mr didi

 One of your businesses from P1
 And the business in another country
 Provide graphs for all relevant parts

 Economic environment facing the business
 1. Trends in the national economy
 (Recession, rising demand, supply issues)
 Explain all parts of the business cycle,
 Fear of excess borrowing by customers
 Rising interest rates
 Skills shortages
 Unemployment and employment

2. Trends in the global economy
• Expansion of the EU
• war and its threat
• Fear of terrorists
• Movement of jobs from UK to developing countries

 Economies grow over time – Economic Growth
 Measure in a number of ways including:
 Economic analysis- opinion
 GDP gross domestic product
 Levels of Inflation VAT rise
 Government policy in relation to the business
 Changes in GDP and in demand
 Changes in conditions of supply
 Global interdependence- the supply chain, ownership, acquisition of capital.
 Recession of Uk
Trends in the national economy
 The UK economy has mounted a strong recovery over the past year and we expect this to continue in 2014-15. Most sectors and regions of the economy are now showing positive growth trends, with recent signs that business investment is also starting to pick up. In the longer term, reshoring could also boost output and employment in both manufacturing and services.
 However, while the recovery has been rich in jobs, it has been poor in productivity and wages. Median real household incomes remain well below pre-recession peaks and can only be expected to recover gradually over the next few years.
 Therefore, while the economy as a whole is firmly on the road to recovery, it may be some years before many low and middle earners feel the recession is really over.

Tesco Changing Business Environment
Introduction
Tesco was been founded by Jack Cohen, on his first day he managed to gain a profit of £1 and sales of £4. Tesco is ranked third in world for largest grocery retailer, with its operations in more than 14 countries. The name “Tesco” had appeared first in 1924, and its first shop was opened in London. In 1947 the company was been listed on London Stock Exchange and in 1948 it opened the first self-service shops for business. First Tesco supermarket was opened in 1956 in Essex. In 1947 Tesco started selling Gasoline. Its annual Turnover in 1979 was around 1 billion pounds. It started its first senior department in 1975 and in 1997 Its first Large stores (extra). Companies main purpose is to create value for customers in order to earn them lifetime loyalty. This strategy made them successful and is now the topmost Supermarket in UK. Tesco apart from being one of the largest retailers for food have also embraced the non food products and expanding on household goods, toiletries, electrical items, clothing etc. One of the most important strategies of Tesco is focus on non food items.

Overview
The UK economy recently emerged from a long period of economic recession. National statistics and surveys provide generalised findings of the current state of business during and after recession but fail to offer insights into how UK based businesses made (or failed to make) strategic responses, during the period of recession and subsequently.
Initial impact of recession and the short and medium-term actions taken in response
• Impact of recession:
About half of UK businesses said both profitability and turnover were down year-on-year. About a third expected improvement in both over next the six months. Nearly two thirds of UK businesses were cutting costs with travel being a key area where costs were cut. UK Business over the next six months, but much less pessimistic about their own company.
Due to the ongoing recession UK and American markets have been affected by economic concerns. Loss of employment and Lower income available will impact and strategic focus may need to change to lower priced basic products with less focus on higher priced brands and luxury products suggesting a change in pricing structure.
2. Due to modern development and constant changes in technology there are a lot of changes to consumer buying behaviours. Requiring further analysis - as technology develops consumer buying patterns change which will result in product areas requiring evaluation constantly to keep up with the demands.
3. Rising raw material costs from both food and non food will impact profit margins overall.
4. Sourcing changes to Far East locations with regards exporting restrictions on some non food product areas will reduce margin rates on products with already low margins.
5. Tesco has always feared the threat of takeover from the market leader Wal-Mart who has both means and motive to pursue such action. Wal-Mart has been a leader especially in the US market for few years now. With its alliance with ASDA in the UK they are one of the nearest competitors.