park because it is big park and is visited by hundreds visitors every day. The park needs to make sure that they can keep the park clean and that all the rubbish that is produced is recycled well.
As Thorpe Park has many concession businesses, people eat and drink a lot, so the park needs to make sure that there is staff around in the park that can clean it up. Further the Park has to take its noise level also into consideration, because there may be people living in that area as well. The park needs to make sure that they are not troubling anyone with its noise levels. They need to make sure that they are environmentally friendly to get a good status, because environment is serious issue these days.