Running head: STRATEGIC PLANNING AND BUSINESS POLICY

Strategic Planning and Business Policy

Name

Institution
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Question 1

Changes in interest rates tend to affect different industries such as automobile, home

construction, and auto repair. Higher interest rates tend to have a negative effect on the

automobile industry since the cost of borrowing becomes high for most households (Malkiel,

2015). As a result, it becomes difficult for households to afford the expenses incurred in this

industry. Low-interest rates enable car dealers to stock more vehicles. Higher interest rates tend

to have a negative impact on the home construction industry since investors are forced to incur

more costs in the construction of houses. Likewise, they are forced to charge higher mortgage

rates due to the costs incurred. Higher interest rates result in an increase in the price of the

materials used in the auto repair industry (Malkiel, 2015). It, therefore, becomes more difficult

for people to access services such as automotive transmission and repair at an affordable cost. An

increase in interest rates affects the three industries negatively.

Question 2

Government regulation tends to impact various industries such as agriculture and banking

industries. This regulation tends to affect the agricultural industry in that it introduces legal

issues concerning products such as seed and fertilizer. Other regulations can be focused on

pesticide use. Government regulation tends to impact this industry in that farmers are forced to

seek alternative methods and products in cases where the current ones are banned by the

government. The alternatives used are normally expensive, a factor which affects the operation

of the people involved in the industry (Wheelen et al., 2017). The banking industry is also

affected by government regulation in that banks are forced to maintain a lower debt ratio. In

other cases, banks are required to comply with federal regulations which are aimed at improving
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the nature of lending practices. The effects of government regulation on the two industries

depend mainly on its nature. Such regulations can promote industries or cause significant losses.

Question 3

Political, Legal and economic force tend to affect the operations of a learning institution

due to various factors. These forces determine the institution’s ability to gain access to the

required resources (Wheelen et al., 2017). An institution like Santa Barbara City College is self-

financed. This is a political aspect which enables the leaders of the institution to determine its

operations and activities such as enrollment practices. The college manages itself, a legal force

which introduces challenges mainly due to lack of effective management practices (Wheelen et

al., 2017). The institution must, therefore, be keen concerning the type of leaders selected since

they must possess the ability to manage the college efficiently. The stable economy of the United

States of America has favored the operation of the institution for the past years since students are

capable of affording the required fee charges.

Question 4

One of the industries that I am familiar with is the automobile industry. Some of the

macro environmental influences which affect the performance of competitors in this industry

include technological changes (Wheelen et al., 2017). Companies involved in this industry must

be keen on such changes to ensure that they match the efforts of their competitors. The products

of this industry are reliant on technological advancements. Other influences which tend to affect

competitor within the industry include government regulations. Competitors must be keen on

these regulations to ensure that they avoid the aspect of operating at a loss.
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References

Malkiel, B. G. (2015). Term structure of interest rates: expectations and behavior patterns.

Princeton University Press.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management

and business policy (p. 55). Boston: pearson.