BUSIENSS

Tesco operations in Nation's Business environment

Tesco operations in Nation's Business environment

Introduction

Business or economic environment includes different factors that effect operations of an organization. These factors include national economic system, fiscal and monitory policies, and competition policies. Tesco is the leading retail stores of United Kingdom and third leading store of world after Wal-Mart of US. Business environment of UK also effects the operations of Tesco which will be studied in this paper.

Discussion

Economic System

The economic system of a country in which an organization is working has a direct bearing on the potential to grow and development of Tesco industry in UK. The organizations cannot escape the impacts of macroeconomic environment factors, be it local or global, which influences the domestic market. Unemployment, inflation, interest rates, tax levels and the GDP growth are certain features of the economic that Tesco need to cope up with.

Income becomes more available to people with real growth in economy as people tend to spend more, which leads to higher sales and profit for the organization. Nonetheless, it is the growth of the organization that leads to the increased compete ion in long run. With the expansion in economy, increased demand urge more firms to come into the market, in order to fulfil the needs of customers. Similarly, inflation i.e. increases in price, few goods being bought at elevated prices (Gilbert, 2003, pp. 67-89). Owing to this fact, as the cost of Tesco goods increases, they try to pass this increase to their customers. On the other hand, it is not possible to pass all the increased cost to the customers, hence cutting of the profit rate of Tesco.

In order to trigger their growth, Tesco has moved into the areas with undeveloped and unemployment, making the areas attractive for business. Tesco, in 6 ...