In economic environments Essay

Submitted By saphbennett
Words: 747
Pages: 3

In economic environments there will be there will be things that have an impact on the business organisation, this may be things like; the Amount of competition and the recession/growth in the business environment.

The amount of competition within business is the amount of buyers and sellers in a market For example there are lots of cafe’s, all cafe’s tend to sell the same products there fore their prices depending on how good the cafe’s were would have around about the same prices. Having this type of competition sets the cafes’ grouping because it all depends on the profits of the business. The competition happens when two or more businesses have the same type of products that they sell to the same type of customers.
The recession/growth within the business environment is the when the government put up taxes this means for businesses that they have to save money firing staff and/or lowering prices which means they would end up having less profits, to continue being able to compete in the market. People lose their jobs in a recession, this then means people need to save money by shopping at a lower priced business.
Financial impact
Tesco had to adjust their price range for products around all their supermarket. This could have partly to do with the decrease of spending in “value” products. This meant that Tesco needed to focus on making the value products better to suit customer needs. However, this may have also been because of competition in other supermarkets who offer value products that are either cheaper but not better quality although people would rather save money.
Marketing impact
Tesco had to adjust its product range as a result of the recession. The reduction in disposable income experienced by many of it’s customers means that it needed to focus on a large selection of value products than had previously been the case. However, the recession meant that Tesco had a lot more competition and during the recession Tesco had to limit marketing/advertising to save money. In order to save money Tesco would have to watch how much they are selling in order not to waste products and waste money for transportation of these products. There would be a big impact on Tesco, which then means they have to lower prices for luxury items in order to be able to match or be cheaper than competition. Moreover Tesco have less pressure to be efficient because they will always have customers.
Human resources
Tesco’s would have to make people redundant during a recession this is because Tesco needed to cut wage prices in order to keep prices the same and be able to make profits. Also in a growth it’s harder to employ higher quality people to work for Tesco for low wages therefore within a recession you’d…