Business Environment Essay Example | Topics and Well Written Essays - 1750 words - 4

Business Environment - Essay Example (i) Political factors: These factors include but not limited to political and legal structures, political alliances, foreign trade legislation, trade union power, pressure groups, taxation policies, legislature structures, employment legislation and monopoly restrictions. (ii) Economic factors: These involve inflation rates, money supply, business cycles, trading blocks, the nature and bases of competition domestically and internationally, investment level and unemployment. (iv) Technological factors: These factors include but not limited to the level and focuses of government and industrial R&D expenditure, speed of technology transfer, technological shifts, the direction of technological transfer, the costs of technology and product lifecycles. Tesco is Britain’s largest retailer of grocery, clothing, consumer electronics, and operates general merchandising chain. It commands a greater share of UK market in both food and non-food categories (Humby, Hunt & Phillips 2007, p.1). Even though Tesco enjoys great patronage because of its high customer loyalty, the current financial crisis is indirectly affecting Tesco’s business activities in the following ways: (i) Economic effects: The economy in UK has resulted in many workers being laid off. As the level of unemployment rises, those in that population automatically lost their purchasing ability; because they have no money to order from Tesco stores. It has been reported that UK is currently in economic recession, like every other Western European economy; what this circumstance signifies is that people tend to cut back on their expenses. This attitude could rob Tesco of continuous in-flow of capital that is needed to keep the company operating. As banks face a crisis that see their customers’ deposits dwindled over the past months, Tesco will increasingly find it difficult to secure loans as operating capital to sustain its business activities. Worse still, the