Tesco it’ (BBC, 2017). This in turn will

Tesco is an ever growing
multinational grocery store and third largest retailer in the world measured by
profits, with a market capitalization of roughly £17 billion.  Tesco is a large supermarket company
associated with selling household goods and services as well as other retail
banking and insurance services. In this report I will be discussing the
financial and economical factors the affect Tesco as a whole companyMacro-environmental factors can
be defined as external and uncontrollable influences that affect an
organization’s business performance. These factors include, demographic,
economic, political, sociocultural, technological, global and physical changes,
which lead to a company’s decision making.One major factor which has
affected Tesco in the way its business is conducted is politics, legislations
and the level of government intervention within Public Limited Companies. There
are a range of laws and regulations Tesco must adhere to within its industry,
to ensure political stability, as well as fair and appropriate business. For
instance, in regards to the UK agricultural market, which receives, subsidise
of £3.2billion a year, the government have deemed to decrease this sum by year
2020 unless farmers ‘earn it’ (BBC, 2017). This in turn will affect Tesco as
lower subsidies for farmers will result in a fall of their ability to supply
and meet Tesco’s agricultural standards. In addition, substantial penalties can
be imposed on Tesco, if this leads to them forcing suppliers to sell at a price
which is lower than costs. (Winnett 2015).

Another example is that the Food
Retailing Commission in 2004 announced a policy, that Tesco are not allowed to
demand payments from suppliers or change their prices without prior notice. To
implement these, Tesco offers its customers many promotional bargains and perks
in accordance to the amount of grocery shopping with them. One is with the use
of their loyalty club card customers can receive discounts on many things such
as cinemas, theme parks and saving in the price of fuel.

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