Environmental Analysis: Army Air Force Exchange Service Week 3
...Analysis
Introduction
The Army Air Force Exchange Service (AAFES) has served military service members since 1895. Today AAFES’s customers demand more as competition from category killers and discounters lure them to their establishments. With 80% of customers having some college, a college degree, or beyond, AAFES customers are highly educated, (AAFES, 2008). They research products, and compare prices before entering an AAFES brick and mortar retail facility. Customer’s perception of value varies from best price, to best customer service, to best for the environment. A weak US economy is cutting into customer’s disposable income. AAFES must achieve long-term objectives to remain competitive in the upcoming years.
Economic: “Because consumption patterns are affected by the relative affluence of various market segments, each firm must consider economic trends in the segments that affect its industry,” (Pearce & Robinson, 2004, p. 79). Economic trends such as inflation cut into customer’s disposable income. The housing crisis, poor debt management, and an overall weak American economy are reasons for the declining value of the US Dollar. As represented in Figure 1, “overall inflation was projected to decline from its current elevated rate over the coming year, largely reflecting the assumption that energy and food prices would flatten out through 2010,” (Federal Reserve, 2008).
Figure 1
Core PCE Inflation Percent
2003 2004 2005 2006 2007 2008 2009 2010
Actual 1.4 2.2 2.2 2.3 2.1 - - -
Upper End of Range - - - - - 2.3 2.2 2.0
Upper End of Central Tendency - - - - - 2.2 2.0 1.9
Lower End of Central Tendency - - - - - 2.0 1.7 1.7
Lower End of Range - - - - - 1.9 1.7 1.4
The US economy has affected businesses and governments globally. “Countries that outsourced their monetary policy by pegging domestic currencies to the dollar are...
View Full Essay
