Impact of Macroeconomic Factors on TESCO's Economic Activity

Global Business
Economics and
Finance

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Brief description of the company...........................................................................................3
Analysis of the market structure.............................................................................................3
Analysis of major macroeconomic indicators and impact on firm’s economic activity........4
An analysis of the monetary and fiscal policy It is the rate a bank or other lender charges to
borrow its money, or the rate a bank pays its savers for keeping money in an account........5
CONCLUSION ...............................................................................................................................9
REFERNCES:................................................................................................................................10
Books and Journals:..............................................................................................................10

INTRODUCTION
Business Economics is a field of applied economics that includes study related to
organisational, financial, environmental, market related issues faced by the corporations. It is
important to have knowledge about the business economics (Adekola and Sergi 2016). It is
important to know about the macro environment factors and their impact on the organisation.
This report is based on TESCO and its operations in UK and China. TESCO is a British
Multinational groceries and general merchandise retail store that has its headquarters in Welwyn
Garden City, England. In this report there is discussion related to the company and analysis of
market structure that is followed by company in two countries. Discussion related to major
macro economic factors and their impact on organisation's economic activity. Along with that
there is analysis related to fiscal, foreign trade and monetary policy of the two countries and its
impact on firm's economic activity.
MAIN BODY
Brief description of the company
TESCO is a multinational organisation that has its operations around the globe. It is
largest chain of supermarket all over United Kingdom. In addition to grocery stores, TESCO
have their operations in clothing, electronics, books, furniture, toys, internet services, petrol,
software, telecoms and financial services (Chang, McAleer and Wong 2020). The company is
third largest retailer in the world if measured in gross revenue. TESCO was founded 102 years
back in 1919 by Jack Cohen. TESCO provides employment opportunity to around 423,092
employees. The net income of company in 2020 was around £0.973 billion. The revenue of the
company is approximately around £64.760 billion. The company has a established image in
market.
Analysis of the market structure
Market Structure shows degree of competition in the market. The market for goods and
services can be determined through the degree of competition present in the market. Market is a
place where buyers meet sellers to purchase goods and avail service in return of money. There
are various types of market structures that are present. The different types of market structure are
discussed below:

Perfect Competition: This is most competitive market in which there are number of
buyers and sellers that buy and sell homogeneous products and services. Also the buyers have
option to switch the seller as there are direct competitors in the market.
Monopoly Market: It is a market situation where there is only one seller and there are
numerous buyers available for the product (Hampden-Turner and Trompenaars 2020). There is
barrier to entry in case of monopoly. The single supplier have full control over the market.
Oligopoly: It is a situation in which few firms sell goods and services. The products
offered by firms are homogeneous. In this the industry is dominated by small group of large
sellers. It reduces the competition in the market.
Duopoly: It is a special case of oligopoly where there are only two sellers that sell
independently and there is no agreement between them. No matter they are independent, change
in price and output affect other.
Monopolistic Competition: It is a market situation where there are number of buyers
and sellers that sell differentiated products and services. The focus is present the product in a
way that is better that competitors. The goods are not similar to each other, they are not perfect
substitute of each other.
In United Kingdom TESCO is an oligopoly as it is not the single supermarket. But
TESCO is a dominant player in the market of UK. There are various other firms that are in the
same market. TESCO has captured the market and is a leader in the market of UK. All the other
players in the market all have captured significant market share.