The Final Assignment

7/23/2019 The Final Assignment

1/23

Benjamin Lee

Assignment 1

Business Environment

Student: Benjamin Lee

Tutor: Jewel Cole


2/23

Benjamin Lee

[LO1]

[1.1]

Identify the purposes of dierent types of organisation. Compare Tesco to other business

sectors.

Te !ur!ose o" an organisation di#ers de!ending on its organisational stru$ture% as an e&am!le% a not'"or'!ro(t organisation would ave a $om!letel) di#erent !ur!ose to a sole trader.

Sole trader:A sole trading *usiness is a legal *usiness stru$ture were one !erson as $om!lete $ontrol over owte *usiness o!erates+ sole trading *usinesses are in man) wa)s ver) similar to !artnersi!s% temajor di#eren$e *eing a sole trading *usiness as a single owner wereas !artnersi!s ave at leasttwo .Te major *ene(ts o" *eing a sole trader over oter *usiness organisational stru$tures% in!arti$ular% !artnersi!s in$ludes: retaining 1,,- o" te $om!an)s earnings% as o!!osed to a!artnersi! were te earnings are sared *etween te man) *usiness owners+ aving te "reedomto run te *usiness as )ou see (t% wi$ is in $ontrast to *ot a limited lia*ilit) $om!an) wereinvestors ave te a*ilit) to in/uen$e ow te *usiness o!erates and !artnersi!s% were ea$ o" te

*usiness owners as an e0ual sa) in ow te *usiness o!erates. Additionall)% sole trading *usinessesare easier to set u!% onl) re0uiring te sole entre!reneur to register wit 23C 42 3evenue 5Customs6 47ov.u8 and Entre!reneur% 9,,6% tis is down to te "a$t tat te) onl) re0uire a single!erson and ver) little $a!ital *e"ore te) *e$ome o!erational% in $ontra$t to a !artnersi!% wi$re0uires te $onsent o" several di#erent !eo!le *e"ore te *usiness *e$omes o!erational 4Carter6.;ue to te la& re0uirements and ease o" running te *usiness% sole trading *usinesses are "avoured*) smaller% s!e$ialist *usinesses wit lo$al ties% were te ris8 is signi($antl) redu$ed+ as o" 9,1urt 7eiger 4$loting6% EBa)4internet entre!reneur6% >in8os 4!rinting6 and Annies ome'grown 4"ood6 47ae*ler.$om6.

@artnersi!s 47eneral and Limited Lia*ilit)6:

A general !artnersi! is a legal *usiness stru$ture were two or more !eo!le own te *usiness andave $om!lete $ontrol over ow te it o!erates+ wen te *usiness is (rst initiated all !artners agree%eiter in"ormall) or "ormall) 4wit a $ontra$t6% te e&tent o" te lia*ilities and ow te $om!an)searnings will *e distri*uted *etween te !artners. A general !artnersi! as man) similarities to asole trading *usiness+ te major di#eren$e is tat a !artnersi! as multi!le !artners at te elm%instead o" onl) a single *usiness owner 4nvesto!edia6. Te advantages o" a !artnersi! over oter*usiness stru$tures% in !arti$ular% sole trading *usinesses in$lude: sared lia*ilit)% wit a !artnersi!%te ris8s and lia*ilities are sared *etween ea$ o" te *usiness owners% wereas% wit a sole atrading *usiness te lia*ilit) "alls s0uarel) on te single *usiness owner. it a !artnersi! )ou $anwor8 to )our !artners strengts and run te $om!an) in a wa) in wi$ $om!lements ever) !artnersstrengts and wea8nesses% wereas wit a sole trading *usiness )ou dont ave tat lu&ur) as its justa single entre!reneur. @artnersi!s ave ver) little government regulation and are relativel) eas) toset u!% onl) re0uiring te $onsenting *usiness owners to register wit 23C 42 3evenue 5Customs6% wereas a larger $om!an)% a !rivate limited $om!an) "or e&am!le% as a multitude o"

re0uirements *e"ore it $an *e set u!% in$luding sta8eolders% at least one dire$tor% and an address "orte $om!an) 47ov.$o.u8% 9,16. 7eneral !artnersi!s are "ree "rom investors% wi$ allow te$om!an) to *e run owever te *usiness owners see (t+ tis is one o" te major *ene(ts over*usiness stru$tures were sareolders ave a !resen$e as te) will o"ten use teir in/uen$e toim!a$t ow te *usiness o!erates 43e"eren$e"or*usiness.$om6.Limited lia*ilit) !artnersi!s sare man) similarities wit a general !artnersi! *ut $ome wit man)o" teir own advantages% wit te most !rominent advantage *eing+ limited lia*ilit)% wit a limitedlia*ilit) !artnersi!% !artners are onl) lia*le to te e&tent o" teir investment% unli8e general!artnersi!s were !artners% *etween tem% ave unlimited lia*ilit) 443esidual'rewards.$om6. Anadditional *ene(t o" limited lia*ilit) !artnersi!s is tat te) attra$t outside investment wi$ $ould!otentiall) *ring in additional $a!ital to te *usiness el!ing it e&!and% a lu&ur) general !artnersi!sdo not ave. Limited lia*ilit) !artnersi!s are not a !o!ular *usiness stru$ture% wit man) smaller*usinesses !re"erring eiter a general !artnersi! or to *e a sole trading *usiness. ;ue to te la&re0uirements *e"ore te) $an *e set u!% general !artnersi!s are "avoured *) smaller% s!e$ialist

*usinesses% some o" te more su$$ess"ul *usinesses wi$ started out as !artnersi!s in$lude: Benand Jerr)s% 2$;onalds 4restaurants6% 2i$roso"t 4so"tware6% A!!le% ewlett @a$8ard 4ardware6% 7oogle4internet entre!reneur6 and arner Broters 4ilm6 43alli @artnersi! Law% 9,1?6


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Benjamin Lee

Coo!erative:A $oo!erative is a legal *usiness stru$ture wi$ di#ers signi($antl) to most oter legal *usinessstru$tures as it is owned *) its mem*ers and not sareolders+ *e$ause o" tis% te mem*ers o" a$oo!erative are !rioritiDed a*ove $om!an) earnings.A $oo!erative is similar to a $arit) in tat te) are *ot run "or a $ommon good% a $oo!erative is runto *ene(t its mem*ers wereas a $arit) is run to *ene(t a s!e$i($ $arita*le $ause. Sta8eolders inregards to a $oo!erative in$lude: $ustomers% em!lo)ees% sareoldersinvestors and su!!liers4Business;i$tionar).$om6Te advantages o" *eing a $oo!erative are "airl) numerous and in$lude in$ludes: giving all mem*ersan e0ual sa) on ow te *usiness o!erates+ tis demo$rati$ st)le o" running te *usiness is a$ieved*) using a voting s)stem wi$ gives ever) mem*er 4indi#erent to te !osition o" said mem*er6 asingle vote wi$ te) $an use to in/uen$e $ertain *usiness de$isions% te voting rigts o"$oo!erative mem*ers e&tends to te *oard o" dire$tors% meaning% te *oard o" dire$tors will *edemo$rati$all) ele$ted witin a $oo!erative+ tis is distin$tl) di#erent "rom a !rivate or !u*li$ limited$om!an) were major de$isions are de$ided *) sareolders or te *usiness owners. urtermore%

$oo!eratives *elieve tat an) single mem*er will not *e eld res!onsi*le "or an) de*ts in$urred *)te $om!an)% regardless o" ow mu$ said mem*er as invested into te $om!an) 4unless de*t isin$urred *) a stu!id de$ision *) a s!e$i($ mem*er6% wi$ is ver) di#erent "rom a sole trading*usiness were te single *usiness owner is solel) res!onsi*le "or an) de*ts in$urred *) te *usinessor a !artnersi! were all !artners are lia*le u! to te "ormall) agreed amounts 4e**er6. Anoteradvantage o" $oo!eratives is te longevit) o" te *usiness model% $oo!eratives are !rote$ted "romdeat insolven$)% wi$ means i" te majorit) o" mem*ers eiter die or leave te $oo!erative% te$oo!erative will $ontinue to o!erate% and te onl) wa) "or a $oo!erative to *e "ormall) li0uidated is i"all mem*ers de$ided to leave simultaneousl).As mentioned !reviousl)% te most attra$tive "eature$oo!eratives o#er is tat te) are owned *) its mem*ers wi$ allows $oo!eratives to *e run "ree"rom outside in/uen$e+ as $oo!eratives are owned *) teir mem*ers it allows te earnings !rodu$ed*) te $oo!erative to *e reinvested *a$8 into te *usiness to im!rove te e&!erien$es o" all itsmem*ers 4Jonston 5 Sessoms% 9,16% wi$ is distin$tl) di#erent "rom oter *usiness stru$tures% li8e"or e&am!le% !artnersi!s were te !artners s!lit te earnings as !er te agreement or !u*li$ limited$om!anies were investors ta8e teir sare o" te earnings u! to te e&tent o" teir investment.Coo!eratives are !re"erred *) *ot *ig and small *usinesses% some e&am!les o" $oo!eratives in$lude:Te Co'o!erative 7rou! 4retail6% Fationwide Building So$iet) 4*an8ing6% 3o)al London 2utualnsuran$e So$iet) 4insuran$e6 and Britannia Building So$iet) 4$redit union6 4Fews% 9,1


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Benjamin Lee

!assing o" te Com!anies A$t o" 9,,G 4te a$t *e$ame law in 9,,H6 4Legislation.gov.u8% 9,1 5$aew.$om6% initiating a !u*li$ limited $om!an) *e$ame signi($antl) easier. Lastl)% its easier "or!u*li$ limited $om!anies to *orrow $a!ital "rom *an8s+ tis is *e$ause a !u*li$ limited $om!an) la$8ste re0uired !ermissionguarantee "rom te dire$tors tat oter *usiness stru$tures re0uire4inwe*.$om6. Some o" te =>s *iggest !u*li$ limited $om!anies in$lude: SBC oldings 4*an8ing6%Ioda"one 4tele$ommuni$ations6 and B@ 4oil6 4or*es% 9,16.

@rivate limited $om!an) 4LT;6:A !rivate limited $om!an) 4LT;6 is legal *usiness wi$ is owned *) its *usiness owners andsareolders ali8e 4Business;i$tionar).$om6% owever% unli8e a !u*li$ limited $om!an) 4@LC6% tereare restri$tions im!osed on te *u)ing and selling o" sto$8% tese restri$tions in$lude te ina*ilit) "orsareolders to sell teir sto$8 witout (rst gaining !ermission "rom te *usiness owners% se$ondl)%sto$8 is not allowed to *e sold to random $ivilians and will *e !revented "rom *eing sold via teworlds sto$8 e&$anges% lastl)% unli8e !u*li$ limited $om!anies wi$ ave no restri$tions on te

!otential amount o" sareolders% !rivate limited $om!anies are limited to ,4;i#eren$e*etween.net6. Te major advantages o" a !rivate limited $om!an) in$lude: limited lia*ilit)%due to te nature o" te legal stru$ture and mu$ li8e a !u*li$ limited $om!an)% investors and*usiness owners are onl) lia*le to te e&tent o" teir investment. Te $ontinuit) o" a !rivate limited$om!an) is almost in !er!etuit)% meaning i" te owner o" te *usiness dies wilst in o$e% te$om!an) does not die wit imer% instead one o" several out$omes $ould o$$ur% su$ as aving$lose "riends or "amil) *u) te re$entl) de$eased owners sares or an agreement in advan$e toas$ertain wom te sares will "all to 4t)!i$all) $lose "riends or "amil) o" te de$eased6. Te selling o"sares% selling sares is advantageous "or !rivate limited $om!anies% owever% unli8e !u*li$ limited$om!anies% wi$ ave no restri$tions% !rivate limited $om!anies are limited to , investors at an)given time+ te selling o" sares allows "or e&tra $a!ital to *e raised in a relativel) sort amount o"time. Lastl)% a !rivate limited is a sta*le "orm o" *usiness+ t)!i$all)% te *usiness owner $annot *eousted "or a one o# !oor !er"orman$e% as o!!osed to a !u*li$ limited $om!an) were te investorsave te !ower to !otentiall) remove te original *usiness owner i" te investors deem it ne$essar).

Additionall)% !rivate limited $ome wit man) ta& in$entives% !rivate limited $om!anies !a)$or!oration ta&% as o" 1stA!ril 9,1% $oo!eration ta& is 9,- 47ov.u86 and !rivate limited $om!aniesare also e&em!t "rom !a)ing in$ome ta&% someting wi$ smaller *usiness stru$tures su$ as!artnersi!s and sole traders are su*je$t to 4Adrian% 9,1,6. Some o" te *iggest !rivate limited$om!anies in te => in$lude: 7rosvenor 4!ro!ert) develo!ment6% 2iller 7rou! 4!ro!ert) develo!ment6and 7ladedale 4!ro!ert) develo!ment6 4Telegra!.$o.u8% 9,,K6.

Carit) and not'"or'!ro(t organisations:Carit) organisations and not'"or'!ro(t organisations are a legal *usiness stru$ture were te sole!ur!ose o" te *usiness is to *ene(t a s!e$i($ $arita*le $ause+ earnings are used to 8ee! te*usiness running and i" ne$essar)% !a) te salaries o" some em!lo)ees 4de!endent on te $arities$onstitution6 4o!e% 9,1?6% wit te majorit) o" earnings going to said $arita*le $ause 4nvesto!edia6Some o" te *ene(ts o" *eing a not'"or'!ro(t$arita*le *usiness in$lude: ta&ation% not'"or'!ro(torganisations% !rovided te) are registered wit 23C 42 3evenue 5 Customs6 re$eive var)ing

degrees o" ta& relie" wit ta&es su$ as stam! dut)% gi"t aid ta& relie" and $or!oration ta&42anagementel!.org6. An additional *ene(t o" *eing a not'"or'!ro(t is ow mu$ easier it is raise$a!ital via outside means+ normall) $a!ital is raised *) donations and grants "rom outside sour$eswi$ in$lude grants "rom te lo$al government% grants "rom non governmental institutions. Te lastmajor *ene(t o" *eing a not'"or'!ro(t is so$ial re$ognition% due to te nature o" not'"or'!ro(torganisations 4wor8ing to "urter a so$ial $ause6 $arities are well 8nown "or teir $arit) wor8 wi$$an greatl) assist in raising "unds 4>nowownon!ro(t.org% 9,16. Some o" te *iggest 4*ased on totalin$ome6 $arities in te => in$lude: Llo)ds 3egistration oundation 4!u*li$ edu$ation6% Te BritisCoun$il 4o!!ortunities $reator6% Te Arts Coun$il 4im!roving artisti$ s8ills6 and Can$er 3esear$ =>4$an$er resear$6 43ogers% 9,196.Fote

Tere e&ist tree *usiness se$tors: !rimar)% se$ondar) and tertiar). Te !rimar) se$tor $onsists o"*usinesses wi$ gater or e&tra$t raw materials and natural resour$es% te se$ondar) se$tor $onsists

o" *usinesses wi$ ta8e te natural resour$es and raw materials and ten manu"a$ture !rodu$ts "or$onsumer $onsum!tion and te tertiar) se$tor is te retail and servi$es se$tor wi$ sells te!rodu$ts manu"a$tured *) te se$ondar) se$tor to $onsumers 4nvesto!edia6. Tes$o is retail *usiness


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Benjamin Lee

wi$ sells !rodu$ts and servi$es to $onsumers *ased on $onsumer demand% meaning Tes$o *elongsto te tertiar) se$tor+ Tes$o is also a !u*li$ limited $om!an) 4@LC6% meaning Tes$os sares are!u*li$all) traded via te worlds sto$8 e&$anges% selling sares is advantageous "or an) $om!an) asit allows a $om!an) to *ring in sareolders 4!eo!le wom te $om!an) is "unded *)6 and e&tra$a!ital. As Tes$o is a !u*li$ limited $om!an) 4@LC6% te major overar$ing goal is to $ontinuall)e&!and te earnings o" sareolders 4sareolders witin a !u*li$ limited are te owners o" te*usiness6. Tes$os mission statement is Our *usiness was *uilt wit a sim!le mission M to *e te

$am!ion "or $ustomers% el!ing tem to enjo) a *etter 0ualit) o" li"e and an easier wa) o" living. Tisasnt $anged. Customers want great !rodu$ts at great value wi$ te) $an *u) easil) and its ourjo* to deliver tis in te rigt wa) "or temN 4Tes$o @LC6. >elloggs di#erentiates itsel" "rom Tes$o as>elloggs is a *usiness wi$ is instead situated in te se$ondar) se$tor% tis means >elloggs!ur$ases raw materials 4$orn% weat% ri$e% oats% !otatoes% sugar *eets and $ane% $o$oa% !alm oil%"ruits and one).6 4Ceeseman% 9,1elloggs mission statement isB) *eing mind"ul and $ommitted to tese ideals% we u!old our "ounders dedi$ation to !eo!le andteir well'*eing. And we !romote an environment were we $an !us *e)ond *oundaries and a$ross*orders to $reate "oods and *rands tat el! to "uel te *est in ever)one ever)wereN4>ellogg$om!an).$om6.

Benjamin Lee

Tes$o as several long term goals outside o" in$reasing te earnings "or its sareolders% o" !arti$ularim!ortan$e and !artl) due to te "a$t tat Tes$o is te largest retailer in te =>% is te im!a$t Tes$oas on te environment% "or e&am!le: Tes$o as an environmental goal wi$ is to de$rease teim!a$t Tes$o as on te environment% Tes$o intends to redu$e its $ar*on "oot!rint *) ?,- *) 9,9,and intends to a$ieve tis *) wor8ing $losel) wit its su!!liers% additionall) Tes$o as severalwor8so!s lo$ated around te =nited >ingdom were Tes$o $an edu$ate its su!!liers *) in"ormingtem o" teir !lans to redu$e $ar*on emissions 4Tes$o @LC6% as an e&am!le o" te $ommitment o"Tes$o% Tes$o o!ened its (rst $ar*on "ree store in 3amse) in 9,1,% wi$ $ost Tes$o signi($antl) morewen $om!ared to a standard store 4in$% 9,1,6. Anoter goal o" Tes$o is to signi($antl) redu$e te

amount o" "ood wi$ is wasted *) te $om!an)+ tis is *e$ause "ood waste $osts Tes$o greatl) ea$)ear% Tes$o intends to a$ieve tis *) ordering less sur!lus "ood% giving le"tover "ood to $arities 4viate "ood donation !rograms wi$ Tes$o as initiated6 and turn e&$ess "ood into animal "eed+ teoverar$ing o*je$tive o" Tes$os "ood waste goal is to lessen te im!a$t tat "ood waste as on teenvironment and Tes$os earnings% additionall)% te goal o" Tes$os "ood waste !oli$) is to also assist$arita*le organisations *) giving $arities te e&$ess "ood 4Tes$o @LC6. 2u$ li8e Tes$o% >elloggsalso as a long term goal "or its $om!an) outside o" in$reasing earnings "or its sareolders+ >elloggs9,9, sustaina*ilit) !lan% wi$ involves !ur$asing all $orn% weat% ri$e% oats% !otatoes% sugar *eetsand $ane% $o$oa% !alm oil% "ruits and one) "rom re!uta*le $erti(ed sour$es% >elloggs intends toa$ieve tis *) !ur$asing onl) "rom >elloggs $erti(ed organisations% organisations wi$ must *eenvironmentall) a!!ro!riate% so$iall) *ene($ial and e$onomi$all) via*le+ te overar$ing aim o" tesustaina*ilit) !lan is to ma8e agri$ulture more sustaina*le% doing tis will *ene(t *ot >elloggs andte wor8ers in te !rimar) se$tor 4>elloggs.$o.u86. Bot Tes$o and >elloggs ave a series o" maino*je$tives wi$ are numerous and varied+ o*je$tives are di#erent "rom goals in tat o*je$tives are

goals wi$ are realisti$all) a$ieva*le in a sorter s!a$e o" time% Tes$os o*je$tives in$lude: meetingte needs o" its ever $anging $ustomer *ase% im!roving relations wit all o" its su!!liers% assistingte => government on !oli$ies wi$ as$ertain to te "ood industr) and im!roving te s8ills ande&!ertise o" its wor8 "or$e troug a series o" varied training !rograms 4Tes$o.$om6% wereas te maino*je$tives o" >elloggs in$lude edu$ating te !o!ula$e a*out a *alan$ed diet and !romoting ealt)eating% sustaina*le growt wit redu$tions in te environmental "oot!rint and using more re$)$la*le!a$8aging wit >elloggs !rodu$ts 4see sustaina*ilit) goal 9,9,6 e&!and into more regions *)im!roving !rodu$t innovation and im!roving *rand re$ognition and lastl)% im!rove te wor8ingenvironment "or em!lo)ees *) im!roving te levels o" ealt and sa"et) at >elloggs to ma8e suresu!!liers o#er te same levels o" !rote$tion tat >elloggs does to its own em!lo)ees4Sites.$dnis.edu.86

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[1.9]

;es$ri*e te e&tent to wi$ Tes$os meets te o*je$tives o" its di#erent sta8eolders

;i#erent sta8eolders ave di#erent e&!e$tations and longer term goals% tese sta8e olders and teire&!e$tations in$lude:

Customers M Tes$os $ustomers e&!e$t Tes$os em!lo)ees to *e 8nowledgea*le a*out te !rodu$ts tatte)re selling% $ustomers e&!e$t a 0ui$8% "riendl) and onest servi$e. Customers also e&!e$t tere to *e awide range o" !rodu$ts wit a wide range o" !ri$es. Tes$os intera$ts wit $ustomers "a$e to "a$e so te)$an dis$uss an) issues te) ma) ave% tese meetings are $alled $ustomer 0uestion times% additionall)%Tes$os uses an anon)mous $ustomer "eed*a$8 "orum% te "eed*a$8 "rom $ustomers% eiter "rom te CTor te anon)mous $ustomer "eed*a$8 "orm is used to im!rove $ustomers so!!ing e&!erien$es witTes$os.

Em!lo)ees M Tes$os em!lo)ees e&!e$t e0ual treatment and "air terms and $onditions% te a*ilit) toadvan$e troug te $om!an) and to wor8 in a sa"e and se$ure environment. Tes$os regularl) $ondu$ts ananon)mous view!oint surve) to gater te o!inions o" its wor8"or$e% tis $ould in$lude an)ting "rom jo*se$urit) to !a) and *ene(ts to su!!ort during ard times.

Su!!liers M Tes$os su!!liers e&!e$t to ave te a*ilit) to gain a long term relationsi! wit Tes$os% to *e

!aid on time and to *e treated wit res!e$t regardless o" were te) wor8 in te su!!l) $ain% all Tes$ossu!!lies ta8e !art in a su!!lier view!oint were an) o" Tes$os su!!lies $an *ring u! an) $on$erns tatte) ave wit Tes$os.

7overnment M Te government e&!e$ts tat Tes$os is $om!liant wit all government legalities andregulations% $ontinuous jo* o!!ortunities "or te !u*li$ wit ta&es !aid in on time% eti$al tradingstandards% and "air treatment "or all. Tes$os will regularl) meet wit governmental organisations so te)$an dis$uss issues te) government ma) ave and Tes$os 8ee!s u! to date wit all relevant laws andlegislation.

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[1.?]

E&!lain te res!onsi*ilities o" an organisation su$ as Tes$os and strategies te) ave to meet tem

at are te res!onsi*ilities o" Tes$os and similar organisationsP

Legal res!onsi*ilities M Tes$os legal res!onsi*ilities are to a*ide *) te law o" te land *e$ause all legalres!onsi*ilities are di$tated to Tes$os *) te Euro!ean =nion 4"or e&am!le% te La*our Law6% te =nited>ingdom government 4"or e&am!le% te Bri*er) A$t o" 9,1,9,116% and te =nited Fations 4"or e&am!le%te 7lo*al Com!a$t @rin$i!le 1,6 oter laws and legislation in$lude:

Te Fational minimum wage M te national minimum wage was introdu$ed into te =nited >ingdom in1HHK wit te Fation 2inimum age A$t o" 1HHK% te a$t ensures all wor8ers are entitled to a minimumwage regardless o" te wor8 te) are doing.

@ensions M ntrodu$ed wit te @ensions A$t o" 9,1 is te introdu$tion o" automati$ enrolment% tis means

tat all em!lo)ers must automati$all) enrol em!lo)ees i" te) meet te set $riteria% te $riteria in$ludes*eing over te age o" 99 and earning more tan Q1,%,,,.

;is$rimination in te wor8!la$e M ;is$rimination in te wor8!la$e is !revented *) Te E0ualit) A$t o" 9,1,wi$ merged all te !revious anti dis$rimination a$ts into one single !ie$e o" legislation. t was introdu$edinto te =nited >ingdom to ma8e sure all em!lo)ees% regardless o" jo* role% gender% se&ualit) or ra$e are to*e treated e0uall) witin te wor8!la$e and tat te wor8!la$e remains arassment "ree.

Contra$ts o" em!lo)ment M it te Em!lo)ment 3igts A$t o" 1HHG all em!lo)ers are o*liged to o#er$urrent em!lo)ees wom are loo8ing to e&tend teir $ontra$t wit teir em!lo)er and !otential em!lo)eesto a $ontra$t wit guaranteed ours.

ealt and Sa"et) M Te ealt and Sa"et) at or8 A$t o" 1HR< !rovides all em!lo)ees a sa"e !la$e to wor8%ensures all !otentiall) dangerous e0ui!ment and materials are $orre$tl) used and sa"el) stored% ne$essar)

sa"et) e0ui!ment% !rovide a written sa"et) assessment and to !rovide !ro!er training and su!ervision andma8e sure sta# are aware o" instru$tions !rovided *) te e0ui!ment manu"a$tures.


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Consumer @rote$tion M Consumers in te =nited >ingdom are !rote$ted *) te Sales o" 7oods A$t 1HRH%tis a$t gives $onsumers several rigts% tese in$lude ave te rigt to get wat )ou !a) "or% te rigt toave an) "ault re!aired "ree o" $arge or o#ered a "ull re"und and te rigt to get wat )ou !a) "or.

Environmental laws M Te environment is !rote$ted *) laws and regulations tat organisations ave toadere to% tese regulations $over: te !a$8aging $om!anies use% ow and wat te $om!an) is re$)$ling%energ) e$ien$) and te "a$tor) emissions. All tese regulations are set eiter *) te =nited >ingdom

government or te Euro!ean =nion.

So$ial and eti$al res!onsi*ilities M Tes$os so$ial and eti$al res!onsi*ilities in$lude:

air and eti$al trading M Tes$os as !arti$i!ated in te eti$al trading initiative sin$e 1HHK. Te eti$altrading imitative is *ased on "our !rin$i!les:

2onitoring M 2a8ing sure all wor8ers are treated "airl) and e0uall) trougout te su!!l) $ain and ma8ingsure all teir needs are met. 9. m!rovement M m!roving an) o" te issues tat ave arose wit an) o"Tes$os su!!liers and (&ing tem. ?. Trans!aren$) M aving an o!en and onest relationsi! wit allsu!!liers. ingdomgovernment and Euro!ean =nion legislation% to do tis% Tes$os wor8s ver) $losel) wit all te

governments o" te $ountries o" wi$ te) o!erate in.

So$ial and eti$al res!onsi*ilities:

To meet its so$ial and eti$al res!onsi*ilities Tes$os urges all its su!!liers to ave te samevalues as te values des$ri*ed in Tes$os own eti$al trading initiative 4"air !a)% "air treatment%gender e0ualit)% sa"e wor8ing environment6% also% "or an) issue tat $ant *e solved *) tesu!!lier% Tes$os will o#er assistan$e to ensure te issue is resolved. Tes$os also as its own$arit) trust 4Tes$os Carit) Trust6 wi$ rewards organisations and !eo!le "or $ontri*uting!ositivel) to so$iet)% Tes$os wor8s $losel) wit te $ommunities in wi$ o!erate in% Tes$os as!la$es "or $ustomers to donate mone) in ever) single store% and will give a 9,- to!'u! to on "or aTes$os em!lo)ees !ersonal "undraising% tis allowed Tes$os to meet its so$ial and eti$alres!onsi*ilities.

@ro"essional res!onsi*ilities:

To meet its !ro"essional res!onsi*ilities% Tes$os ma8es sure all its stores are $lean and sa"e "or*ot te em!lo)ees and $ustomers. Tes$os ma8es sure tat a $ustomers so!!ing e&!erien$e isse$ond to none *) training em!lo)ees on ow to deal wit $ustomers and ma8ing sure allem!lo)ees are 8nowledgea*le a*out te !rodu$ts tat te) are selling.

Fote

[LO9]

[9.1]

E&!lain ow e$onomi$ s)stems attem!t to allo$ate resour$es e#e$tivel)


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An e$onomi$ s)stem is wen te government attem!ts to meet teir $itiDens needs troug te!rodu$tion and distri*ution o" goods and servi$es% all servi$es and !rodu$ts !rodu$ed *) te$ountr) are limited *) te resour$es 4$a!ital% land% la*our wor8"or$e% natural resour$es6 o" te$ountr)% tis means te government needs to tin8 $are"ull) a*out ow to !rioritiDe te needs andwants o" its $itiDens.

at are te e$onomi$ t)!es around toda) and ow does ea$ e$onomi$ t)!e distri*ute resour$es

e#e$tivel):

2i&ed e$onom) M at is a mi&ed e$onom)P A mi&ed e$onom) is an e$onomi$ t)!e wi$ $om*ines*ot te so$ialist and $a!italist s)stems% !art o" te e$onom) is run *) te government wilst teoter !art is le"t "or te "ree mar8et 4!rivate *usiness organisations6% !rivate *usiness organisationsave uge amounts o" "reedom in tis e$onomi$ t)!e% owever% te government $an intervene wit(s$al and monetar) !oli$ies i" te e$onom) re0uires su$ a move. ow does a missed e$onom)allo$ate resour$es e#e$tivel)P A mi&ed e$onom) $an e#e$tivel) allo$ate te $ountries resour$es as teresour$es are s!lit *etween te !rivate se$tor 4su!er mar8ets% "or e&am!le6% and te !u*li$ se$tor4de"en$e% "or e&am!le6 were resour$es are allo$ated *) te government% several se$tors witin temi&ed e$onom) t)!e ave resour$es allo$ated *) te !rivate se$tor and te !u*li$ se$tor 4ealt% "ore&am!le6. Tis allows all te nations resour$es to *e allo$ated e#e$tivel) and wit ver) little wasted.Tis e$onomi$ t)!e is te most !o!ular in te world wit $ountries li8e te =>% ran$e% Sweden%inland% =nited States% and Canada using it

Command e$onom) M at is a $ommand e$onom)P A $ommand e$onom) is an e$onomi$ t)!e werete government de$ides wat needs to *e made% ow man) need !rodu$ing and ow mu$ said!rodu$ts sould $ost+ in most $ommand e$onomies te "ree mar8et doesnt e&ist 4some $ommande$onomies are starting to o!en u! e$onomi$all)% Cina "or e&am!le6 as tis would loosen tegovernments gri! on te e$onom)% tis means tat all !rivate *usiness organisations o!erating witina $ommand e$onom) are eavil) in/uen$ed *) te government% sometimes te government will eventa8e ownersi! o" a !rivate organisation i" te organisation isnt doing wat te government wants%te government as $om!lete $ontrol over te e$onom). ow does a $ommand e$onom) e#e$tivel)allo$ate resour$esP Te $ommand e$onom) $an e#e$tivel) allo$ate resour$es *e$ause tegovernment as $om!lete $ontrol over te $ountries $itiDens and te $ountr)s e$onom) and as allte su$ient in"ormation it needs to *e a*le to e#e$tivel) allo$ate its $ountries resour$es. Te$ommand e$onom) is not a !o!ular e$onomi$ t)!e *e$ause te government ma) not ave all terelevant in"ormation wi$ $an lead to sortages o" $ertain resour$es wi$ will lead to millions o"

!eo!le d)ing. Te $ountries wi$ use tis e$onomi$ s)stem are Cu*a% Fort >orea% and mostin"amousl) te "ormer Soviet =nion. Cina and Iietnam also use tis e$onomi$ t)!e *ut are *e$omingmore o!en.

4ree6 2ar8et e$onom) M at is a "ree mar8et e$onom)P A "ree mar8et e$onom) is an e$onomi$s)stem were te government as ver) little !ower and government regulation in a "ree mar8ete$onom) is 4almost6 none&istent. ow do "ree mar8et e$onomies e#e$tivel) allo$ate resour$esP ;ue tola$8 o" government inter"eren$e and regulations and te $om!lete e$onomi$ "reedom "or !rivate*usiness organisations $om!anies $an !rodu$e e&a$tl) wat te) need% teir need is determined *)wat $onsumers want and ow mu$ $onsumers are willing to !a). A mar8et e$onom) is a*le toe#e$tivel) allo$ate te nations re$ourses *) allowing te mar8et to determine wat needs to *e!rodu$ed% ow man) need !rodu$ing and ow mu$ te !rodu$ts $ost. All $ountries in te world avesome elements o" a "ree mar8et e$onom)% $ountries wit more "ree mar8et in/uen$es in$lude te =>%=SA and ran$e 4mi&ed e$onom)6 and some $ountries ave less "ree mar8et in/uen$e in$lude Cina

and Iietnam 4$ommand e$onomies6

Traditional e$onom) M at is a traditional e$onom)P A traditional e$onom) is an e$onomi$ s)stemwi$ relies on traditional $ustoms and *elie"s wen dealing wit te $itiDens *eing served% tese$ustoms and *elie"s di$tate wat needs to *e !rodu$ed and ow mu$ te !rodu$e *eing !rodu$edsould $ost+ agri$ultural $ountries use te traditional e$onom) s)stem. ow does a traditionale$onom) e#e$tivel) allo$ate resour$esP A traditional e$onom) $an e#e$tivel) allo$ate re$ourses*e$ause te resour$es are allo$ated *ased on te traditions and $ustoms o" te !eo!le *eing served. tis used *) several di#erent tri*es around te world% in$luding te nuit 4Es8imo6 !eo!le in te norternmost regions o" Canada.

Fote

[9.9]

Assess the impact of scal and monetary policy on dierent businesses and their activities.

at are te (s$al and monetar) !oli$iesP A $entral governments (s$al !oli$) en$om!asses te


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governments !osition on government s!ending and te overall levels o" ta&ation% *ot "or *usinessand $itiDen ali8e. Te !oli$ies o*je$tive is to stimulate aggregate demand and *) e&tension e$onomi$a$tivit). is$al !oli$ies $an in$lude: in$reasing ta&es and in$reasing government s!ending or in$reasingta&es and de$reasing government s!ending as means to stimulate e$onomi$ growt and to lowerin/ation 4BBC Fews% 9,16. Tere e&ists two t)!es o" (s$al !oli$)% e&!ansionar) and de/ationar)+e&!ansionar) (s$al !oli$) sets out to in$rease aggregate demand% it a$ieves tis *) $utting ta&es4giving $onsumers more dis!osa*le in$ome6 and in$reasing government e&!enditure% te e&tra

e&!enditure is "unded via *orrowing. it a de/ationar) (s$al !oli$) te government intends tode$rease aggregate demand% it a$ieves tis *) $utting government s!ending and wit ta& in$reases4giving $onsumers less dis!osa*le in$ome6 4ontinelle% 9,,?6

2onetar) !oli$ies are set *) te $entral *an8% in te => tat would *e te BoE 4Ban8 o" England6% te$entral *an8 $anges interest rates as a means to $om*at in/ation rates% "or e&am!le% i" te $entral*an8 wants to lower in/ation rates 4BoE in/ation target is 9- 4Ban8o"england.$o.u86% te $entral *an8will in$rease interest rates in order to 8ee! in/ation rates low% te a"orementioned !oli$ies lead tolower in/ation rates *e$ause iger interest rates de$rease $onsumer s!ending and *orrowing*e$omes more e&!ensive 4nvesto!edia6. Two t)!es o" monetar) !oli$) e&ist% loose monetar) !oli$)and tigt monetar) !oli$). Loose monetar) !oli$) en$om!asses $utting interest rates+ doing so willlead to $ea!er *orrowing and in$reased $onsumer s!ending 4more dis!osa*le in$ome "or $onsumerswit mortgages6. it tigt monetar) !oli$)% te $entral *an8 will in$rease interest rates as means toslow down e$onomi$ growt and !revent in/ation e&$eeding te 9- target set *) te BoE

4E$onomi$sel!.org6. ow *usinesses a$t de!ends entirel) on te (s$al and monetar) !oli$ies o" tegovernment and te mi$roe$onomi$ s)stems o" te $entral *an8 4BoE6. or e&am!le% wen tegovernments monetar) !oli$) $auses te interest rates to surge% *usinesses su$ as Tes$o $ould "a$edi$ulties (nan$ing its o!erations as te $ost o" $a!ital will in$rease% wi$ will in turn lead to teoverall $onsum!tion level o" $onsumers de$reasing% alternativel)% i" te governments monetar) !oli$)de$rease te interest rates it will ave te reverse e#e$t 4less e&!ensive to o!erate a *usiness andmore $onsumer $onsum!tion6 in 9,1,% te nde!endent re!orted on ow "ood in/ation $an ave adisastrous im!a$t on retailers su$ as Tes$o 4L)n$% 9,1,6. Additionall)% i" te government was toin$rease te ta& *urden% Tes$o would ave more o" its !ro(ts ta&ed% meaning it will ave less $a!ital toe&!and te *usiness wit 4less em!lo)ees ired% less su!ermar8ets o!ened6% as a means to ma8e u!"or te in$reased ta&es% $om!anies $ould in$rease te $ost "or $onsumers. owever% i" te ta& *urdenis redu$ed% te end results $an onl) *e !ositive "or $om!anies li8e Tes$o 4and $onsumers ali8e6% as lessta&es means more dis!osa*le $a!ital% said $a!ital will *e used to e&!and te *usiness 4ire moreem!lo)ees% *uild more su!ermar8ets6 and 8ee! !ri$es low "or $onsumers. Te $entral *an8s reservere0uirement $an a#e$t *usinesses% "or e&am!le% i" te governments monetar) !oli$) is to $ut tereserve re0uirement% ten in/ation rates will dro! and $onsumers will *e more willing to s!end%owever% i" te $entral *an8s reserve re0uirement remains% in/ation rates will in$rease% leading to$ustomers *eing less li8el) to s!end teir dis!osa*le in$ome. 3euters re!orted tat Cina on 9RtJune9,1 $ut its reserve re0uirement "or te ("t time "or Cinas $entral *an8 in an attem!t to sto! tedowntrend o" e$onomi$ growt *) lowering in/ation rates 4eat% 9,16. E&$ange rates $an greatl)a#e$t a *usiness% *ot in good and *ad wa)s.

Curren$) a!!re$iation 4wen te $urren$) strengtens against "oreign $urren$ies% !arti$ularl) te =S;6means tat e&!orting goods overseas *e$omes signi($antl) more e&!ensive% tis is *e$ause te !ri$eo" => !rodu$ts will now *e more e&!ensive to !eo!le elsewere in te world% wi$ means "oreign*usinesses need to !a) more to im!ort !rodu$ts "rom => *usinesses% tis naturall) leads to => e&!orts*eing less desira*le and due to te iger $ost o" e&!orting and lower $ost o" im!orting !rodu$ts intote =>% te overall e$onom) is li8el) to srin8 *e$ause o" te "all in domesti$ aggregate demand.

Curren$) de!re$iation 4wen a $urren$) wea8ens against "oreign $urren$)% !arti$ularl) te =S;6e&!orts *e$ome signi($antl) $ea!er% tis is *e$ause "oreign $om!anies $an im!ort => !rodu$ts "or aredu$ed !ri$e% ma8ing => e&!orts more $om!etitive in te !ro$ess% anoter $onse0uen$e o" $urren$)de!re$iation is tat im!orts to te => are now more e&!ensive% tis is *e$ause te 7B@ as devaluedand is not wort as mu$ as it used to *e wen $om!ared to "oreign $urren$ies% lastl)% te overalle$onom) is li8el) to grow wit a devalued $urren$) due to an in$rease in domesti$ aggregate demand%"or e&am!le% te Cinese government in an attem!t to 8ee! in/ation low and em!lo)ment ig%devalued its $urren$) "or te si&t time in 9,1 4rwin% 9,16.Fote[9.?]

Evaluate te im!a$t o" $om!etition !oli$) and oter regulator) me$anisms on te a$tivities o" Tes$os

Business $om!etition in te =nited >ingdom is regulated *) te 1HHK Com!etition A$t% Enter!rise Bill

9,,9% tese a$ts are used *) te government to !revent mono!olies andor redu$e teir !ower andin/uen$e in te mar8et+ te O$e o" air Trading and Com!etition Commission are also used *) te =>7overnment to el! regulate te mar8ets. Com!etition !oli$) !revents *usinesses "rom disru!ting te


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mar8et *alan$e% see8s to guarantee tat te mar8et remains "ree and "air "or all *usinesses regardlesso" weter te) are *ig or small and su!!orts innovation witin te mar8et wi$ will el! $reate jo*sand e$onomi$ growt. Com!etition laws also !revent *usinesses "rom "orming a $onglomeration% an)merges wi$ would give an organisation an un"air advantage over te $om!etition% attem!ting to$ontrol !ri$es!ri$e (&ing wit a $om!etitor and $reating an arti($ial sortage o" su!!lies as anattem!t to in$rease te !ri$e "or wolesale and retail.

Te Com!etition Commission dis$overed tat *igger retailers% su$ as Tes$os% AS;A% Sains*ur)s and2orrisons% ma8e it signi($antl) arder "or smaller retailers to o!erate in te same area o" wi$ te*igger retailers are o!erating in% tis led to te Com!etition Commission advising te =nited >ingdomgovernment on ow to !revent tis "rom a!!ening. Te Com!etition Test ensures tat Tes$os andoter *ig retailers $ant $om!letel) $ontrol a $ertain region+ tis is done *) !reventing Tes$os andoter *ig retailers "rom o!ening a store witin a 1, minute drive o" anoter 4tis onl) a!!lies i" Tes$osas at least G,- o" te mar8et sare in tat s!e$i($ region6

3etail organisations o!erating in te Euro!ean =nion also need to a*ide *) Euro!ean =nionregulations. An) $anges in te laws or regulations will a#e$t Tes$os% "or e&am!le% i" te =nited>ingdom government or te Euro!ean =nion de$reases te ma&imum ours a wor8er $an wor8% tiswould ave a negative im!a$t on Tes$os o!erations and !ro(t margins as Tes$os would ave to

em!lo) more !eo!le% or i" te =nited >ingdom government in$reased te minimum wage to a livingwage% Tes$os !ro(t margins would ta8e a it due to needing to !a) wor8ers iger wages. " Tes$os oran) oter organisation in te => or E= *rea8s te laws set *) te 1HHK Com!etition A$t% Enter!rise Billo" 9,,9 and an) o" te E= laws and regulation te) $ould "a$e severe san$tions% (nes and all merges*ro8en u! along wit $ourt "ees.

ave "air $om!etition !oli$ies and government regulations *een good "or Tes$osP A "air and$om!etitive retail mar8et !la$e as *een in$redi*l) advantageous and *ene($ial to not onl) Tes$osand oter similarl) siDed retailers *ut to $onsumers as well. Com!etition el!s s!ur innovation in watwould ave oterwise *een a stagnant mar8et !la$e i" Tes$os was te onl) major retailer in te$ountr)% owever% i" )ou ave man) major retailers all $om!eting against ea$ oter "or te same $oremar8et% innovation *e$omes a ne$essit) as te retailers ave to innovate to sta) aead o" teir$om!etitors% as an e&am!le% Tes$os was te (rst retailer in te =nited >ingdom to introdu$e lo)alt)$ards and Tes$os !ioneered internet so!!ing wit ome deliveries% two innovations wi$ were

universall) ado!ted *) te oter major retailers.

nnovation leads to more e$ien$) and lower !ri$es% tis means tat Tes$os ma) lose mone) in tesort term *ut tis sort term down"all in !ro(t will *e more tan made u! "or in te long term aslower !ri$es attra$t more $ustomers% wi$ leads to Tes$os $ontrolling a mu$ larger !er$entage o"te overall mar8et sare. Customer servi$e is also a#e$ted *) $om!etition as all te major retailerssee8 to outdo teir $om!etition% Tes$os alwa)s aims to !rovide a mu$ *etter $ustomer servi$e tante $om!etition% tis in turns $reates lo)al and returning $ustomers% lo)al $ustomers are $onsidered to*e te most im!ortant t)!e o" $ustomer. Te a"orementioned reasons are w) Tes$os% as o" 2ar$9,1 $ontrols 9K.1- o" te $urrent => mar8et sare% signi($antl) iger tan te $om!etition+ a "air$om!etitive mar8et !la$e as made Tes$os te mar8et leader in te =nited >ingdom.

[LO?]

[?.1]

ow mar8et stru$tures determine te !ri$ing and out!ut de$isions o" *usinesses

Tere are several di#erent mar8et stru$tures% all wit var)ing degrees o" $om!etiveness. Te mar8etstru$tures in$lude 2ono!ol) 4no $om!etition6% Oligo!ol) 4little $om!etition6% 2ono!olisti$ Com!etition4uge amounts o" $om!etition6 and @er"e$t Com!etition 4uge amounts o" $om!etition6+ *usinessstrategies wi$ in$lude te !ri$ing o" !rodu$ts and te out!ut !riorities are determined *ased on temar8et stru$ture.

ow do te a"orementioned mar8et stru$tures a#e$t te !ri$ing and out!ut de$isions o" *usinessesP

2ono!ol) M A 2ono!ol) mar8et stru$ture is were a single *usiness as $om!lete $ontrol over temar8et% leading to !otential and $urrent $om!etitors *eing una*le to enter te mar8et or *eing drivenout o" te mar8et% res!e$tivel). Tis means tat te *usiness $ontrolling te mar8et will never avean) $om!etition at all. aving no $om!etition means te *usiness is "ree to set te !ri$e to owevermu$ te *usiness sees (t% normall) te mar8 u!s are insanel) ig as te *usiness would want to


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ma&imise !ro(t margins% *usinesses are a*le to do tis *e$ause $ustomers ave nowere else to *u)te !rodu$ts wi$ are *eing !rodu$ed% tis means $ustomers are "or$ed to !a) te !ri$e set *) te*usiness. A 2ono!ol)s out!ut de!ends on $onsumer demand% i" $onsumers are interested in!ur$asing !rodu$ts "rom said *usiness ten te *usiness will out!ut at "ull $a!a$it) to meet tedemand% owever% out!ut $a!a$it) is lowered i" tere is less demand "rom $onsumers.

Oligo!ol) M An Oligo!ol) mar8et stru$ture is were more tan two large *usinesses $ontrol te mar8et%

ma8ing it in$redi*l) di$ult% *ut not im!ossi*le 4li8e wit a 2ono!ol)6 "or !otential $om!etitors toenter te mar8et. All *usinesses witin an Oligo!ol) will *e selling te same or ver) similar !rodu$ts.Businesses !resent witin an Oligo!ol) will set an going rate "or teir !rodu$ts% wi$ will *e mat$ed*) teir $om!etitors% doing tis removes te in$entive "or $onsumers to give !re"eren$e to a *usiness$om!etitor% owever% a"ter te initial !ri$ing% te *usinesses will let $onsumer demand di$tate te"uture !ri$es% more demand means te !ri$e will eiter stagnate or in$rease% "urtermore% *usinesseswill de$rease te !ri$e o" teir !rodu$ts wen manu"a$turing !ri$es de$rease andor $onsumerdemand de$reases% meanwile% !ri$es will in$rease or de$rease de!ending on te $om!etitors !ri$ingstrateg)% i" te $om!etition lowers teir !ri$es% te oter *usinesses will need to do as well% oterwisete) will lose a signi($ant !er$entage o" teir mar8et sare. Out!ut de$isions are de$ided on *)$onsumer demand% more demand means iger out!ut $a!a$it)% less demand means lower out!ut$a!a$it).

;uo!ol) 4Oligo!ol)6 M A ;uo!ol) is anoter "orm o" Oligo!ol)% a ;uo!ol) is instead two *usinesses

4instead o" more tan two6 wi$ ave $om!lete $ontrol over te mar8et% ma8ing it ver) di$ult 4*utnot im!ossi*le6 "or !otential $om!etitors to enter te mar8et. n ;uo!olies te !rodu$ts *eing!rodu$ed *) *ot $om!anies will *e ver) similar% o"ten wit onl) minor di#eren$es. @ri$ing is di$tated*) te *usinesses as one o" te *usinesses will set a going rate "or teir !rodu$ts% te going rate will*e mat$ed *) te oter *usiness. Te *usinesses will ten let te $onsumer demand di$tate "uture!ri$es% meaning i" tere is a large demand "or te !rodu$ts ten te !ri$e will eiter stagnate orin$rease or i" one o" te two *usinesses lowers te !ri$e o" teir !rodu$t% te oter $om!eting *usinesswill ave to lower teir !ri$e as well in order to remain $om!etitive and to !revent an) loss o" mar8etsare% "urtermore% i" te !ri$e to manu"a$ture te !rodu$ts de$reases so too will te !ri$e $onsumers!a). Out!ut de$isions in a ;uo!ol) are *ased on $onsumer demand% more demand "or a !rodu$tmeans te $om!anies out!ut in$reases and i" te demand lessens te $om!an) out!ut de$reases.

@er"e$t Com!etition M A @er"e$t Com!etition mar8et stru$ture is wen teres man) $om!etitors witinte mar8et all selling te same !rodu$ts% !otential $om!etitors $an easil) enter a @er"e$t Com!etition

mar8et. Businesses !ri$e teir !rodu$ts *ased on $onsumer demand% out!ut de$isions are also de$idedsolel) *) $onsumer demand.

2ono!olisti$ 4im!er"e$t6 $om!etition M A 2ono!olisti$ 4im!er"e$t6 $om!etition is a mar8et stru$turewere man) $om!etitors are !resent and !otential $om!etitors ave an in$redi*l) eas) time enteringte mar8et. Te 2ono!olisti$ mar8et stru$ture sares similarities wit *ot te 2ono!ol) and @er"e$tCom!etition mar8et stru$tures. Te !rodu$ts sold in tis mar8et stru$ture are di#erentiated to var)ingdegrees% *ut all !rodu$ts !rodu$ed witin te mar8et are inter$angea*le wit ea$ oter% tis means!ri$es in a 2ono!olisti$ mar8et are determined *) wat $om!etitors ave !ri$ed teir !rodu$ts at% as$onsumers will swit$ to *u)ing !rodu$ts "rom anoter *usiness wen te) see tat te) $an *u) asimilar !rodu$t "or a $ea!er !ri$e% and te manu"a$turing $osts ave an im!a$t on te !ri$es%out!ut de$isions are *ased u!on $onsumer demand

Fote

[?.9]

llustrate te wa) in wi$ mar8et "or$es sa!e organisational res!onses using a range o" e&am!les

2ar8et "or$es are "a$tors wi$ a#e$t te su!!l) and demand o" "ree mar8et e$onomies+ it isinerentl) im!ortant "or *usinesses to understand te mar8et "or$es o" a !arti$ular mar8et in order tosta) aead o" an) and all $om!etitors as tis will allow *) *usinesses to (nd a !ri$e tat $onsumersare willing to !a).

2ar8et "or$es in$lude:

Customers M Customers are vitall) im!ortant to ea$ and ever) *usiness as $ustomers are te solereason w) ea$ "or !ro(t organisation justi(es its e&isten$e. t is ver) im!ortant "or a *usiness to8ee! in $lose $onta$t wit its $onsumer *ase% "or e&am!le% i" a *usiness wi$ is !rodu$ing !ersonal$om!uters% ta*lets and !ones% as tese gadgets are $ontinuall) $anging and evolving% its $ru$ial tounderstand wat te $ustomers want% i" te *usiness sel" rigteousl) de$ides tat it 8nows *est ten


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te $onsumers will ma8e teir !ur$ases at a di#erent retailer% wi$ will $ause te *usiness to loselo)al $ustomers and mar8et sare.

Su!!l) and ;emand M en tere is an overa*undan$e o" a !arti$ular !rodu$t in a mar8et% tedemand "or tat !rodu$t will naturall) de$rease% owever% i" te su!!l) o" a !arti$ular !rodu$tde$reases ten te demand "or it will in$rease. An organisation will res!ond to eiter an oversu!!l) oran undersu!!l) *) $anging its !rodu$tion to mat$ te demand o" te mar8et% wi$ means i" te

organisation is oversu!!l)ing te mar8et ten te organisation will de$rease te amount it !rodu$es%owever% i" te organisation is undersu!!l)ing te mar8et te organisation will in$rease its !rodu$tiono" tat !arti$ular !rodu$t.;emand is te amount o" !rodu$ts andor servi$es re0uired to satis") te mar8et needs. ;emand "or a*usinesss !rodu$ts andor servi$es will eiter de$rease or in$rease% *usinesses will res!onda!!ro!riatel). Business !ro(ts !lummet wen demand "or teir !rodu$ts andor servi$es de$reases%meaning% *usinesses need to res!ond to de$reased demand "or teir !rodu$ts *) lowering te out!ut$a!a$it)% (ring unne$essar) wor8ers and $losing down redundant "a$tories. " demand "or a *usinesss!rodu$t andor servi$es in$reases ten te res!onse is to ire more wor8ers% o!en more "a$tories andin$rease te overall out!ut $a!a$it) o" te *usiness to meet te demand "rom $onsumers.

Em!lo)ees M Em!lo)ees are te !eo!le wo wor8 "or te *usiness% te) are vitall) im!ortant to an)*usiness% as i" not "or tem te *usiness wouldnt "un$tion. Em!lo)ees $an ave an im!a$t on ow a*usiness a$ts% "or e&am!le% i" new legislation de$reasing te ma&imum amount o" ours a wor8er $an

wor8 is !assed in eiter te =nited >ingdom or te Euro!ean =nion% te organisation will res!ond *)iring more wor8ers to ma8e u! "or te loss o" !rodu$tivit).

Su!!liers M Su!!liers are as im!ortant to *usinesses as $ustomers% te reason *eing is tat *usinesses$annot "un$tion witout tem. " su!!liers in$rease te $osts o" teir wor8raw materials!rodu$ts tente !ri$e "or *usinesses and $onsumers will in$rease !ro!ortionall). " te !rodu$ts tat te *usiness!rodu$es are !ri$e elasti$ ten te demand will de$rease wen te *usiness in$reases te !ri$e. Teorganisations res!onse will *e to $ange su!!liers% negotiate a *etter deal wit te su!!lier% or donoting and a$$e!t te su!!liers !ri$e in$rease witout in$reasing te !ri$e o" te !rodu$ts *eing soldto $onsumers% ta8ing a it to !ro(t *ut 8ee!ing $ustomers a!!).

E$onom) o" s$ale M An e$onom) o" s$ale is wen te $ost !er unit is redu$ed as !rodu$tion in$reases%tis a!!ens as manu"a$turing te !rodu$ts *e$omes more e$ient. A *usiness res!onse to ane$onom) o" s$ale would *e to lower !ri$es "or $onsumers as te $ost to manu"a$ture te !rodu$tsde$reases.

Fote

[?.?]

Judge how the business and cultural environments shape the behaviour of Tesco.

ts im!erative "or a $om!an) to a$8nowledge and understand all te !ossi*le *usiness and $ulturalenvironments wen running a *usiness% "or tese greatl) a#e$t ow a *usiness o!erates% *ot in te!resent da) and "uture.

Legal M Te legal environment in te => en$om!asses all te *usiness s!e$i($ laws and legislations+tese laws and legislations are !assed *) te => and E= governments. Te a"orementionedgovernments set laws wi$ *usinesses ave to "ollow+ tese laws $ould *e an)ting "rom anin$reased minimum wage to $om!etition regulation. Te legal environment$ulture as $anged te*eaviour o" Tes$o as te) ave to a$0uies$e to all te => and E= laws% legislation% regulations and$onsumer !rote$tion. Te Com!etition Commissions $om!etition test as !revented Tes$o "rome&!anding into $ertain areas% namel) smaller towns+ meaning Tes$o as ad to $ut *a$8 e&!e$tations"or e&!ansion and ad to loo8 elsewere in order to e&!and its *usiness !ort"olio 4La$oma6.

Environmental M Te environmental $ulture $an a#e$t an) and all *usinesses% owever% it as te*iggest im!a$t on agri$ultural *usinesses su$ as "arming and (sing. Com!onents o" teenvironmental $ulture in$lude $limate $ange% geogra!i$al lo$ation and sudden $anges in weater4E!a.gov6. it Tes$o Sustaina*le "armingN and Sea"ood sustaina*ilit)N Tes$o a$tivel) su!!orts teBritis "arming and (sing industries and relies eavil) on *ot industries *eing su$$ess"ul. " te"arming se$tor su#ers a severe winter% te "arming *usiness $ould lose man) o" its !rodu$e wi$would "or$e Tes$o to intervene and su*sidise te "arm and its wor8ers or to loo8 "or a !artnersi!elsewere 4Tes$o 3eal ood 5 Tes$o 3eal ood6.

Te$ni$al M Te te$ni$al environment as $anged signi($antl) over te last de$ade% wit more andmore $onsumers aving a$$ess to te internet. Te internet over all te oter te$nologi$al advan$esin te last ten )ears as ad te *iggest im!a$t on Tes$o. it Tes$o online so!!ing we*site% Tes$o


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;ire$tN Tes$o was a*le to e&!loit te internet revolution% wi$ started to a!!en in te earl) 9,,,s%gaining signi($ant mar8et sare in te online s!a$e *e"ore an) o" teir $om!etitors. Te !resen$e o"online so!!ing and te internet in general sa!ed te *eaviour o" Tes$o *e$ause Tes$o ad to *e$om!etitive+ Tes$o needed to ave a uge online !resen$e to !revent teir $om!etitors "rom doing so.n order to sta) $om!etitive in an online world Tes$o ad to !our a signi($ant amount o" man!owerand mone) into doing so% more so ten wat Tes$o was using !rior to te internet *e$oming morereadil) availa*le 43ig*)% 9,1,6

@oliti$al l M rom a *usiness stand !oint% te !oliti$al environment in te =nited >ingdom andelsewere in te world as *een "o$used on te 9,,K re$ession and wat $ountries sould do to lessenits e#e$t. Te => government !ressured Tes$o% te largest !rivate se$tor organisation in te => to$reate 9,%,,, new jo*s and a!!renti$esi!s *) 9,1< 4two )ears6% $ontri*uting greatl) to te re$over)o" te => e$onom) 4BBC Fews% 9,196.

So$ial M Te so$ial attitudes o" Tes$o $ustomers is $onstantl) $anging% so$ial attitudes in$lude:$ultural trends% $onsumer *u)ing !atterns% $onsumer demogra!i$s and te di#erent o!inions o" said$onsumers+ all o" te a"orementioned so$ial attitudes ave a great im!a$t on te demand "or !rodu$ts.Tes$os *eaviour is greatl) a#e$ted *) te $anging so$ial attitudes o" its $ustomer *ase% "ore&am!le% in te seasonal !eriod te demand "or Cristmas related !rodu$ts s8)ro$8ets and Tes$o asto meet tis demand. Tes$o meets tis demand *) im!orting more seasonal !rodu$ts "rom *ot te!rimar) and se$ondar) *usiness se$tors% in order to el! deal wit te overall in$reased demands o"

te Cristmas !eriod% will em!lo) more !eo!le 4E


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aimso*je$tives!riorities and missionvision statement. Tes$os !rioritiesvalues in$lude: ensuring$ommunit)% $or!orate res!onsi*ilit) and sustaina*ilit) are at te eart o" our *usiness% *eing a goodneig*our and *eing res!onsi*le% "air and onest and $onsidering our so$ial% e$onomi$ andenvironmental im!a$t as we ma8e our de$isions 4Cor!orate 3es!onsi*ilit)% 9,,K6. 7rou! Cie"E&e$utive O$er 4CEO6 @ili! Clar8e on$e said Te Tes$o values are em*edded in te wa) we do*usiness at ever) level. Our values let our !eo!le 8now wat 8ind o" *usiness te) are wor8ing "or andlet our $ustomers 8now wat te) $an e&!e$t "rom us.N 4TrU% 9,1?6. Te a"orementioned

values!riorities ave a "airl) signi($antl) im!a$t on te o!erations o" Tes$o and ave im!a$ted onTes$os (nan$ial !er"orman$e% "or e&am!le% due in !art to te stated !riorities o" Tes$o% te) ave *eena*le to set u! *usinesses in !oorer regions were smaller% inde!endent $om!anies are una*le to servete !eo!le o" said region. Anoter wa) in wi$ $or!orate $ulture a#e$ts Tes$o is wit te introdu$tiono" organi$% "ree range and "air trade !rodu$e 4mostl)% meats% vegeta*les% eggs and dair) !rodu$e6% dueto te in$reasing awareness o" tese !rodu$ts Tes$os earnings ave im!roved as selling said !rodu$eallows "or te largest $ustomer range !ossi*le 42ail Online% 9,,R6. Additionall)%Tes$o *elieves tat testature o" te *usiness de!ends on te em!lo)ees wo intera$t wit te $onsumers+ wi$ is w)Tes$o uses te ig $ommitment management stru$ture. Te ig $ommitment managementstru$ture de!ends strongl) on te training and te overall develo!ment o" em!lo)ees 4Clegg andBaile)% 9,,K6. Tes$o as develo!ed several training !rograms wi$ $over ea$ and ever) as!e$t o"te var)ing $ultures% st)les o" learning and /u$tuating res!onsi*ilities o" te jo*. Tis is to el! ensureTes$o $an meet its values and goals set out witin te vision statement.Fote

[LO *usiness organisations.

[ $limate% items su$ as >iwi "ruits% Oranges% Bananas%and 7ra!es 4Climate$oi$es.org.u86 are just some o" te items tat te => is una*le to naturall)!rodu$e and so te !re"erred metod "or retail *usinesses to o*tain tem is to im!ort tem "romoverseas. Te => im!orts % Tes$o in 9,11 stated tat => doesnot !rodu$e enoug *ee" to meet te $ountries demands and so attem!ted to mitigate te issue *)

im!orting Angus *ee" "rom te =nited States o" Ameri$a as o!!osed to !ur$asing Angus *ee" lo$all)"rom => "armers+ Tes$os reasoning "or tis de$ision was *e$ause Britis "armers in te => do not!rodu$e enoug *ee" and so im!orting "rom overseas was a justi(ed ne$essit) 4@oulter% 9,116.nternational trade $an el! *usinesses wen a sort"all in !rodu$tion a!!ens% "or e&am!le in 9,,K%te !rodu$tion o" Britis mil8 dro!!ed to a tirt) )ear low% meaning Tes$o and oter => retailers ad toim!ort mil8 "rom overseas% mainl) "rom te Feterlands and Belgium in order to su!!lement te needso" Tes$os $ustomers 4Sim!son% 9,,K6. Te Euro!ean =nions single mar8et is a "ree trade *lo$ wi$allows $om!anies to sell !rodu$ts to oter mem*er states% wit ver) little regulation and no tari#s+ tisis advantageous "or $om!anies wi$ o!erate in a multitude o" E= nations o" nations li8e Tes$o.Fote

[


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*) $ontrasting glo*al "a$tors. 7lo*aliDation is te !ro$ess *) wi$ te world is *e$oming moreinter$onne$ted. 7lo*aliDation a#e$ts *usinesses *ot *ig and small in a multitude o" wa)s% in$ludingjo*s% te overall $om!etitiveness o" te *usiness environment% em!lo)ment% *usiness e&!ansionismand te a*ilit) to outsour$e !rodu$ts to *ring $osts down.

7lo*al "a$tors in$lude:

Com!etition: Com!etition is a glo*al "a$tor wi$ a#e$ts *usinesses in a multitude o" wa)s. Teglo*aliDation o" te worlds e$onom) means tat it will *e$ome easier "or *usinesses% *ot large andsmall to *e a*le to enter a s!e$i($ mar8et as te rules% regulation and legislation *e$ome moreli*eraliDed% "or e&am!le% te ndian government in 9,11 allowed "or te (rst time "oreign su!ermar8et$ains to set u! in te $ountr). Te li*eralisation o" alread) esta*lised mar8ets and te o!ening o"new mar8ets li8e ndia and Cina ave "or$ed some $om!anies to "orm mergers wit oters in order tosta) $om!etitive in te tat s!e$i($ $ountr) and mar8et!la$e% an e&am!le o" tis is wen Tes$osCinese *ran$ merged wit te largest gro$er) retailer in Cina% Ianguard. Be"ore a *usiness $ane&!and into new territor)% it must (rst e&amine te alread) esta*lised $om!etitors and ten e&aminete !otential $om!etitors wi$ are o" e0ual im!ortan$e. 7lo*aliDation $reates a )!er $om!etitivemar8et!la$e wi$ is good "or $onsumers as it in$reases 0ualit) and de$reases !ri$es. 7lo*aliDation isalso good "or large *usinesses *e$ause it allows tem to e&!and into new territories wit lessregulation and legislation% *ut its in$redi*l) damaging "or smaller *usinesses as te) do not ave teresour$es to $om!ete wit a *ig glo*aliDed *usiness. n 9,1< it was re!orted *) tisismone).$o.u8 tat

over al" o" small *usiness start'u!s in te =nited >ingdom "ail witin (ve )ears% tis is in !art due tote $om!etitive nature o" te glo*aliDed e$onom).

E&$ange rates: E&$ange rates are vitall) im!ortant not just "or *usinesses *ut "or te ost nationse$onom) as well. A $ange in te e&$ange rates $an *e *ot a good and *ad "or *usinesses o" allsiDes. ;e!re$iation 4devaluation6 is wen te value o" a s!e$i($ $urren$) "alls% ta8e te 7B@ 47reatBritis @ound6 as an e&am!le% in 9,,R te 7B@ was valued at 9 =S; 4=nited States ;ollar6% so "or ever)7B@ )ou would re$eive 9 =S;% owever% due to de!re$iation% in 9,1 te 7B@ is now wort onl) 1.=S;. en a $urren$) devalues% e&!orting *e$omes more $om!etitive *e$ause it is now $ea!er "or*usinesses to im!ort goods "rom te => $om!ared to !reviousl)+ tis is good "or an) *ig or small*usiness wi$ e&!ort to man) di#erent $ountries% as it is now $ea!er "or overseas *usinesses toim!ort goods "rom te =>% owever% wit a de!re$iated $urren$)% im!orts *e$ome nota*l) moree&!ensive% wi$ ma8es o!erating a *usiness signi($antl) more di$ult% es!e$iall) smaller *usinesseswi$ la$8 te resour$es to meet te new $allenges.

Curren$) a!!re$iation is wen a s!e$i($ $urren$) strengtens against a di#erent $urren$)% "ore&am!le% te 7B@ was valued at 1.,? Euros in 9,,K during te re$ession% so "or ever) 7B@ )ou wouldre$eive 1.,?,% *ut *e$ause o" $urren$) a!!re$iation% *) 9,19 te 7B@ was wort 1.9RR Euros+a!!re$iation ma8es e&!orting !rodu$ts overseas mu$ more e&!ensive% wi$ in turn lowers teinterest o" overseas *usinesses wit regards to im!orting => !rodu$ts. Curren$) a!!re$iation $an *e*ot good and *ad "or *usinesses o" an) siDe% "or e&am!le% *usinesses wi$ o!erate onl)domesti$all) in te =>% $urren$) a!!re$iation $an onl) *e a good ting as tese *usinesses $an nowim!ort !rodu$ts "rom overseas "or a signi($antl) redu$ed !ri$e and ris8 and sin$e *usinesses wi$onl) o!erate domesti$all) rarel) i" ever e&!ort overseas te) $an avert most o" te *ad side e#e$ts o"$urren$) a!!re$iation.

[ingdom 4and elsewerewitin te Euro!ean =nions *orders6 *) ena$ting regulation% legislation and laws tat dire$tl) a#e$t*usinesses% not all o" tese dire$tl) a#e$t => *usinesses as te => is not a mem*er o" te Euro Done%instead te => is indire$tl) a#e$ted *) tem+ all o" tese laws% regulations and legislations are legall)*inding "or *usinesses% wi$ means tat i" a *usiness is $augt not a*iding *) te laws set *) te E=$ourts te) $an "a$e severe san$tions.

Te Euro!ean =nion !oli$ies wi$ a#e$t => *usiness are:

E$onomi$ and 2onetar) !oli$ies:Te E= e$onomi$ and monetar) !oli$ies 4e$onomi$ and monetar) union6 are !oli$ies set *) teEuro!ean =nion in an attem!t to in/uen$e te interest rates and e&$anges rates o" a s!e$i($Euro!ean =nion mem*er state 4or te euro Done as a wole6 wit te goal o" o*taining sustainede$onomi$ growt and ig em!lo)ment. ndividual mem*er states set teir own governmental *udget

!oli$ies su$ as ta&es. Te a"orementioned laws ma) not a#e$t => *usinesses dire$tl) as te => isnot a mem*er o" te euro Done% *ut i" a => *usiness as a !resen$e in a euro Done mem*er state% li8eS!ain% ten te a"orementioned e$onomi$ and monetar) !oli$ies o" te Euro!ean =nion $ould ave a


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uge im!a$t on ow te overall *usiness o!erates% meaning te monetar) and e$onomi$ !oli$ies $ouldindire$tl) im!a$t te => side o" te *usiness% "or e&am!le% te *usiness $ould slas o!erations in te=> to save revenue% revenue wi$ would ten *e invested into te S!anis side o" te *usinessinstead.

Em!lo)ment !oli$):Te Euro!ean =nions em!lo)ment !oli$) en$om!asses man) di#erent areas su$ as:

ealt and Sa"et) at wor8 E0ual o!!ortunities "or all @rote$tion against dis$rimination La*our laws or8ing a*road 4"reedom o" movement6 E= "unded s8ill training !rograms "or E= $itiDens

Te Euro!ean =nions em!lo)ment !oli$) ensures tat all wor8ers in te => ave a "air $an$e to!rogress trougout te $om!an)% regardless o" ra$e% se&ualit)% nationalit) and se&% 4e0ualo!!ortunities "or all and !rote$tion against dis$rimination a$ts6 ensures tat te "reedom o" movementis res!e$ted *) *usinesses trougout te Euro!ean =nion% wi$ means $itiDens "rom a di#erent E=mem*ersi! need to *e treated in te same manner as te indigenous !o!ulation. Te E= s8illstraining !rogram ensures tat em!lo)ment will alwa)s remain ig as te E= trains E= $itiDens to avete s8ills ne$essar) to (ll an) s8ills sortages% E= !revents wor8er e&!loitation *) setting te

ma&imum amount o" ours an em!lo)ee $an wor8 4La*our law legislation6 and te E= !rote$ts wor8ers*) im!lementing a standard "or ealt and sa"et) at te wor8 !la$e "or all *usinesses a$ross ever)mem*er state. Te a"orementioned laws greatl) a#e$t => *usinesses as te) are stri$tl) en"or$ed *)te E= and => government% wi$ means i" a => *usiness re"uses to a*ide *) tem% te *usiness$ould !otentiall) re$eive a uge (ne or *e ta8en to $ourt.

3egional !oli$):Te Euro!ean =nions regional !oli$) is a !oli$) were investments are made into te mostunderdevelo!ed regions o" te Euro!ean =nion% te "unding $omes dire$tl) "rom te Euro!ean3egional ;evelo!ment und and te Euro!ean So$ial und+ te E3; and Euro!ean So$ial und are*ot "unded *) te twent) eigt mem*er states o" te Euro!ean =nion and ma8e u! one tird o" teEuro!ean =nions total *udget.Te E3; and te Euro!ean So$ial und *ot el! im!rove te living standards in te !oorest regionso" te Euro!ean =nion% el! $ut )out unem!lo)ment *) $reating jo*s in areas wi$ ave ig areaso" )out unem!lo)ment% te) *ot im!rove te in"rastru$ture o" said areas and *ot assist in ensuringsmall and medium siDed *usinesses remain $om!etitive wit *igger *usinesses.Te regional !oli$) im!a$ts *usinesses in te => greatl) as te Euro!ean =nion $ontinuousl) uses teE3;3 and Euro!ean So$ial und to invest into te !oorer regions o" te =>% tese a"orementionedregions will t)!i$all) ave a signi($ant num*er o" under 9s 4)oung !eo!le6 unem!lo)ed. @art o" teinvestment in$ludes mone) "or te $reation o" )out em!lo)ment !rograms 49,1< M 9,9, teEuro!ean =nion will s!end Q9,G%,,,%,,, on te )out em!lo)ment initiative6 tese )outunem!lo)ment !rograms are run *) eiter te => government or an inde!endent *od) 4wi$ tegovernment overseas6% te )out em!lo)ment s$emes will wor8 dire$tl) wit *ig *usinesses in te =>4"or e&am!le% @E3A Training and ouse o" raser6% so as to give )oung unem!lo)ed !eo!le te $an$eto wor8 "or 4or to gain wor8 e&!erien$e wit6 some o" te *iggest em!lo)ers in te =>. Te E3; andte Euro!ean So$ial und are also used to assist small and medium siDed *usinesses in te =>% tisinvestment ensues tat said *usinesses remain innovative and more im!ortantl) $om!etitive witteir *igger $om!etitors. nvestment "rom te E3; and Euro!ean So$ial und is also *eing used to$onne$t rural areas to ig s!eed internet% as te internet is a*solutel) vital "or a modern *usiness%tis allows "or smaller and medium siDed *usinesses to set u! in more rural areas.

ree Trade !oli$ies:irstl)% tere is te single mar8et% te single mar8et allows unrestri$ted "ree trade *etween te twent)eigt mem*er states% and se$ondl)% te Euro!ean =nion negotiates "ree trades deals wit nonEuro!ean nations% te negotiations are anded *) o$ials "rom *ot te Euro!ean =nion and "rom tenation wi$ wants to "orm a "ree trade deal.Te single mar8et greatl) a#e$ts => *usinesses as it allows => *usinesses to trade "reel) a$rossEuro!ean =nion territor)+ te Euro!ean =nion a$ieves tis *): removing trade *arriers and $ustom$ontrols% sim!li(es $ross *order trading% removing trade *arriers "or *usinesses in te servi$e se$tor4wi$ allows said *usinesses to o#er teir servi$es $ross *order6% and allows "or "ree movement o"

!eo!le. All o" te a"orementioned reasons ma8e trading trougout te E= signi($antl) easier "or =>*usinesses% allowing tem to e&!and into new mar8ets and o*tain new $ustomers wit relative ease.Te "reedom o" movement 4see em!lo)ment !oli$)N6 ensures tat => *usinesses will alwa)s *e a*le


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to meet teir re$ruitment re0uirements. => *usinesses additionall) *ene(t "rom te Euro!ean =nions"ree trade agreements% te most re$ent *eing wit Canada. ts estimated tat te Canadian trade deal*oosted te E= e$onom) *) QR.H *illion and te => e$onom) 4and *) e&tension% => *usinesses6 *)Q1.? *illion a )ear.

;ate: 1,,K9,1.

To: ;avid Lewis% CEO o" Tes$o @LC.

rom: Benjamin Lee.

Su*je$t: Te im!a$t te Euro!ean =nion as on )our *usiness% Tes$o.

am writing to )ou to in"orm )ou o" te im!a$t te Euro!ean =nions !oli$es ave on *ot ow )ouo!erate in te =nited >ingdom and elsewere witin te Euro!eans *orders. Te wa)s in wi$ teEuro!ean =nion im!a$ts )our *usiness are numerous and in$lude in$lude: Legislation% wen teEuro!ean =nion !asses legislation it *e$omes te res!onsi*ilit) o" Tes$o to (rst a$8nowledge saidlegislation% ten )ou must amend )our own !oli$ies to meet te demands o" te new legislation.Legislation ena$ted *) te Euro!ean =nion is *inding "or all outlets in te =nited >ingdom as well as all)our outlets in te man) di#erent regions o" te Euro!ean =nion "rom wi$ )ou ave a !resen$e in.Tes$o is one o" te largest *usinesses in Euro!e% wit 9%K,, stores lo$ated a$ross man) di#erent E=mem*er states 4Sto$8s% 9,1,6% *e$ause o" tis% its im!erative "or )ou to a$8nowledge and a*ide *) allE= legislation% as "ailing to do so will resort in Tes$o "a$ing te Euro!ean $ourts+ !unisments given out*) te Euro!ean $ourts range "rom severe (nes% to losing 1- o" )our annual turnover and in e&treme$ases% )ou $ould lose te rigt to trade in a s!e$i($ $ountr)% as )our $om!an) trades in man) di#erentE= nations 4=>% ungar) and Slova8ia6 tis $ould greatl) im!a$t )our sareolders% sareolderswom ave !ut teir trust into )ou and rel) u!on )ou and )our *usiness to in$rease teir earnings.Te "ree trade !oli$ies o" te E= ave allowed )our *usiness to e&!and into new Euro!ean territories+te single mar8et sim!li(es trading a$ross *orders wi$ as allowed *usinesses su$ as Tes$o toe&!and into new territories% and *e$ause o" tis% Tes$o as seen signi($ant growt in its new territoriesin re$ent )ears% "or e&am!le sales in Slova8ia rose to G- in 9,1< 4Butler 5 Feville% 9,1?6. Fote

;ue to $limate $ange% te Euro!ean =nion as $ommitted itsel" to signi($antl) redu$e tegreenouse gas emissions it out!uts *) 9,9, 4E$.euro!a.eu6. Te E=s $limate $ange !oli$) in$ludes:9,- $ut in greenouse gas emissions% renewa*le energ) ma8ing u! 9,- o" total energ) $onsumed

and a 9,- in$rease in energ) e$ien$)+ *e$ause o" tis and *e$ause o" !ressure "rom te =nited>ingdom government% Tes$o also !romised to redu$ing its own $ar*on "oot!rint% *) 9,9, )ou statedTes$o would ave $ut its own $ar*on "oot!rint signi($antl) *) 9,9,. Wour *usiness intends to a$ievetis *): using solar !ower and wind "arms to $reate renewa*le energ)% $ontinuousl) investing intorenewa*le energ) s$emes% el!ing $om!anies wi$ su!!l) Tes$o set u! teir own renewa*le energ)in"rastru$tures% redu$ing re"rigerant emissions *) 1?- and a )earl) de$rease o" ,.?- in overall $ar*onemissions 4Car*ontrust.$om6

One o" te "ounding $orner stones o" te Euro!ean =nion was te "reedom o" movement o" !eo!les%tis "reedom ensures tat E= $itiDen must *e treated no di#erentl) "rom te native !o!ulations% tis"reedom as ensured tat Tes$o as alwa)s met its re$ruitment needs 42ail Online% 9,116% additionall)%te "reedom o" movement ensures tat Tes$o will alwa)s ave te a*ilit) to re$ruit te *est talent "romall over te E=% and% due to E= law% i" an E= $itiDen isnt treated e0uall) *) Tes$o% te E= $itiDen $anta8e Tes$o to $ourt. Te ealt and sa"et) at wor8 !oli$) o" te Euro!ean =nion as im!a$ted Tes$o as

now Tes$o as to $ontinuousl) 8ee! its sa"et) regulations u!'to'te'minute as not to *e (ned *) teE= $ourts% tis !ie$e o" legislation as ensured tat all o" Tes$os sta8eolders ave a sa"eenvironment to wor8 in. Te $om!etition law o" te Euro!ean =nion ensures tat all *usinesses% *igand small $an $om!ete "airl) trougout te Euro!ean =nions *orders% tis law as ad an im!a$t onTes$o o!erations es!e$iall) in te =nited >ingdom% stalling te e&!ansionist am*itions o" Tes$ossareolders 4Bell% 9,1


18/23

Benjamin Lee

t)!es o" e$onomi$ t)!es and ow te governments using said e$onomi$ t)!es allo$ate resour$es to teir$itiDens. Te re!ort also $overs wat Tes$o @LC does to !lease its sta8eolders and te strategies Tes$o uses+ow *ot $or!orate $ulture and so$io'$ulture $an im!a$t a *usiness a li8e Tes$o @LC and ow governmentregulation% *ot "rom te => government and te Euro!ean =nion $an im!a$t ow a *usiness o!erates.

Te re!ort "ound tat Tes$o @LC is a !u*li$ limited $om!an) owned *) its sareolders+ Tes$o as strategies "ormeeting its res!onsi*ilities and its sta8eolders 4strategies su$ as% *etter $ustomer servi$e% *etter "or training

sta#% *etter relationsi! wit su!!liers6. Tes$o o!erates witin a !er"e$t $om!etition mar8et!la$e% wi$ meansTes$o as to adjust !oli$ies a$$ording to te $om!etition% additionall)+ "a$tors su$ as (s$al and monetar)!oli$) are also !oli$ies Tes$o must $onsider. @er"e$t $om!etition means tat Tes$os !ri$es are di$tated *)su!!l) and demand. Te re!ort dis$ussed ow Tes$o is a => *usiness wi$ means te legislation Tes$o as toa*ide *) are di$tated to Tes$o *) te => government and E= government.

Fote

Bi*liogra!):


19/23

Benjamin Lee

Adrian%. XAdvantages And ;isadvantages O" A Limited Com!an) ' Te$om!an)wareouse Blog ' Com!an)

ormation And Business Startu! Advi$eX. TheCompanyWarehouse Blog. F.!.% 9,1,. e*. 1R Aug. 9,1.

Agnew% 2ar8. X1.? Billion 3easons To el$ome Te E='Canada Trade Agreement Y =>T BlogX. Ukti.blog.gov.uk.

F.!.% 9,1. e*. 1G Aug. 9,1.

Ban8o"england.$o.u8%. X2onetar) @oli$) ramewor8 Y Ban8 O" EnglandX. F.!.% 9,1. e*. 1G Aug. 9,1.

BBC Fews%. XS Sa)s orst O" => S!ending Cuts Wet To Come ' BBC FewsX. F.!.% 9,1. e*. 1G Aug. 9,1.

BBC Fews%. XTes$o @lans To Create 9,%,,, => Jo*s Over Two Wears ' BBC FewsX. F.!.% 9,19. e*. 1R Aug. 9,1.

Bell% 7illian. XCom!etition Law ' Te Basi$sX. Out-law.com. F.!.% 9,1


20/23

Benjamin Lee

E$.euro!a.eu%. XE0ual O!!ortunitiesX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. XE= Single 2ar8et 9, Wears ' at s Te Single 2ar8etX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. XEuro!ean Climate Cange @rogramme ' Euro!ean CommissionX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. XEuro!ean 3egional ;evelo!ment undX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. XEuro!ean So$ial und ' Euro!ean CommissionX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. Xree 2ovement ' E= Fationals ' Em!lo)ment% So$ial A#airs 5 n$lusion ' Euro!ean CommissionX.

e*. 1G Aug. 9,1.

E$.euro!a.eu%. Xealt And Sa"et) At or8 ' Em!lo)ment% So$ial A#airs 5 n$lusion ' Euro!ean CommissionX.

e*. 1G Aug. 9,1.

E$.euro!a.eu%. XLa*our Law ' Em!lo)ment% So$ial A#airs 5 n$lusion ' Euro!ean CommissionX. e*. 1G Aug.

9,1.

E$.euro!a.eu%. XTa$8ling ;is$rimination At or8 ' Em!lo)ment% So$ial A#airs 5 n$lusion ' Euro!ean

CommissionX. e*. 1G Aug. 9,1.

E$.euro!a.eu%. XWour 3igts And O*ligations ' Euro!ean CommissionX. e*. 1G Aug. 9,1.

E$*.euro!a.eu%. Xis$al @oli$iesX. e*. 1G Aug. 9,1.

E$*.euro!a.eu%. X2onetar) @oli$)X. F.!.% 9,1. e*. 1G Aug. 9,1.

E$onomi$sel!.org%. X=> 2onetar) @oli$) Y E$onomi$s el!X. e*. 1R Aug. 9,1.

E"ta.int%. Xree Trade Agreements Y Euro!ean ree Trade Asso$iationX. e*. 1G Aug. 9,1.

Entre!reneur%. XCor!orate CultureX. e*. 1G Aug. 9,1.

Entre!reneur%. XTe Basi$s O" Sole @ro!rietorsi!sX. F.!.% 9,,. e*. 1R Aug. 9,1.

E!a.gov%. XClimate m!a$ts On Agri$ulture And ood Su!!l) Y Climate Cange Y =S E@AX. e*. 1R Aug. 9,1.

Erd"$onvergen$e.org.u8%. XSu!er"ast Broad*and n"rastru$ture or Cornwall And Te sles O" S$ill) ' Convergen$e

CornwallX. F.!.% 9,1. e*. 1G Aug. 9,1.

Eur'le&.euro!a.eu%. X3egional @oli$) ' E=3'Le&X. e*. 1G Aug. 9,1.

in$% Julia. XTes$o O!ens ts irst Vero Car*on StoreX. the uar!ian. F.!.% 9,1,. e*. 1R Aug. 9,1.

inwe*.$om%. X< Advantages O" A @u*li$ Limited Com!an) ' inan$ial e*X. e*. 1R Aug. 9,1.

ontinelle% Am). Xis$al @oli$) ;e(nition Y nvesto!ediaX. nvestope!ia. F.!.% 9,,?. e*. 1G Aug. 9,1.

or*es%. XCina Ta8es Lead On Te 9,1 7lo*al 9,,,X. F.!.% 9,1. e*. 1R Aug. 9,1.

7ae*ler.$om%. XSu$$ess"ul Entre!reneurs o Started Out As Sole @ro!rietors ' Sole @ro!rietorsi!sX. e*. 1R

Aug. 9,1.

7lo*aliDation1,1.org%. XTrade And 7lo*aliDation Y 7lo*aliDation1,1X. e*. 1G Aug. 9,1.

7ov.u8%. XCor!oration Ta& 3ates And 3elie"s ' 7OI.=>X. F.!.% 9,1. e*. 1R Aug. 9,1.


21/23

Benjamin Lee

7ov.u8%. XSet =! As A Sole Trader ' 7OI.=>X. F.!.% 9,1. e*. 1R Aug. 9,1.

aw8es% Ale&. XTes$o 3e!orts 3e$ord @ro(ts O" ZQ?.KBnX. the uar!ian. F.!.% 9,11. e*. 1R Aug. 9,1.

eat% Fi$olas. XCina Cuts 3eserve 3e0uirement Again To Su!!ort 7rowtX. (euters. F.!.% 9,1. e*. 1G Aug.

9,1.

o!e% Cristo!er. X?, Carit) Cie"s @aid 2ore Tan ZQ1,,%,,,X. Telegraph.co.uk. F.!.% 9,1?. e*. 1R Aug.

9,1.

$aew.$om%. XCom!anies A$t 9,,G Y Law Y Li*rar) Y CAEX. e*. 1R Aug. 9,1.

nvesto!edia%. X7eneral @artnersi! ;e(nition Y nvesto!ediaX. e*. 1R Aug. 9,1.

nvesto!edia%. X2onetar) @oli$) ;e(nition Y nvesto!ediaX. e*. 1G Aug. 9,1.

nvesto!edia%. XFon!ro(t OrganiDation ;e(nition Y nvesto!ediaX. e*. 1R Aug. 9,1.

nvesto!edia%. XSe$tor ;e(nition Y nvesto!ediaX. e*. 1R Aug. 9,1.

rwin% Feil. X) ;id Cina ;evalue ts Curren$)P Two Big 3easonsX. *ytimes.com. F.!.% 9,1. e*. 1R Aug.

9,1.

Jonston% >evin. XAdvantages 5 ;isadvantages O" Business Coo!erativesX. "mall Business - Chron.com. e*. 1R

Aug. 9,1.

>ellogg$om!an).$om%. XOur Iision 5 @ur!oseX. e*. 1R Aug. 9,1.

>elloggs.$o.u8%. X9,9, Sustaina*ilit) Commitments Y >elloggXs =>X. e*. 1R Aug. 9,1.

>nowownon!ro(t.org%. X@ros And Cons O" Be$oming A Carit) N >nowow Fon!ro(tX. e*. 1R Aug. 9,1.

La$oma% T)ler. X7overnment Laws Tat A#e$t BusinessesX. "mall Business - Chron.com. e*. 1R Aug. 9,1.

L)n$% 3ussel. XTes$o Sales it B) @lunging ood n/ationX. The n!epen!ent. F.!.% 9,1,. e*. 1G Aug. 9,1.

2ail Online%. XOrgani$ ood And ;rin8 7ive Tes$o ts Best Season EverX. F.!.% 9,,R. e*. 1G Aug. 9,1.

2ail Online%. X3e$ession its Tes$o: 7ro$er) 7iantXs Sales all To Lowest igure n 1G Wears As So!!ers Turn To

Budget Su!ermar8etsX. F.!.% 9,,K. e*. 1< Aug. 9,1.

2ail Online%. X3etail 7iant Tes$o 3e$ruits Store Bosses rom SLOIA>A A"ter Britis or8ers Sun Su!ermar8et

Jo*sX. F.!.% 9,11. e*. 1G Aug. 9,1.

2anagementel!.org%. XBasi$ Overview O" Fon!ro(t OrganiDationsX. e*. 1R Aug. 9,1.

Fews% Co'o!erative. XIiew Te To! ?,, Co'O!eratives rom Around Te orldX. Thenews.coop. F.!.% 9,1


22/23

Benjamin Lee

3e"eren$e"or*usiness.$om%. X@artnersi!s ' ;uties% Bene(tsX. e*. 1R Aug. 9,1.

3esidual'rewards.$om%. XSole @ro!rietorsi! Is @artnersi! Is Limited Lia*ilit) Com!an) 4LLC6% Is Cor!X. F.!.%

9,1. e*. 1R Aug. 9,1.

3ig*)% Cloe. XOnline @ro(ts =! As Tes$o ;elivers 2ore Tan A Billion temsX. nternet (etailing. F.!.% 9,1,. e*.

1R Aug. 9,1.

3o% Sam. X? AmaDing 7ra!s Tat Sow ow Wour S!ending a*its Cange it AgeX. The Atlantic. F.!.% 9,19.

e*. 1G Aug. 9,1.

3ogers% Simon. XBritainXs To! 1%,,, Carities 3an8ed B) ;onations. o 3aises Te 2ost 2one)PX. the uar!ian.

F.!.% 9,19. e*. 1R Aug. 9,1.

Sessoms% 7ail. XTe Advantages O" A Coo!erative BusinessX. "mall Business - Chron.com. e*. 1R Aug. 9,1.

Sim!son% Aislinn. X2il8 m!orts Surge As Britis @rodu$tion ;ro!s To ?, Wear LowX. Telegraph.co.uk. F.!.% 9,,K.

e*. 1G Aug. 9,1.

Sites.$dnis.edu.8%. X>elloggs: O*je$tives% Strategies% Ta$ti$sX. e*. 1R Aug. 9,1.

Sto$8s% Jenn). Xat Sells 1.Bn Bananas A Wear% Em!lo)s Xs Cea!est

Engagement 3ing And 2a8es ZQG%,,, A 2inuteP Our 7uide To Tes$o B) Fum*ersX. +ail Online. F.!.%

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Summers% 2i$ael. XSole Traders Are Te 2ost Common T)!e O" BusinessX. TheCompanyWarehouse Blog. F.!.%

9,1?. e*. 1R Aug. 9,1.

T\r^_`\% Cristina. X@er"orman$e 2agaDine Zb rom Iision% 2ission And Ialues To >!is At Tes$oX.

#er'ormancemaga,ine.org. F.!.% 9,1?. e*. 1G Aug. 9,1.

Telegra!.$o.u8%. XBritainXs Biggest @rivate Com!anies: La)ing Te oundations O" Su$$essX. F.!.% 9,,K. e*. 1R

Aug. 9,1.

Tes$o !l$%. XTes$o @l$X. F.!.% 9,1. e*. 1G Aug. 9,1.

Tes$o !l$%. XTes$o @l$X. e*. 1R Aug. 9,1.

Tes$o !l$%. XTes$o @l$X. F.!.% 9,1. e*. 1R Aug. 9,1.

Tes$o !l$%. XTes$o @l$X. e*. 1R Aug. 9,1.

Tes$o 3eal ood%. XSustaina*le arming Y Tes$o armers Y Tes$o 3eal oodX. e*. 1R Aug. 9,1.

Tes$o 3eal ood%. XSustaina*le is Y 3es!onsi*le ising Y Tes$o 3eal oodX. e*. 1R Aug. 9,1.

Tes$o.$om%. XCor!orate O*je$tivesX. e*. 1R Aug. 9,1.

Tomorrow Studio%. XAdvantages And ;isadvantages O" A @u*li$ Limited Com!an) 4@LC6 ' Tomorrow StudioX. F.!.%

9,1X. e*. 1G Aug. 9,1.

Iulture% Culture. XTes$o Close Ameri$an Stores ;ue To Cultural ;i#eren$esX. wintessential.co.uk. F.!.% 9,19.

e*. 1G Aug. 9,1.


23/23

Benjamin Lee

allo!% arr). XTes$o ;ou*les @olis ood 3ange As @olis E&odus EndsX. Telegraph.co.uk. F.!.% 9,,H. e*. 1G

Aug. 9,1.

e**% Sam. XAsda% Sains*ur)Xs And Tes$o All Sell alal 2eat rom XLive >illX Animals Tat ave Fot Been

StunnedX. +ail Online. F.!.% 9,1

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The Final Assignment