logo

Business Environment Factors Influencing Decision Making and Products Price

   

Added on  2021-02-20

11 Pages1331 Words62 Views
CONTEMPORARYBUSINESS ENVIRONMENT

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3TASK 1............................................................................................................................................3CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6

INTRODUCTIONBusiness environment is basically all the factors whether internal or external which actsupon the organization and influences their operations. This essay addresses the various internalas well as external factors which influence the company' s environment, their impact on decisionmaking and factors affecting price of products. MAIN BODYTASK 1External factorsPolitical factorsThe main political factors include political stability of a country, tax policies, labourlaws, government policies etc. These all factors have an influential effect on the company. If thepolitical stability of the country is strong like less corruption then the companies operation withinthat country would be stable enough. For example, The high impact of Brexit on the food pricescan affect TESCO in a variety of ways like they can be pressurized to seek much expensive UKsuppliers instead of EU suppliers.Economic factorsThese factors encompasses economic growth, interest rates, exchange rates etc. Thenegative impact of this on organization is that if the unemployment rates are high then it wouldbe difficult for companies to retain and attract talented employees (Boone and et.al., 2019).Besides this, if the economic growth of the country has flourished then it would be easy for thecompany to operate as this the demand and supply chain will become more defined. For exampleIn 2017, the unemployment rates in UK has increased to 3% and is expected to rise in nearfuture. This can be difficult for TESCO to attract skilled candidates for its expansion and mighthave to depend on the conventional recruitment for hiring and retaining the employees.Social factorsSocial factors encompasses the population rate, health consciousness, cultural barriers,attitudes etc. The fluctuating trends of the consumers regarding the fashion and lifestyle can havea negative impact on the organization as varied demographics will have varied cultures andvalues (Phillips and Moutinho, 2018). On the other hand, growing awareness of the consumersfor the healthy diet can have positive impact on the food retailers. For example, nearly 47% ofthe consumers in UK now focuses on low cholesterol low fat beverages and food and are looking

for low sugar alcoholic drinks which can help TESCO to emphasise more on healthy diets intheir supermarkets. Technological factorsTechnological factors include level of innovation, technological changes etc. Theincreasing demand of the people for online platform can have positive impact on TESCO wherethey are highly involved in providing majority of items on the online websites. But the heavy useof advanced technology like fingerprint software to replace the use of card by their competitorscan have negative impact on them as TESCO spending in R & D is low. Internal factorsSWOT analysisStrengthTESCO dominates the Great Britain marketwith around 5%market share.The diversification strategy of TESCO isimperative where their they provide a range ofproduct line and mix (Domanović and Janjić,2018).TESCO has global presence where they havemore than 6700 stores in around 14 countries. WeaknessSome subsidiary's of TESCO have failed tooperate successfully and thus are more toexternal factors.The pressures from competitors have resultedin price wars which has eventually eroded theprofit margin of TESCO suppliers. OpportunitiesEntering into a strategic partnership withleading companies can be provide TESCOwith the golden opportunity to offer variedproducts as well as attract the competitor'scustomers.There is a huge opportunity for TESCO togrow their online business in various parts ofworld as well as upgrade the delivery services.ThreatsThe rising growth of their competitors likeWalmart, Carrefour, the market position ofTESCO make be threatenedThe increasing unemployment rates in UK canbe a biggest threat for TESCO where it wouldbe difficult for them to attract skilledcandidates.

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
International Business Environment - 01
|17
|4673
|77

International business environment | assignment sample
|15
|4142
|162

PESTLE and SWOT Analysis of Tesco
|9
|2081
|130

Understanding Business Environment: Tesco Case Study
|11
|694
|175

Factors Affecting TESCO: Political, Economic, Social, Technological, Environmental, and Legal
|1
|784
|35

Evaluation of Business Environment of TESCO
|6
|1352
|27