Influence contrasting economic environments Essay

identify the influence of two contrasting scotch environments on business activities at bottom a selected organisation. There atomic number 18 two very important economical environments that effect Tesco, economic result and the recession. An economic growth will be good for Tesco as business will be pan gravying, more than(prenominal) goods be being produced and improvements are increasing. When this happens Tesco becomes a very high profit business and invest in new products or stores which foot predate to Tesco being more profitable business wise. Profits are increase during economic growth as customers want more products they suck up the capital to sp give the sack and choose to spend it in Tescos.This leads to a much higher(prenominal) product demand, which affects the primary sector farmers. Farmers will conduct more animals and more farm hands effectively as they are producing for a pear-shaped company and if the demands arent met they will lose business. Fo r example during an economic boom muckle tend to buy luxuries as they soak up the spare cash to spend, so a customer sort of of buying a straightaway meal might decide they will clear a steak instead and there could be a large amount of Tescos customers with the same thought process, this will in turn mean that Tesco will parade a large amount of steaks from the farmers and if they furthert jointt lend this they will lose Tescos business and also Tesco wont be able to meet its customer demands and could also lose business. citizenry will also stop buying Tesco value products such as cereal, canned goods and start buying branded names as they can afford it and we are a brand loving country which message that Tesco generate more money as people are buying the much more expensive goods. In 2011/2012 Tesco had a reasonable growth in profit even in a challenging economic environment, Tescos sales increased by 7.4% to 72 billion.Tesco more everywhere did not make the profit that they would have wish welld they were running their business in a very challengeable time during 2011/2012 as the recession is take over very much taking over the economy, they managed to survive by religious notching their customers Tesco value products at next to nothing prices which were bought a lot more due to their cheap prices offering more competition for companies such as Lidl. During a difficult economic clime consumers cut down on spending in an attempt to try and save money as the cost of living increases but wages dont. This means that Tesco would have cut down on orders to manufacturers for example the steaks, no one would have been buying them and they may have cut their order from 1000 to four hundred for example.The on-line(prenominal) interest judge canalso effect a company like Tesco because if they borrow a loan from the bank hence if the interest rates are high then Tesco will end up move overing back more money than the original borrowed amount, s o far if they are lower than it would be the best time for Tesco to borrow if they need to because although they will still be paying back more than what they borrowed however it will be a much lower amount. Inflation rates can also present problems as they decrease and increase over time if the rate of inflation is high the Tesco will increase their prices to avenge for the rise however this will decrease their sales because customers wont be willing to pay the higher prices. GDP (Gross National Product) is the grocery store value of all goods and services over a certain closure of time if the GDP increases by 3% it means that the economy has expectant by 3%, this has an impact on everyone in the economy because it affects the acquit market which is something that any potential investor will take into consideration in advance they invest.Tesco will see wage increase in a flushed economy and higher profits as Tescos products have a demand increase. malignant neoplastic diseas e question UK will have struggled during the recession and current times as people are cutting down on spending and unlike Tesco Cancer look are selling things that yes people need, however their products arent essential therefore they will be losing hemorrhoid of money and may have to cut down money on research and support. They have a much smaller budget that has to be spent carefully in order to prevent a disconfirming impact on the business recently Cancer Research has not had the storehouseing to research into new types of cancer and develop knowledge as they have had such little funding. During an economic boom however Cancer Research will hopefully make plenty of money to fund research and support as people will have more money to spend on clothes and shoes. They are able to offer a lot more support and can do all-inclusive research into new kinds of cancer as they have the funding. Inflation can affect a business like Cancer Research UK but not as much because they dont buy in their stock its all donated by customers, however they may just about increase their prices which in such a difficult economic climate is something that they desperately want to avoid.GDP will affect Cancer Research because they may see an increase in customers if the GDP was low because typically there are high rates of unemployment at times like that and people still need clothes to wear and rather than pay high street prices people with go to thecharity shops and buy cheaper game hand clothes. However if the GDP increased then Cancer Research may see a decline the their sales and customers because there are high levels of employment during a high GDP and people with have more money to spend on high street trends.