Uk and China Economy Effect on Lg

P5

In this report I will be discussing South Korean electronics giant LG, I will be looking at and analysing the UK and Chinese economy its growth rate, inflation rate, interest rate, and unemployment rate and how they affect LG

UK China

GDP Growth Rate 0.50% 2.30%

Inflation Rate 5.20% 6.10%

Interest Rate 0.50% 6.56%

Unemployment Rate 8.10% 4.10%

In the data collected from www.tradingeconomics.com I can understand that the Chinese economy is performing far better than United Kingdom economy. From what I understand from both data the Chinese economy has a better Growth rate, more inflation rate which is good for the Chinese economy but can also have negative effects, better interest rate, and a low unemployment rate. This is why China is one of the leading economies in the world.

The UK growth is currently at 0.5% this is damaging for the UK economy as very little growth is taking place in the economy. If there is less growth in the UK economy there would be job losses meaning less demand and supply for LG electronic products, which are more expansive than other leading brands. This is affecting LG as it has recently just cut 315 jobs in it UK factory in Wales this will hamper LG plans of more growth in the UK as they are laying off workers. Jobless workers will then have to be put on a beneficiary system which means the government will be paying more for benefits to unemployed workers and slow growth. Another factor slowing LG growth is consumer confidence and their attitudes towards their products; many consumers don't take LG seriously as main competitors in the technological market to HTC, Apple, Blackberry, Samsung, Sony and Nokia this makes it hard

for them to set estimated sales of their electronics and growth of the organisation within the UK. Due the vast amount of smartphone competitors in the UK, LG cannot predict how much sales it will make during an annual period because their losing profit from rival giants. LG is affected by UK low GDP rate as they will evaluate UK GDP numbers, they then make a decision that if the UK GDP too low for growth this will leave LG with no choice but to reduce employment. In addition LG will evaluate business opportunities within the UK in order to develop their cash a deployment strategy helps LG Increase long-term earnings growth and Cash Flow. For instance, if the UK's economic growth is down then LG will set aside more cash in case