Executive Summary: Impact Of Economic Environment On Tesco

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Impact of economic environment on Tesco

The economic factor of an organisation describes economic environment by examining the business cycle such as employment, inflation, international trade and growth. The economic factors of Tesco are of great concern because they influence price profits, costs and demand. The economy’s main influential factors are high level of unemployment which decreases the demand for several goods. The international business of TESCO is still increasing and it is expected to contribute higher amount to the income of the company over next few years but still the company is still depended on the market (Jelassi and Enders, 2005). The company can be badly affected by the slowdown exposed to the food market of UK. The
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It has stores in Europe, Japan, India and Taiwan. The environmental and political factors of European and UK influence the performance level Tesco. The legislations of these countries advised to the stores of Tesco to recruit people for different positions in the company. The following hiring person includes students, senior citizens and disables. Tesco local business suffers a lot due to high competition, for the survival of these stores the company cuts the jobs and has a higher number of employees to accommodate them. They usually pay them a low amount of wages (Cole, 2013). The performance of Tesco has been affected by different government legislations and policies. The company is bound by the law to not to take the payments from the suppliers to take the order for goods and other kind of activities. Tesco has to face strong competition in the market which created stiff competitions in the prices of the branded products and demand for the product diversification. The policies of government controls the monopoly and minimum purchasing power of the customers reduces the chances to enter into the sectors of food market with such controls. Tesco has been allowing the discounts on purchasing the petrol to their customers based on the amount they spend on buying the groceries from the stores (Hill, n.d.).The strategy of Tesco is to keep the prices low on promotion and increases the prices on other product …show more content…
The government of UK spends money on Tesco which helps the company for growing in the competitive market to ensure that the standard of living of the people in the country remain high which assist the economy to go down during the recession. In return of that the government receives money from the taxes such as income tax, Ni tax and Vat which is from the general public. If the business of Tesco is not running at best of their ability because there can be less money or less customers then the inventors would not invest in the market share of Tesco (Merino, 2013). The spending form the government helps business to stay in a float and maintains their business in running because they spend money in the private sector without any realization. The shortage form the government would affects the economy that can also create impact on Tesco: The government investment in the defensive part of the country, the money invested in the police force are donated to build shelter for the homeless and purchasing various items such as shields, batons. The police workers have decided to purchase food items from Tesco. The money invested in the police department is to pay the workers (Young, 2009). The effects that came into action due to the investment of government in the police force of the country. The police force has to purchase the gear from the private sector and investing money to purchase the product of

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