Question
Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions. Compare market conditions with the
Evaluateeconomic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.
Comparemarket conditions with the company's performance for 2019. Conclude how the market conditions that year influenced the company's performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected.
Both microeconomic and macroeconomic factors highly impact economic conditions in a country. Some of these factors include inflation, monetary and fiscal policy, government interventions, and unemployment levels. World Wrestling Entertainment (WWE)
is also impacted by some of the economic conditions among which political, environmental,
currency, global economics, and government interventions are included (Reinhard & Olson,
2019).Some of the political factors affecting WWE include corruption levels, political stability, and the entertainment anti-trust laws. Political factors highly influenced the performance of the company through security and the favorable conditions for conducting businesses. High corruption levels affect the operation of a company in that embezzlement of funds limits the company's growth and reduces the number of employees. Political stability in the individual nation has impacted the company's operation where there is guaranteed security that creates favorable space for investors. The entertainment anti-trust laws in the USA have played a significant part in competition regulation in the entertainment industry in the country. Besides, the country has a favorable environment that is peaceful and has tight security, which is a significant factor in the company's thriving. The politically stable environment attracts both local and foreign investors to invest in the company. In addition, the US currency has a high value, which translates to high exchanges rates with other currencies, making the company receive more profit from foreign entertainers.
Moreover, some of the global economic factors that affect the operation of WWE
includes a wide range of consumer spending, economic growth rates, country's interest rates, knowledge, and competency level of the workforce in the entertainment industry,as well as the effectiveness of the financial market. These factors play a critical role during the operation of the business, especially in the provision of standards, economic growth, and the achievements to cater to the current consumer requirements. Global economics also limits the number of personnel needed through the skill level to be achieved. Further, government interventions have also played a part in the operation of the WWE company. Some of the government factors impacting the company's operation include mass-directed closures and prohibited social gatherings. These factors have greatly affected the market conditions in which several companies' closures will result in low supply in the market with high demand for entertainment, which calls for the company to take a further step to cater to the market demand.
2019 Market Conditions[dp1][dp2]
In 2019, WWE attained the highest revenue score with $906.4 million and a capital return to the shareholder with a $120.8 million record in 2019 (Marketbeat, 2020). In the second quarter of 2020, the organization reported a record revenue of $514.4 million, record growth of 14% from the previous year. In addition, the operating income was $55.7 million compared to $55.7 million in the same quarter the previous year, 2019. However, live events decline from 2018 to 2019 was worrisome for shareholders. The efforts to pick up live event sales were fruitless as WWE continued to report declines through Q4 2019, where live event revenuedecreased 20%to $27.4 million compared to $34.4 million during the same quarter in 2018 (Konuwa, 2020). [dp1]
[dp2]Thoroughly compared 2019 market conditions with the company's performance and definitively concluded how the market conditions influenced the company's performance.
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