Understanding the Business and Economic Environment
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Added on 2023/06/11
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This report discusses the business and economic environment, industry analysis, STEEPLE analysis, demand and supply factors, competitiveness of the UK market, and challenges faced by Tesco. It also covers the determinants of demand and supply, and the impact of external factors on business decisions.
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Understanding the business and economic environment
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Table of Contents INTRODUCTION..........................................................................................................................3 MAIN BODY...................................................................................................................................3 Industry Analysis........................................................................................................................3 Structure of the chosen industry..................................................................................................4 STEEPLE Analysis.....................................................................................................................4 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10
INTRODUCTION Business environment refers to the external influence, circumstances which are beyond the control of the company and also having the impact that hoe they are being influencing in the market. There are certain type of company which are operating in the market for say, public company, non-profit organisation and voluntary firms which are operating in the market(Alam and Grose, 2022).They all are working with the sole aim of having the major consideration in the large marketplace so that they can sustain in the market for long period of time. Furthermore, this will cover the factors which are associated with the development and the enhancement of the company. This assessment will studies the allocation of the resources in an effective manner. For this, Tesco is the respective public limited company which is operating in the United Kingdom. The headquarter of this company is in Welwyn garden, England. It is the leading company which is operating and their operations is being measures on the basis of their gross revenue in the globe. MAIN BODY Industry Analysis It is the technique that is related to analysing the company and this analyse the position of an organisation in the particular marketplace. It is the major consideration in which the respective market is being operating with the proper planning in the given business. The chosen industry for this is the retail industry from the UK standard industrial classification(SIC 2007). Furthermore, there are various that are making up the UK grocery market and involves small supermarket, online trading & conventional stores.There are various supermarket chain that is Asda, Morrisons and Sainsbury that are suffering by reducing the overall sales of the company and these are being evaluated and controlled by the competitors as they are not able to sustain in the market in the large marketplace.
Structure of the chosen industry There are various that are running their business in the retail store which are considering the areas that are centralised, operations and regional business. Furthermore, centralised business operations involves the roles and responsibilities of the store planning and the various factors of HR manager. These are the various resources which are ensuring the flow of goods and services in the given marketplace and also meeting the needs of their potential buyer who are resident in UK. There are various types of retailer which are conducting their business in with the single- store retailer and chain companies around the world. STEEPLE Analysis It is the advance analysis which measures the palaeoenvironmental external factors and it also give the detailed introduction of the eternal field. The acronym for STEEPLE analysis stands for Social, technological, Economical, Environmental, Political, legal and Ethical. In context to Tesco, following factors are explained as follows: Social factors:these aspects includes the culture, social norms, values and their belief as when the individual changed their mind for purchasing the organic goods by which Tesco can attract the large customer base and they can include the overall consideration in the
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target marketplace. These are the aspects which is based on the choices and the eating habits of the consumer by which they can change their attitude and mind set for purchasing the particular goods and services. Technological factor:With the change in the market trends, there is the sudden change in the business which is impacting the overall functionality of the business in the target market. When the company is using the innovative machine or the methods which helps them to sustain in the competitive market. They are also coping with the new methods and experiments due to which they attract the large group of customer by giving them new set of products and services to their potentials buyers. In context to Tesco, they are operating their business and also introduce that they can pair-up with the Amazon Go, also they have new technology for making cask less billing which help the buyer to make quick purchase by which they can avoid the hassle free billing and purchasing in the market. Economical factor:These are the aspects which needs to keep in mind by Tesco as they impact in adverse manner which is directly occurring in the market and also hurdling the entire functionality of the business. Identify the microeconomics factors which affects the demand of products and services with the demand curve: Demandis the fundamental concept which is related to the microeconomics and define the desire of the individual in order to buy the buy the particular goods and services in the target market. In relation to Tesco, rise in the price of commodity tends to impact the demand of gods in the target market.
Following are the determinants of demand which are given below: Given price ofcommodity:This is clear that the given prices of the product tend to rise then the respective demand of the goods tends to rise in the marketplace . It is clear that the consumer always look for the goods which are affordable to them(Panda and Gupta, 2022).In relation to Tesco, when the given prices of goods and services are being sell on high prices then the demand fir such goods tends to reduce in the target market. Income of the buyer:it is being known that when the consumer is having the high income level then it leads to increase the overall demand of goods in the target market, When the income of the consumer tends to rise the the overall demand of commodities also increases and vice-versa. Enlist the determinants of supply and what would cause the supply to fall/rise with the help of supply curve. Supplyis defined as the total amount of goods which are being available for the sale in the target market. In relation to Tesco, there are various factors which are influencing the overall supply of goods in the target market. Following are the various factors which is influencing the supply of the commodities in the market are explained as follows: State of technology:These are the factors which is majorly contributing to the growth of the business. In relation to Tesco, they are updating its technology in their machine and methods for producing the commodities in the target market which also leads to increase
the overall supply of goods by which they can generate more revenue and profitability. These are the aspects which leads to haver the major consideration in the target market. Number of firms in the market:There are humourers firms which are operating in the market and sustaining in the competitive world. It is being stated that when there are large number of firm operating in the same industry then the supply of such goods tends to slow down as consumer will be divided in such firms as per their choices and preferences(Koleša, Burger and Dickmann, 2022).In consideration to Tesco, there are companies such as Asda, Morrisons who are operating in the same industry and giving tough competition to the other companies as well. Discuss the competitiveness of the UK market and its influence on future of the business. Competitiveness is the word which explains the overall market scenario in the market and helps the company that they can sustain in the market for long period of time. It is being analysed that the UK is expecting the to 11.00 in the end of the year 2020 and this is also being evaluated and recorded that the trading economics global model in the market. It also helps the Tesco to be the leading company in the globe and they are retaining their good brand image in the large market segment. Examples of random shocks that could undermine the UK government fiscal policy and analyse if there is an monetary and fiscal policy impact the economy of UK. Random shocks are the emerging critical situations which is being occur and includes the global pandemic due to which there is the big outburst of the COVID-19 and with this, there is
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the complete lock down in various nations and the entire world is going through the major issues and continuous fighting against this. This is majorly impacting the entire economy of United Kingdom(Wegwu, 2022).As per this, the governmentput huge taxes on export and import which leads to slow down in the company and leads to have restrictions of the people for their travelling from one place to another by which many corporate sectors is being impacted badly in the market. All the taxation policy is being implemented in the market and t is being control and formulated by the government of UK itself. They are ensuring the better functioning of the business by which they can effectively contribute to the economy of the country. As the UK government is imposing the huge restrictions in the flow of goods and services in the large market. Environmental factor:These are the factors which includes the ecological balance and the sustainability in the target marketplace.In this, Tesco is taking the initiative for enhancing the overall environment by which they can rightly create effective sustainable environment. Moro-ever, They are focuses on its 2 phase in that they are using the reuse, remove, recycle and reduce so that they can have the proper working within the market and the company. Political factors:These are the factors which is related to the government stability by the government and the entire working of the company. When talking about UK, there is the stable government which help the Tesco is ensuring the smooth functioning of the business in the target market. There are certain retailing company which are operating in the respective sector so company needs to follow all the rules which is being imposed by the government so that they can rightly comply with the political environment of UK. Legal factor:These are the certain policies which is basically affects the overall operations of an organisation which are to be followed in the global market. In context to this, food retailing industry commission also laid down the certain issues which needs to be followed by the company who can respectively operating in the similar industry. Ethicalfactors:Thesearethefactorswhichincludestherespect,effective communication and honesty which ensures the employees to effectively work in the given organisation(Liu and Xia, 2022).In context to Tesco, they are ensuring th better working and providing the good working environment to them so that they can retain in the business for a long period of time.
Discuss the business problem and challenges which is being faced and criticise on the external effects of a business decision. Tesco is public operated company which is completely controlled by the government of UK. With this, they are making effective working by which they are ensuring to follow all the rules an regulation so that they can rightly sustain in the market for long period of time. But being a public limited company, they can not go out of the box and can not expect any change which are not the standard operating procedure of the government. CONCLUSION From the above report, it is being summarised that there are various types of business which are operating in the market and their dole consideration is to ensure their huge profits and growth in the target market. Moreover, STEEPLE Analysis is being used in order to understand the impact of the external factors on business environment. In economical factor, demand an supply are the two aspects which is ensuring the better flow of goods and services in the target market.
REFERENCES Books and Journals Liu, X. and Xia, T., 2022. The innovation paradox of political capital in transition economy firm: Innovation and political capital.Journal of Business Research,142, pp.775-790. Wegwu,M.E.,2022.DEFENSIVESTRATEGIESANDFIRM’SRESILIENCEINA DYNAMIC BUSINESS ENVIRONMENT.World Bulletin of Social Sciences,6, pp.41- 50. Koleša, I., Burger, A. and Dickmann, M., 2022. The effects of institutions on emerging market firms’internationalassignmentlocationdecisions.EconomicandBusiness Review,24(1), p.1. Troise, C. and et. al., 2022. How can SMEs successfully navigate VUCA environment: The role ofagilityinthedigitaltransformationera.TechnologicalForecastingandSocial Change,174, p.121227. Panda, A. and Gupta, R.K., 2022. Understanding Organizations and Business Ecosystems in India Using Business Systems Framework. InIndigenous Indian Management(pp. 307- 345). Palgrave Macmillan, Cham. Alam, Q. and Grose, R., 2022. Shifting sands in the regional business environment in Australia. InRegional Businesses in a Changing Global Economy: The Australian Experience(pp. 1-10). Routledge.