Evaluate the Impact of Changes in the Economic Environment on a Selected Business

642 Words Dec 5th, 2012 3 Pages
Evaluate the impact of changes in the economic environment on a selected business – D1
After various changes to the economic tax and interest rate, CPHP have conducted and compiled research into current public spending. The results show that there has been a dramatic reduction in the level of public spending in the UK.
The changes in economic environment will affect a business, the profit of the business will be affected because its affect the price and income of a business, which are the main aspect of a business.
If Tesco decides to change the price of their goods, for example; the price of their doughnut in 2009 was 5 pieces for a pound, a reasonable price for students but with the economic environment it affected everything with
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This will affect Tesco growth because the loans will affect their income, cash flow and business image. Tesco will pay more and profit will drop.
Tesco also have social factors that affect them, as the business have charity centre in helping the less privilege people and the more these people gets poor, the more they will have to stretch to help out which also spending money.
Recession causes unemployment, this will affect the demand for goods and Tesco profit will drop.
An economic factor that might affect Tesco is the demand of the consumer and customer which will decrease with the different problems; people are having in the world. As the demand decrease so the economy of the business will decrease and the profit of the business will decrease too. This refers in the fiscal and monetary, for example since when the government decided to raise the VAT from 17.5% to 20%, the business increase their goods price and due to that reason the customers do not purchase enough goods like they used.
Social factors refer in the trend of customer which keeps changing their trend, and what the trend of their purchase. For example nowadays due to people’s work, they are really busy so they often decide to buy already cooked food.
Technology refers in how Tesco adopt online shopping to attract customer, to purchase goods and services from the business. Another technology might be the introduction of
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