Safeway Inc - Assignment Example

Safeway Inc. The financial crisis of 2008 had major effects in many multinationals and domestic companies Safeway Inc. being among them. One of such impacts was the financial shock on capital structure bearing in mind that Safeway Inc. never anticipated this crisis. The company had to employ internal funding and concentrated more in obtaining credit from domestic banks expecting or anticipating restricted credit access in the future. As one of the largest food retailers, Safeway Inc. demand was affected in many ways.

Some of their products that are considered luxury products recorded low sales. In addition, they were affected since their target and loyal consumers no longer possess a large pool of any discretionary income affecting the overall demand thus revenue. Politically, the external environment that Safeway Inc. operates was significantly affected. During this crisis the Fed set tough laws and regulations concerning credit and lending to help the economy pull through. These monetary policies by the government never favored investment and plough of capital to the key sectors of growth of the company such as the necessity retail products.

These further weakened the company’s competitiveness since this is an environment beyond the control of the company. Financial crisis directly affects the revenue obtainable by the company. Due to the financial crisis of 2008-2009, the company had to rethink on its social responsibility to boost sells. Prior to the crisis, the company was involved in various social participation such as charity events that help improve their relationship with the customers they serve. The company had to lower its active role in social participation and societal charity.

This affected their eventual competitiveness after the crisis. ReferencesTop of FormSavona, P., Kirton, J. J., & Oldani, C. (2011). Global financial crisis: Global impact and solutions. Farnham, Surrey, England: Ashgate.Bottom of Form