Business P5&M2

In: Business and Management

Submitted By mohamed1234567
Words 1786
Pages 8
P5- Describe the influence of two contrasting economic environments on business activities within a selected business origination. For this task I will be using the retail store Tesco as my business of choice as to see how they managed in the last 20 years. The two economic environments that effected the company were the recession and growth periods in the UK economy. In 2011 Tesco suffered its worst six months in the UK over the last 20 years. Reasons for this includes customers cutting back on electronics, food and other items that Tesco heavily depends on selling to make a profit. An economic growth is an increase I the production of goods when there is more demand for the products due to income rising from the customers. This affects Tesco in a positive way as the costumers are willing to spend more money on their wants and therefore increasing the profit of the company. Recession is a period of time where there is a general economic decline. It is when the oncome of the costumers decrease and the shops that benefit from the amount of spare money that they have to give to buy their product slow down the production of merchandise. Recession hit the UK in this fashion in 2007&2008, this put many businesses like Tesco in danger as they’ve had to decrease most of the prices of the products that they are selling for their costumers to be able to continue buying their products as people were looking to get more for their money. The customers look for products with a cheaper price as they need to save money due to the emerging economic down fall. Manufactures and sellers cut back on their orders, produce fewer goods and cut back on their costs in general which also include letting employees that they cannot afford go. Recession affects customers because the amount of people without a job would increase drastically and as such it will become be more…...

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