The political, legal and social environment all affects in the activity of the business. This article focuses on how they do this on Tesco in the UK and also in China.
Tesco’s in UK
Tesco’s started operating in the UK 1924 and by now, the run 3054 stores just in the UK. Tesco is a worldwide business, but over 60% of group sales and profits come from the UK business. I will be investigating at external environment for Tesco’s in UK – political, legal and social and how these affect the business activity of Tesco.
Looking at the political factors there are many that affect Tesco’s activity. The political stability is that the parliament act 2011 fixed all the terms for a government that won the election to 5 years, this means that businesses can benefit from a more predictable set of government policies that are less likely to change. This affects business-planning activities because it is possible to make decisions about products, human resources, transport, building design with more certainty as there is no chance that the government can choose to hold an election early.
The government sets the rates of tax that businesses have to pay. Businesses have to pay. One of these is corporation tax, which Is paid on the profits that a business makes. Recently the government has reduced the rate of corporation tax which might impact on the business activities of Tesco because they are then able to keep more or their profit which would mean they can either return more money to share holders as a dividend or it will let them invest larger amounts of money into the business such as the current process of refurbishing the stores to make them worth customers going into.
If Tesco want to open a new store in the UK, they would need to get permission from the government and that would affect them, as they get the planning permission, they have to wait and cant do anything. This affects the development of the