Business Issues and Challenges

Note1) This should focus on a political or economic issue that you have learned about in class.

Political

Tesco is the world known the brand and this company has developed its business in almost all developed countries of the world. Tesco has given special emphasis to its clients, and it has built the relationship with them (Beynon-Davies, 2013). Political issues are one that has to do with government. The various political issues across the world create different types of problems for the companies and also in supplying their products to customers. Due to increased price of raw material, the price of products is also increased that makes it out of reach of the cost-conscious customers. The political system of UK has undergone a huge transformation. Due to the implementation of economic reforms, the political factor of UK become effective which allowed the country to focus on foreign investments (Boons and Lüdeke-Freund, 2013).  Tesco is working in a diversified area, and it has to face changes in rules and regulations in different countries. In many countries Tesco products are not allowed due to several political reason. Due to emerging economy, the company has shown its stability including in China and India. The consumer in the under developing countries can not afford to buy Tesco product because in that time global regulations are changed, and Tesco have to follow several political changes. While making any product of an international level the product must have to fulfil the different international norms. Nowadays rules and regulations are revising continuously (Carroll and Buchholtz, 2014). A range of political factors can affect the company in both ways i.e. indirect and direct ways. Many political factors that may affect Tesco include but not limited to political stability in the country. Since the Tesco operates worldwide, global political factors greatly influence the performance of business. These include tax rates, rules and employment legislation (Carroll and Shabana, 2010). Due to ongoing political instability in the world, many governments encourage retailers to create jobs for the domestic population. For employment legislations, these organisations support government financially and in their other political endeavours so that they can get their way in return. Certain political issues can potentially have negative implications on company's bottom line. Tesco is operating approx fifteen countries all over the world, so its performance may be influenced by the local government as well as national government. In many countries, most of the local government encourage the companies to provide employment for applicants so that local people can be benefited more. The company followed the legislation, rules and other laws properly in every country where it has stores.

Note2)This should focus on social or environmental, or ethical issue that have learned about in class.

Social

Nowadays the education level in the developed countries is improved, and customer has great awareness about the service and quality of the products. Tesco has an international standard of producing the products and the eco-friendly ingredients are used in all of the product. And also introduced some financial products, which are used almost all of the developed countries across the world (Alshamaila, Papagiannidis and Li, 2013).  In the UK most of the customer have great faith over Tesco products, and they always like to buy its products and services with great confidence. Now it becomes necessary to understand the attitude of target customers. Social factors relate to the culture aspects and demographic aspects that will affect the demand for the company's products. Other factors include age, cultural norms, population, income statistics as well as social conventions and religious beliefs. Social issues play a critical role in global and international markets, and the business will depend on the research in this area. All these factors help the Tesco to examine consumer needs and determine what pushes them to make purchases (Bartolomei and et.al., 2012). This company also works according to the social demand and culture norms with social responsibility. Because of the variety of social changes, the consumer in the UK has moved towards bulk shopping, which is due to a variety of social changes. So that Tesco has increased the variety of non-food items for sale. This type of sale demanded by customers is mostly influenced by their beliefs, attitudes and norms. In the UK, consumers are becoming more aware of their health issues, due to this Tesco is adapting many changes by accommodating the demand for organic products. Demographic change and change in customer attitudes are the important social issues which can show an effect on an organization (Beringer, Jonas and Georg Gemünden, 2012). In Tesco, the director must consider social conditions to recognise whether the product will stand for benefit in the country or not. The rapid industrialisation of United Kingdom was an issue which impacted localisation of Tesco.

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Note3) This should focus on a legal or technological issue that you have learned about in class.

Legal issues are determinants of a legal's performance that directly impacts a company. These issues include both external and internal sides. There are many laws that affect the company environment in the UK. So that there are certain rules and regulations that Tesco maintain for themselves. In any company, legal factors include health, safety, consumer rights and product safety (Samiee, Chabowski and Hult, 2015). In Tesco, various government legislations and regulations have a direct impact on the performance. In Uk, Food retailing commission enforced to use the best pricing for products. So that retailers do not change the price of products without any notice. Most of the retailers try to change prices on regularly basic to attract target customers. There are many numbers of laws that directly affect Tesco because the organisation markets a large number of products and services. This company is also engaged in other product like credit cards, saving and loans. The financial services Act was recently enacted in Tesco. The presence of most powerful retailers with established brands creates a threat of requirements for product differentiation. Because Tesco is primary dominated by few competitors. The local and national government's policies can offer consumers a price control (Turner and Zolin, 2012).  The list of legal factors that would be considered includes current legislation and old legislation that may affect the Tesco in areas such as competition, health and employment. In the UK, there are many regulatory bodies that have been set up to monitor firm's legislation to all areas of operations, including employee welfare and consumer protection. All these issues affect the way in which a business functions and have cost implications that need to be taken into account while formulating business strategy. The key aspects of the employment legislation affect the decision but in a positive way because every one knows that the rules and regulations in any place are made to stop the unwanted and unfair situation. The United Kingdom legal system provides with one of the most important regulatory incentives for industrial investments among the company for development. The wide variety of incentive solutions provided by the state government of UK stands for the major attraction for overseas investors (Wu, 2016). Tesco also has to face the labour laws, and it has to fix the minimum wages of the worker under the provision of these laws. This company has to follow the foreign trade rules and regulations while sending its products to another country. Tesco needs to follow the global rules and regulations to make changes in its working in the international markets.

CONCLUSION

From the above report, it has been observed that all issues are used to examine the current and future status of the company. And also helps in the strategic planning and gaining the competitive advantage. All these issues can not be used for the business, but various departments can also be investigated under this framework. The result of the political issues shows that the Tesco is politically stable. In Tesco, Microenvironment has covered large place due to its mega market and vast area. Due to its mega market, feature political, legal and social factors always mixes in its functionality. It is important for the company to carry out the all the issues in a proper manner. If all the factors are not being conducted in the proper manner the company shall not be able to achieve its goal and objective.

REFERENCES

• Al-Debei, M.M. and Avison, D., 2010. Developing a unified framework of the business model concept. European Journal of Information Systems. 19(3). pp.359-376.
• Beynon-Davies, P., 2013. Business information systems. Palgrave Macmillan.
• Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
• Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning.
• Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: a review of concepts, research and practice.International Journal of Management Reviews. 12(1). pp.85-105.
• Alshamaila, Y., Papagiannidis, S. and Li, F., 2013. Cloud computing adoption by SMEs in the north east of England: A multi-perspective framework. Journal of Enterprise Information Management. 26(3). pp.250-275.
• Bartolomei, J.E. and et.al., 2012. Engineering Systems Multiple‐Domain Matrix: An organizing framework for modeling large‐scale complex systems. Systems Engineering.15(1). pp.41-61.
• Beringer, C., Jonas, D. and Georg Gemünden, H., 2012. Establishing project portfolio management: An exploratory analysis of the influence of internal stakeholders' interactions. Project Management Journal.