P5/M2 controlled assessment: describe and compare the influence and challenges of two contrasting economic environments on business
activities for Tesco PLC
Economic Environment 1: _UK_____
Economic factor Definition/Description Figure Implications on this being Implications of this economic issue on Tesco’s Business
high or low over time. Activities.
Growth Rate - GDP Gross Domestic Product is Gdp is decelerating; this If gdp is decelerating it could mean the business activity pf
a measure of a country’s means that if economic investment and expansion will be affected, Tesco plc would
economic activity activity is showing then not spend money on the business activity investing and
0.3% 3months of low growth expansion.
then it means there is a
recession.
Inflation Rate Rising inflation means Higher inflation with wages not increasing could mean that
Inflation is a measure of product and services are people spend less at Tesco Plc. The business activity that could
how much your money getting more expensive. be affected is investment and expansion. If Tesco feel that they
can buy you. 1.2% High inflation means your are not making as much profit they will stop recruitment of
money buys you less and staff.
wage increase won’t
happen.
Interest Rate Uk interest rates are at a For Tesco plc if the consumers have more money to spend than
Interest rates determine record low. To encourage Tesco plc will see more revenue and higher profit. If this
the reward for lending consumers to spend more happens the business activity of investment and expansion will
and the cost of borrowing 0.25% because they are paying be affected as Tesco will stop creating jobs.
money. Interest rates less on their debts. Firms
determine how much with commercial
savings you get for their borrowing will have lower
money. cost because they are
now paying less interest.
NAME__Tyrese Burgin Nyamekye____________ UNIT 1, The Business Environment: P5, P6, M2 & M3
activities for Tesco PLC
Economic Environment 1: _UK_____
Economic factor Definition/Description Figure Implications on this being Implications of this economic issue on Tesco’s Business
high or low over time. Activities.
Growth Rate - GDP Gross Domestic Product is Gdp is decelerating; this If gdp is decelerating it could mean the business activity pf
a measure of a country’s means that if economic investment and expansion will be affected, Tesco plc would
economic activity activity is showing then not spend money on the business activity investing and
0.3% 3months of low growth expansion.
then it means there is a
recession.
Inflation Rate Rising inflation means Higher inflation with wages not increasing could mean that
Inflation is a measure of product and services are people spend less at Tesco Plc. The business activity that could
how much your money getting more expensive. be affected is investment and expansion. If Tesco feel that they
can buy you. 1.2% High inflation means your are not making as much profit they will stop recruitment of
money buys you less and staff.
wage increase won’t
happen.
Interest Rate Uk interest rates are at a For Tesco plc if the consumers have more money to spend than
Interest rates determine record low. To encourage Tesco plc will see more revenue and higher profit. If this
the reward for lending consumers to spend more happens the business activity of investment and expansion will
and the cost of borrowing 0.25% because they are paying be affected as Tesco will stop creating jobs.
money. Interest rates less on their debts. Firms
determine how much with commercial
savings you get for their borrowing will have lower
money. cost because they are
now paying less interest.
NAME__Tyrese Burgin Nyamekye____________ UNIT 1, The Business Environment: P5, P6, M2 & M3
