Impact of External Factors on Industry Growth, Risk and Profitability
Macroeconomic trends have an impact on the industry. The economic factors affecting an industry's growth risk and profitability include:
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GDP
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Interest rates
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Credit availability
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Inflation
Governmental Influences: The government can impact any industry with its regulation and taxes. It can introduce norms and quotas that can affect the cost of manufacturing. It can also allow for subsidies or waivers that can help an industry immensely by lowering costs and increasing profits. Governments regulate controlling bodies and therefore the industry indirectly in many cases. In certain other instances the government behaves as a customer -- as it is in the case of the army or government staffs.
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