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There are four direct general economic indices that are used to forecast the sales of the PEPT (Portable Electric Power Tools) industry in which Able Corporation operates. These are:

housing starts;
expenditures for residential construction;
expenditures for commercial construction; and
expenditures for home repairs and improvement.

(Underlying these indices are more fundamental factors such interest rates, inflation rates, and foreign exchange rates.) The direct general economic factors can be counter-cyclical to each other, as when residential construction expenditures are down due to high interest rates, while home repairs and improvement expenditures are up as homeowners opt to improve their current dwellings rather than build new ones. The short and long-term forecasts for these indices can often vary significantly amongst the various forecast services

In Phase 1, the emphasis was primarily, though not exclusively, introspective. At this juncture, it is necessary to understand the external environment under which Able operates and the nature of its competition. In order to properly identify Able's potential, frame its mission statement, execute its value proposition, and set achievable strategic objectives, it is necessary to perform a rigorous analysis of available information resources. These include annual reports of the competitors, channel/distributor studies, predictions of economic forecast services, and industry reports.

Research the key general economic indices affecting the power tool market (#1 through #4 above at minimum) and list any available projections. If significant differences exist between the various forecast services, highlight them.

Obtain and list the historical actuals for the past 5 years by year for the four economic indicators above (#1 - #4).
How does this information affect the power tool market?

Considering that forecasting services and other information agencies often differ in their prediction of the future state of the power tools industry and vital economic factors, how would you go about putting a forecast together given these disparities?

Objective: Conduct various environmental analyses as they relate to an organization.

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The response addresses the queries posted in 2316 words with references.

//Able Corporation in order to achieve its market share and forecast its sales growth has to analyze the economic and external environment in which it operates. Survival of the company depends on successfully evaluating the current and future trends in the external factors by analyzing the historical figures. This paper will evaluate all; but before that, the paper should start like this: //

Able Corporation has gained different insights into its internal environment and operations through internal strategic analysis. The mission statement, its value propositions and strategic objectives are very well -defined by the company, so that it can operate effectively. But it needs to understand that fulfillment of all these factors and company's growth and success not only depends on understanding and analyzing the internal environment, but largely depends on the external environment in which it operates. Able Corporation, to achieve higher market share and to survive against such intense competition that it is being forced into today's era, has to give an intense and thorough look on the economic and external environment.

The threats and opportunities that are around the company can only be understood by giving a fine look to its external environment. External environment of the company includes its suppliers and channel members, its competitors, customers, economic indicators, government and different factors that affect the operations and growth of the company. Able Corporation in order to understand and feel the external environment that is surrounding the Portable Electric Power Tools industry has to understand different economic indices.

//Above we have discussed about the economic indices and their importance while evaluating the external environment. Moving forward, we will now, highlight some of the economic indices and economic factors that are crucial to analyze.//

Economic indices like housing starts, expenditure made by the people for housing and residential constructions, expenditure spread by the commercials on the commercial constructions and expenditure made by the people on their house repairs and improvement should be studied, so that the company gains an insight on its customers. Even inflation, lowering and heightening interest rates and fluctuations in the foreign exchange rates should be studied thoroughly to understand the external climate. All the above factors affect the sales of power tools and so it is vital for the company to analyze the data related to them, so that it can achieve its market share and growth.

Able Corporation operates in an environment in which it serves both the household and commercial consumers and thus, it needs to identify the different situations and positions that exists at different periods to understand their affects on the sales of the company. Moreover, the firm should analyze why its market share and sales dipped down or to find out the reasons why the sales of the power tools are not going up. Able Corporation has to continuously monitor the markets, so that it can access serving and giving more focus to which market is beneficial at what time.

//Different economic indices that are discussed above are relevant for the portable electric power tools industry. Here, we will give discuss how they are related with the power tools industry and thus, need of their analysis for Able Corporation.//

Able Corporation has to generate different data on the above discussed economic indices in order to build a sound decision. PEPT industry output get affected by above discussed economic indices as the sales of power tools and different equipments of the PEST companies depends on the consumption levels of economic indices. Power tools are mainly used in the houses, thus, it is essential to know that the constructions of new houses and commercial buildings and apartments are going on or not. The analysis and research of the economic indices like amount of new housing starts, construction of household units by the individuals and even value and amount of commercial ...

Solution Summary

The response addresses the queries posted in 2316 words with references.