(M2) Compare the Challenges to Selected Business Activities Within a Selected Organisation, in Two Different Economic Environments
It is very common in large businesses to expand abroad but there are a lot of factors to be considered when planning to start operation in a different country as countries differ depending on their background, policies, infrastructure and stability. In this report I will compare the challenges to business activities within Tesco Plc. In two different economic environments: China and UK. I have chosen China and UK as two contrasting countries and my chosen business is Tesco Plc., a large retail store in the UK. China is the 2nd most populated country in the world and is the largest economy in the wold in …show more content…
Import Taxes - High import taxes are barriers to some business especially those such as: Tesco as they have to import most of their products, which costs them a lot of money that makes it harder for Tesco to expand in china. Although import taxes are high in china. Tesco could negotiate with the Chinese government for on exchanging goods between the UK and China for a lower import tax rate.
Lack of appropriate skills – It is much cheaper foreign organisations to use local labour in china although it might not be as effective if the workers lack the appropriate skills. Tesco has to consider this aspect before opening up a store in China because if there is a lack of skills in the country it would affect Tesco’s sales and profit as good employee performance and the right skills for a specific task are essential in a business such as Tesco. Outsourcing activities using local labour may be cheaper for foreign firms this basically means that it will be so much cheaper for Tesco to base their stores in China in many ways such as employee salaries as it will be much cheaper and also in 2007 Lloyds TSB pulled its call centre from China due to the fact that it proved costly failure due to the fact the high number of customers preferred speaking to staff with local knowledge therefore