Laws passed by parliament have played an important role to affect Tesco's performance for a long time. For example, a minimum wage is the lowest wage that employers have to legally pay to their workers. To put it another way, it is the lowest wage at which workers may sell their labour. The Minimum Wage Act 1998 sets a minimum wage across the United Kingdom, which is currently i?? 5. 80 per hour for workers aged 22 or above and i?? 4. 83 per hour for workers aged 18-21. This Act could restrict Tesco's performance to maximise their profits as they will have to pay the minimum wage at least or more for all the people working for Tesco.
A wage is an expense as it is money going out of the business. However on the other side, it can help Tesco to achieve their aims in long term. For instance, if employees at Tesco get paid the right amount or more they deserve they will be happy to work for Tesco for a long time therefore Tesco can cut unnecessary spending such as training fee for the new staff and advertisement for the job vacancies. Another Act to be considered is the Food safety Act 1990 that regulates statutory obligation to treat food for human consumption in a managed way.
The key fact is that food must comply with food safety requirements. This Act aims to ensure that all food meets consumers' expectations in terms of nature, substance and quality. For instance, Tesco cannot include animal feed, medicinal products, cosmetics, tobacco products and narcotic products. This helps Tesco to achieve their aims and objectives set by keeping their customers safe and happy. The better quality, the more customers will use Tesco. As a consequence, Tesco will be able to maximise their sales revenue
Having been in the membership of the European Union, Tesco has grown a lot. The EU is an economic and political union of 27 member states which are located primarily in Europe and has made a single market through a standardised system of laws which apply in all member countries, and this ensures the free movement of people, goods and services. The European Union membership allows Tesco to set up easily in France, Germany and other member states and this enables Tesco to increase their sales and profit as they are many stores worldwide.
Economics growth means the increase in the gross domestic product (GDP) and productive capacity. It is often measured as the rate of change in GDP. National output can be increased if there is an increase in the quantity or quality of the inputs to the production process. Economic growth means consumers have more disposable income to spend on their needs. According to a research, happiness has been shown to increase with a higher GDP per capita and as people get more money in their pocket, they are more likely to spend more on luxury goods.
Therefore there will be an increase in Tesco's sales inevitably. Another factor that I have been keen to talk is the income tax. It is a tax levied on the income of individuals or businesses. High income tax means people have less money to spend on expensive goods at Tesco as tax is an expense. On the contrary, when the income tax is low, people tend to spend more on goods and services on Tesco as they would have more disposable income. As a result, this helps Tesco to achieve their aims of maximising profits and survive in the competition. 3. Social factors
There has been a rapid demand for organics/GM-free foods in recent years. Organic foods are made in a way that limits the use of synthetic materials during production. This method resulted in higher levels of nutrition and consumers may choose to buy organic food because they believe them to be more nutritious than other food. In addition to organic food, it was found that consumers want lower-fat and healthier foods. As the social trend says, world organic food sales jumped from US $23 billion in 2002 to $52 billion in 2008 and the world organic market has been growing by 20% a year since the early 1990s.
Whether or not Tesco can achieve their aim to maximise profits will depend on how well and fast Tesco adapts to this change. Tesco can provide a wide range of organic, fair trade and low-fat products to appeal to consumers. By doing so, Tesco can benefit from high sales. However, if Tesco does not adapt as well as its rivals, lower sales and lower profits are inevitable. As many people in this modern world work long hours and as there is a sharp increase in the number of women at work, people want the 'one-stop shop' where everything they need can be bought under one roof.
This is because as they work for long hours, they easily get tired and may have less time moving from one place to another. Also, consumers demand convenience foods due to lack of time for cooking. By providing a wide choice of convenience foods and more one-stop stores, Tesco will be able to not only meet customers' needs but also maximise their sales and profit. 4. Technological factors Electronic point of sale (EPOS) is self-contained and computerised equipment that performs all tasks of a store, Tesco, checkout counter.
It allows payments by bank or credit cards, verifies transactions, provides sales reports and performs several other services normally provided by employees at Tesco. It is also described as a barcode scanner linked to computers to monitor stock and allows more efficient stockholding by saving costs in storage and wasted stock. This can reduce Tesco's additional costs as they do not need to hire new staff plus training costs and this increase Tesco's profit by cutting its spending.
There has been a rapid growth in the global coordination and big firms are amalgamating to achieve the common aims and objectives. Products are becoming technologically advance such as high-definition televisions and 3D televisions invented by Samsung for the first time. By selling the latest technologically advanced DVD recorders and high-definition televisions, Tesco can capture market share from rival firms. Moreover, as those advanced technologies cost a lot, it is a good opportunity for Tesco to maximise their sales and at the same time they can meet customers' needs by offering the new models.
CCTV and security systems have played a key role in helping Tesco to reach their goals. CCTV stands for closed circuit television and is the use of video cameras to transmit a signal to a specific place. It is often used for surveillance purpose in areas that may need monitoring. Surveillance of the customers using CCTV is particularly common in the UK where there are reportedly more cameras per person than in any other country in the world. This will be a great help to Tesco to satisfy customer needs as people would like to shop in a pleasant and safe place.