4 Economic Environment Jennifer Gately American Military University BUSN310: Business Theory Dr.


Economic Environment

Jennifer Gately

American Military University

BUSN310: Business Theory

Dr. Gerald

November 20, 2022

Economic Environment

The economic environment has become an important aspect for businesses to focus on due to the expeditious integration of economic markets in the global arena. Business processes are affected by local and global happenings. The understanding economic environment helps companies to take advantage of the opportunities in the global market to grow their customer base, maximize returns, and increase productivity. Companies that do not acknowledge the impacts of environmental factors make low-profit margin and the chance for expansion remain slim. This paper compares and contrasts the economic environment of Citigroup Inc. in the USA and UK using Rostow and Galbraith’s theories.

Comparison and Contrast of Economic Environment Using Theories

Rostow’s theory asserts that all countries exist in a linear spectrum in any of the classic stages of economic growth and move upward based on the development process (Muda et al., 2020). These five stages are a traditional society which means a low-developed society, preconditions to take off, and take-off which is characterized by intensive growth, drive to maturity, and high mass consumption (Muda et al., 2020). The domestic economic environment of Citigroup Inc. in the USA. The US has a nominal income of $23,374.71B and an inflation rate of 9.1% as of 2022. The bank interest rate range from 3.75% to 4%. The estimated net worth of the USA is $111.04 trillion, and high productivity is due to the presence of many successful businesses (Choi et al., 2020). One global market where Citigroup operates in the United Kingdom (UK). The nominal income of the UK is $3,055.33B, with an inflation rate of 9.6%, a 2.25% interest rate, £12.8 trillion wealth, and low productivity (Choi et al., 2020).

Based on Rostow argument, the buying behaviors of consumers in the USA are high than in the UK evidenced by high productivity, income, wealth, and low inflation rate. The rate at which a country has high exposure to modernization is evidenced by the use of advanced tools and a high rate of investment. Based on GNP working, the UK is 20% less productive than the USA (Choi et al., 2020). There is a low-interest rate in the UK; Citigroup makes less return from investment: The interest rate in the local region is high, maximizing return. The high inflation rate hinders investment. Economic environment in the USA and UK compare because they support business processes and have high economic environment than other G7 countries.

Glabraith’s theory asserts that advertisement is the practical means of increasing customers’ purchasing power in businesses operating in highly affluent societies (Lohosha, 2021). In the regional market, Citigroup advertises on national television, print, and digital. Advertisement on TV helps Citigroup to meet the financial and investment needs of local consumers. In the UK, Citigroup advertises using global advertising campaigns; these campaigns include ads featuring people buying houses. Also, Citigroup uses creative works to advertise its product to locals in the USA. Citigroup uses digital and print methods of advertising in the USA and UK. Citigroup employs diversified advertisement strategies in the USA than in the UK. Diversified advertisements increases and attracts more customers for Citigroup in the USA than in the UK. The price output in USA and UK is different due to differences in interest rates.


Understanding of economic environment helps companies to take advantage of opportunities in the global market. The USA has a favorable economic environment, is highly modernized, and employs more diversified advertisement strategies than the UK. Opportunities in the economic environment make Citigroup a more successful bank in the US than in the UK.


Choi, H., Steptoe, A., Heisler, M., Clarke, P., Schoeni, R. F., Jivraj, S., Cho, T., & Langa, K. M. (2020). Comparison of health outcomes among high- and low-income adults aged 55 to 64 years in the US vs England. JAMA Internal Medicine, 180(9), 1185. https://doi.org/10.1001/jamainternmed.2020.2802

Lohosha, R. V. (2021, February). Conceptual reflection of market evolution and limitation of the theory of stepwise approach to the interpretation of market bases of society. In Colloquium-journal. Polska: Warszawa, 2021.№ 2 (89), сzęść 4. Р. 32-41..

Muda, I., -, N., -, E., & Nuradi, T. E. (2020). Stage of takeoff based on Rostow’s theory for the role of manufacture of non-metals, except petroleum and coal manufacture to the economic increase. Research in World Economy, 11(5), 177. https://doi.org/10.5430/rwe.v11n5p177