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Environmental Anaylsis

Environmental Analysis

Introduction

The study of macroeconomics is filled with several competing theories. The dominant theory used in modern macroeconomic analysis is the aggregate market. This paper is to give a brief yet insightful look into the macroeconomic and internal operating environment of Mohawk Industries in particular their floor covering division, focusing in the area of carpeting while analyzing these cyclical processes, we will also take a slightly more in-depth look at the macroeconomic factors of the textile industry which birthed Mohawk Carpets.

Mohawk Corporation

Mohawk Carpet Corporation is a one of the three subsidiaries of Mohawk Industries, MCC markets and distributes carpets and rugs in a variety of patterns, textures, colors and styles across the United States and globally to retail markets, commercial markets and more, in pricing they range moderate-expensive, marketing to demographics of varying degrees. MCC is well branded through the use of effective advertising quality carpets such as Horizon, Galaxy, Mohawk, and Karastan to name a few, enables them to keep their competitive edge. The Carpet and Rug Mills Industry in the US manufactures and finishes carpets and rugs for the domestic, commercial and industrial sectors. These products are generally woven or tufted from cotton, and made from nylon or other synthetic materials; most carpets and rugs are used by the final purchaser as a final good. Some of the industry's products are used as intermediate inputs in automobiles and boats. MCC decimates the competition through fleet ownership of delivery trucks on both sides of the globe, they constantly scan the competitive landscape of their industry and they are environmentally conscious and are prominently respected as being so, they stay innovative and visionary as they have been from the very outset, they remain abreast about industrial productivity technologically; among companies like Shaw Industries their most fierce competitor of the others operating at Mohawks' level of consumer adoration in dollars, a lot of them.

Macroeconomic Variables

"The carpet and rug mills industry (NAIC Code 31411), falls within the manufacturing industry, and comprises establishments primarily engaged in (1) manufacturing woven, tufted, and other carpets and rugs, such as art squares, floor matting, needle punch carpeting, and door mats and matting, from textile materials or from twisted paper, grasses, reeds, sisal, jute, or rags and/or (2) finishing carpets and rugs (US Census Bureau, 2002)."

For the last five years, Mohawk has continued to expand its business more than ever. There have, however, been some macroeconomic variables that Mohawk has had to weather in order to achieve this success. These macroeconomic variables are gross domestic product (GDP), inflation, and unemployment. As the GDP fluctuates, it will impact inflation and unemployment which will ultimately impact the business.

Mohawk has gained its status in the carpet and rug mills industry through its numerous acquisitions. In 2000 and 2001, the acquisition of Crown Crafts and Dal-Tile were merely two more acquisitions that helped to further substantiate Mohawk's status as an industry leader. In 2002, there was an economic slump and oil prices were