Evaluate how future economic, political, legal and social factors impact the strategy of an organisation

815 Words4 Pages
D2 Evaluate how future economic, political, legal and social factors impact the strategy of an organisation Economic Factors Economic factors have always been a concern for businesses like Tesco’s this is because the economy is continuously changing. In 2008 we experienced a worldwide recession which affected every business after the stock market collapsed. Tesco’s were also affected by the recession which resulted in their profits decreasing however they did find a way to benefit from the lack of flow of cash in the economy they did this by changes the prices of their products to match the state of the economy to continue to generate sales. Tesco’s is a high risk company to the recession and credit crunch, we can see this because…show more content…
Tax increase is also a problem for business such as Tesco’s and Spar because they would have to pay more tax which means they will lose money therefore lowering their profits. Another concern for these business is the Vat rise which has risen from 15% to 20% which has made prices higher which means that Tesco’s will have to pay more to their suppliers which results in Tesco’s selling their products for a higher price in order to stop their profit from falling. Fuel price rises are also another concern because Tesco’s use fuel for things such as home deliveries and suppliers with fuel prices rising it is going to make these deliveries more costly which will either result in stopping certain services or rising prices which will have a negative effect on Tesco’s customers because they will either have to pay more for the service or not receive it at all. Legal Factors Legal factors are also important with the running of a business like Tesco’s or Spar, these business need to ensure that they working within the laws enforced by the government and are up to date on any changes in the regulations, for example is the European Union became more strict on importing goods this could mean that certain products that Tesco import could be declined because they don’t fit the regulations anymore and if Tesco’s were found importing these goods after this
Open Document