Describe the Influence of Two Contrasting Economic Environments on Business Activities Within a Selected Organisation

1723 words 7 pages
P5-Describe the influence of two contrasting economic environments on business activities within a selected organisation

Within my selected organisation, Tesco, there are 2 important economic environments that have an influence on business activities. Both economic environments will have a different way on affecting Tesco. The economic environments are growth and recession.
Economic growth occurs when more goods are being produced and consumed, and incomes are rising. A growth company tends to have very profitable reinvestment opportunities for its own retained earnings.
Economic growth will affect Tesco as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more
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These ‘fast foods’ are eaten because of their convenience and due to time shortages from working longer hours these food are the easy option. This implicates less healthy diets and obesity in the UK population.

M2-Compare the challenges to selected business activities within a selected organisation, in two different economic environments [IE]

Tesco delivered a 10% increase in profits to a mighty £3.4bn and chief executive Sir Terry Leahy declared the retailer "stronger than it was before the recession". There is no single secret to Tesco's success, but at the heart of the company is its focus on customers. Its mantra is to look after them, and everything else will look after itself. It sounds simple, but few companies are as focused. Size also matters. Selling more means better buying terms – and that equals lower prices and/or higher profit margins. Lower prices then bring in bigger sales volumes. Tesco, like so few of its high street rivals, has succeeded in making itself largely classless, with price ranges designed to cater across the board.
Britain's biggest retailer Tesco has called on the Bank of England to cut interest rates on, despite the fact the supermarket giant has yet to see any impact of the slowdown in the economy after reporting an increase in like-for-like sales. Overall the business in the UK was making good progress, and that Tesco Direct and had both delivered "very strong"


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