List the current characteristics of each environmental factor as they relate to REI.
U.S. Economy
How does the current U.S. economy affect REI retail operations?
1. Consumer incomes- As consumer incomes change the ability to sell non-essential goods is directly affected. REI sells non-essential goods. If consumer incomes are rising they will have discretionary income and REI should benefit. If Consumer incomes are flat or decreasing REI will see a negative impact on sales.
2. Inflation- Inflation is a measure of the decrease in the value of money. This means that if inflation is increasing it will take more money to purchase the same product. Again with REI they sell non-essential products and would be negatively affected by inflation. Inflation has not been a problem but it is predicted to be in the future so REI must factor this into their sales and marketing strategy.
Global Economy
How does the current global economy affect REI retail operations?
1. Since REI is not a global company they are less affected by the global economy. They are not immune however as the global downturn affects the U.S. economy as a whole. This in turn does have a secondary effect on REI.
2. Since the global economy directly affects the U.S. economy any downturn in the global economy is going to have a negative impact on the U.S. economy therefore having a secondary effect on REI. This would have the same effect as mentioned in the U.S. economy in part one.
Legal and Regulatory Environment
What types of legal and regulatory forces affect REI in the U.S.?
1. Federal, state and local regulations and agency’s affect REI as well as every other business. The Federal Trade Commission regulates competition to avoid unfair practices. The Consumer Protection Agency helps protect the health and safety of consumers. Since REI has many private label products they must make sure that they are safe to avoid