Impact of COVID-19 on International Firms and Risk Mitigation Plans: A Case Study of Tesco

This report critically analyzes the impact of COVID-19 on international firms, with a case study of Tesco. It discusses how multinational conglomerates are impacted by the pandemic and evaluates risk mitigation plans that international companies can develop to reduce the effects of a global pandemic. The report also includes a discussion on Tesco's performance before and after COVID-19. The subject of the report is Business and Investments, and the course code, course name, and college/university are not mentioned.

Business and Investments

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
a) Critically discuss how international firms are directly or indirectly affected by the covid19
pandemic?...............................................................................................................................................3
b) Critically discuss and evaluate risk mitigation plans that international companies can develop in
order to reduce the effects of a global pandemic....................................................................................7
CONCLUSION.............................................................................................................................................12
REFERENCES..............................................................................................................................................13

INTRODUCTION
An investor can purchase capital instruments and liabilities in various nations throughout the
world via global or worldwide investing. It might be used for a variety of reasons, including asset
allocation, better yields, and increased stability. Financial markets are critical engines of
economic development. Conventional concepts and investing practices have evolved in recent
years in order to adapt to changes in global economic level and development (Aigbedo, 2021).
The task is to maintain the set of regulations up to date. To better understand of the report
selected MNE. The TESCO corporation which is headquartered in United Kingdom is a leading
member of the UK retail industry and operates many successful outlets in UK. The company
ranks at the third position when it comes to terms of gross income and the largest in order to be
profitable. In this report consist of critically analysis how MNE affected by COVID 19 directly
and indirectly. Along with determine risk mitigation plans for international companies to
overcome from the COVID effect.
MAIN BODY
a) Profound discussion on the ways in which the multinational conglomerates are impacted by
Sars-Cov-2 virus
The influence of the corona virus on the international economy has indeed been assessed to
use a number of methods. As per UNCTAD (2020), the European Union (EU), that has a USD
15.6 billion impact on world trade, the United States, and it has a USD 5.8 billion impact, and
Japan, that has a USD 5.2 billion effect, are some of the most affected nations. Despite the small
gauge primarily on the brief and succinct implications of COVID-19 on commerce, this study
suggests that provider disruptions are isolated to China and the rest of the nation's supply held
steady.
According with International Finance corporation Fund's most recent estimates1, the
country's actual GDP increased by 2.8% in 2019, declined by 3.3% in 2020 as a consequence of
the COVID-19 outbreak, and is anticipated to increase by 6% in 2021. These numbers may lead
us to believe that corporations' worldwide activities will recover to which was before proportions
by 2022 (Eachempati, Srivastava and Zhang, 2021) .

The COVID-19 issue had a huge influence on these earnings, involving considerable extra
expenses, a major reduction in hospitality industry efficiency harming Booker's catering
business, a big decline in banks profitability, and a gain from increased UK and ROI consumer
commerce They agreed in December to repay company tax aid, so the whole expense of
corporation tax is now represented in the appropriate income measures, as is normal.
In various sectors of business, the world trade organization is tasked with the
responsibility of building or supervising single or multiple "Enquiry Points" international; to
address consider elements from authorities, merchants, and other related stakeholders and supply
necessary information and evidence. Access to knowledge on requirement specifications and
continuation can be critical in real emergencies, like as the COVID-19 epidemic, because it can
reduce or eliminate delays or denials at immigration checkpoints (Stoop and et.al, 2021).
Before Covid Tesco plc is leading supermarket and gain various advantage in UK like:
Location specific advantage: There is mentioned specific advantage gain by Tesco Plc in UK:

Economic climate in host nation: Due to the general firm's size, it may gain many benefits in
sectors like volume purchases, logistics, marketing, advertising, and innovation. Tesco has
developed and been so profitable since, perhaps, they have been effective in satisfying the
requirements of people. They offer the highest goods at economical prices. It is important to
mention because their consumer base has grown dramatically over the past several decades.
Companies would have tried to gain this even if businesses were unable to provide what the
customers desired. Users know what else to anticipate whenever they come Tesco; there is
consistency in the distribution network. It also helps save time since customers can conduct all of
their purchasing at one location instead of visiting each separate store.
Cost: Tesco, it has been said, can utilize its scale and market strength to push out local
businesses, particularly in city centers. Tesco's are frequently erected in out-of-town retail malls.
It has undoubtedly had a negative influence on the local retailers in large cities. The loss of city
centre stores may have altered the essence of large cities, rendering them less appealing locations
to visit (Butt, 2021).
Diversification: Tescos' vast size and economic ability have allowed it to develop into these other
items including as mobiles, healthcare, gasoline, credit cards, and finance. Tesco has aided in
intense rivalry, providing more options, and lowering customer costs in such sectors.
After Covid Tesco performance
The respective organization’s expectations when it comes to Sars-Cov-2 is that it can have
beneficial impact on the income of the firm in 2020 as most customers continue shopping using
digital channels of TESCO. This is correct expectation by the firm as there was nine percentage
of yearly improvement when the data of 020 is compared with 2019. The company has
reactivated its transit system in the United Kingdom and boosted the number of delivery times it
provides to satisfy increasing growth of internet groceries.
Profits were also damaged by the firm's financial segment's poor performance with the
reduction of actual sale gained by TESCO in case of the food product procurement subordinate
businesses which will be refunded to the UK government completely for the total amount in
foundational rate lessening. After profiting from the change to eating and going to the pub when
cafes, Cafés and bars were forced to shut down, but almost all of the large stores have already

regained their stamping tax exemption. Waitrose, the Co-op, and Iceland have almost all
declined to repay the money that was handed to them (Lin and Falk, 2021).
The company's pretax revenues for the fiscal year that ended February decreased to 825
million pounds (USD 1.14 billion), down from more than a billion pounds the previous season.
Revenue were dragged down by 892 thousand tons in COVID-related expenses, including the
need to hire personnel to represent workers stricken by the condition. The company states that it
has resulted in displeaseing 50,000 temporary workers throughout the outbreak, with about
20,000 of them staying with the company forever.
Tesco's overall income in the United Kingdom and the Northern ireland in fiscal year 2020/2021
was around 53 billion British pounds. It was a greater than one billion pound increase in the price
level fiscal period. The employee management in the UK and ROI fell to 1,866 million in
2020/2021. Between January 2017 and It may 2021, the company lost almost 0.9 percent of its
client base, bringing the total to 27 percent. Several companies from the so "big four," such as
Asda, Sainsbury's, and Morrisons, have seen a comparable drop in existing customers.

Marketplace winners included the German chain stores Lidl and Aldi and the Cooperatives
(Sinha and et.al, 2021).
The UK's largest supermarket recorded a 7 percent revenue increase to £53.4 billion,
which it described as "incredibly fantastic." Despite this, pre-tax earnings declined by almost
20% as a result of a range of Covid-related expenditures, such as paying full reimbursement to
workers that were unable to work owing to illness or incapacity. In addition, it spent £535
million after renouncing business tax breaks. In March, the government formally declared a
corporation tax holiday to help retail, entertainment, and tourist industries deal with the
pandemic. Grocery stores, but at the other extreme, are classed as important stores and may stay
available in during shutdown. After first being criticized for handing out thousands of pounds in
dividends, Tesco has said that it will repay the rate reduction. Tesco's comes to the fore earnings
dropped from £1 billion to £825 million.
b) Critical discussion on evaluating ways to eliminate risk which can be used by international
businesses to manage the negative impact of global pandemic
It is important for firms to identify elements threatening success of the company so that
any scenario which can damage the success of the firm is identified and estimated quickly and
any loopholes in the controlling and monitoring processes can be improved in case of crises
situations such as financial failure or healthcare epidemic. Whenever confronted with hazards,
first-level executives on the front lines are best placed to analyse how some situations may affect
their accountabilities (Vlassis, 2021).
Not even all hazards inside an organization’s strategy or operations should be managed its
same manner. An economic study report provides assistance to the company in determining if
the different elements of their business processes are optimal to success. The outcome of such
studies need to be used for deciding the components of the firm which must be prioritized
throughout an operational plan incident in order to keep systems running. A pandemic is an
aggressive illness that spreads quickly and poses a worldwide hazard. Pandemics may cause
social and economic upheaval. They have the ability to significantly disrupt operation of the
company by disrupting the distribution network and causing excessive absenteeism. This may
make it increasingly challenging for all of you to deliver goods and services to the market. It is
critical for a company's existence to handle the risks posed by an epidemic. A planning process

can help you manage the impacts of an outbreak while still satisfying business contractual
responsibilities to workers to ensure their safety.
The financial function of the firm played an important role supported the company in
quickly acting against the healthcare situation and enabling the company to make organizational
changes in light of pandemic. In April, the firm more than doubled its shopping online capacity
and became the first UK retailer to satisfy one million online food orders in a single day. At the
height of the crisis, Tesco employed over 50,000 more casual foreign employees to bolster its
current workforce on the shop floor, in fulfillment centers, and in warehouses. Nonetheless,
Tesco's financial team was having a big impact on more than simply the bottom line. Players on
the team also worked on the shop floor (Tardivo, Carrillo Zanuy and Sánchez Martín, 2021).
Action Threat Employee
s in
danger
Controlling factors Required
training
Assertion
Increase
level of
absent staff
due to
COVID 19
Inadequate
quantity of
coworkers to
ensure good
working
conditions
Customer,
staff
Management has
the ability to close
the shop if they are
unable to sustain it
with a suitable
number of
associates.
• A standard
recruitment
strategy is in effect.
Warming
through
induction
Tesco for
Interim and
Partnership
Former
classmates -
Click &
Forget and
Shops
Support
Center
• Persons
updated via
Coronavirus
The Groups
Human
Security
Team
conducts an
in-store
evaluation of
established
procedures
and provides
recommendati
ons.
• Beginning
in week 14, a
safe and
reasonable

recruiting -
Response
Capability
• Coworker
Support
Levels of
funding and
Transfer
Policy
• Security and
legal audits
— interim
inquiry sets –
large and
simple
audit will be
conducted.
• Beginning
in week 27,
monthly safe
and
reasonable
inspections
for peers and
managers
were logged
on the
portable
device.
• Physical
validation of
screening and
barriers
placement
• Examine
CCTV in the
store area to
ensure
conformity
with
guidelines.
Routine
activity in
The virus's
persistence
Colleague
s, client
Thorough cleansing
using an authorized
Maintaining
Clean
The Group
Human

store in
customer
facing
areas
and
persistence on
objects and
hand contact
sites allows it
to spread to
the fingers of
coworkers
and
consumers.
cleaning product.
For a more
complete
inspection, kindly
see the cleansing
chapter.
• Cosmetics
samples and blue
donation tokens
must be removed.
• Non-essential
activity should be
stopped or only
opened if it is
acceptable to do
this and social
loafing can be
preserved.
• The shutdown of
the Public Center
and the dressing
rooms.
• Proper washing of
trolleys and hamper
arms with an
authorised cleaning
agent by the front
end and scooter
employees.
• A washing station
is located at each
Trolleys -
Coronavirus
Updates -
Thursday,
March 19th -
Second
Version
• FAQs on
Safety and
Legality:
Covid-19 –
GPS
Connectivity
• Case Covid-
19 Give
Relevant
Center
Booklet
• Social
Distancing
Counseling –
Give
Relevant
Center
• Monday,
March 23rd,
PFS Pump
handle
Security
Team
conducts an
in-store
evaluation of
established
procedures
and provides
recommendati
ons.
• Beginning
in week 12, a
safe and legal
audit will be
conducted.
All businesses
will be
inspected by
an outside
supplier.
• Beginning
in week 27,
weekly legal
and safe
inspections
for peers and
managers
were
documented
on the tablet

store entry.
• A reduced
permitted cleansing
chemical is
provided for
consumers to
cleaning carriage
arms, and a pos
system is in
position to educate
how to use it
securely.
• Cleaning ladies
concentrate on
interactions in
Wide Print and
Metro areas.
• As component of
Cleaning as you
Go, employees in
all media
concentrate on
connections in their
region.
maintenance
– Coronavirus
updated
> Shops
Support
Centre –
Clean and
Clean
Documents
• Security and
regulatory
audits –
temporary
inquiry sets –
large and
express –
GPS
SharePoint
• Emails –
Covid-19
Weekly
Business
Updates –
GPS
SharePoint
31.03.20
or
Smartphone.
• Third
regular
maintenance
inspection
Tesco's global like-for-like sales climbed by 6.3 percent to £53.4 billion in the fiscal year
ending February 2021. Revenue in the United Kingdom climbed 7.7 percent year on year to
£39.4 billion. During the same time period, its total sales net earnings declined 14.7 percent to
little under £2 billion, showing the costs of being available in the face of the pandemic. In terms

of keeping retail businesses secure for clients, the need for messaging and other internet
companies demanded substantial extra cost. As a result, profits after tax fell by 19.7 percent to
£825 million (Orji and Ojadi, 2021).
Although many firms reduced marketing spending even during epidemic, Tesco remained
active year round, introducing fresh incarnations of its 'Food Love Stories' creativity and
promoting its Clubcard offer through into the 'The Ability to Reduce Costs' promotion. We've
been eligible to function together during the recession and tackle several of the obstacles we've
faced thanks to lengthy relationships with our vendors. They interact with almost 3,000 vendors
in the United Kingdom just, all of whom have been impacted by the epidemic. As the situation
worsened, we intended to do everything we could to help these firms. These smallest
manufacturers have frequently been the worst impacted, thus implementation and adjustments
were completed form the beginning of SARS-COV-2 crises to be assured that the vendor at
lower end of the scale are given payment quickly instead of the conventional 14 days. This
modification will be in effect for 3 months. Many vendors often supply food to eateries, cafés,
and the meal service business (Alam and Abdurraheem, 2021).
CONCLUSION
The COVID-19 pandemic caused the most severe and rapid drop in the international economy in
recent history, affecting commerce, overseas investors, and world travel. While this is a
significant decline from recent gains, it does not necessarily imply the end of the worldwide
market or its promise of future expansion. Certainly, the economic climate will pose additional
hurdles to global commerce and development. As business executives navigate some of these
problems, they will have to make judgments regarding the future of globalisation and trade.
Humanity Partnerships and CFO Research polled CFOs in firms with aspirations for global
expansion and sales of more than $100 million.

REFERENCES
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Online
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