Evaluate the Impact of Changes in the Economic Environment

Evaluate the impact of deepens in the frugal surround on a selected crease D1 After various changes to the stintingal revenue enhancement and interest rate, CPHP have conducted and compiled research into current universal consumption. The results gift that there has been a dramatic reduction in the level of public spending in the UK. The changes in economic environment volition profess a business, the profit of the business will be hazarded because its repair the hurt and income of a business, which are the main aspect of a business.If Tesco decides to change the price of their goods, for use the price of their aureole in 2009 was 5 pieces for a pound, a reason commensurate price for students but with the economic environment it stirred everything with the introduction of VAT from 17. 5% to 20% made the price of the doughnut to now cost almost 1. 30p the change is affordable for some bulk but for other people it is non affordable. The reality of this economic envi ronment is that when the price change and it becomes higher, consumers get less happy and this affects our range of epoch of buying certain products.The article above shows how the economic environment tax income is affecting prices as a whole, the price of cigarettes and alcohol in deprivation to increase. This will affect Tesco because this is where they make most of their sales from. They have nearly to sessions for both cigarettes and alcohol. When these products increase, it means their sales on these products will reduce because not a lot of customers will still be buying these products.Another policy that will affect the business Tesco is the fact their employee cant have more(prenominal) than 39 hours, this policy will have impact on the business because they will have to recruit more workers and especially for the openhanded 24 hours Tesco. This will affect Tesco income because it will increase the rate of their gist because they will spend a lot of money on nonrec reational their workers. Another important economic environment impact will be the fact that Tesco will have to apply for more loans to be able to successfully run the business until its able to make equal money by itself and rely only on their income.This will affect Tesco growth because the loans will affect their income, cash flow and business image. Tesco will pay more and profit will drop. Tesco also have brotherly factors that affect them, as the business have charity centre in helping the less privilege people and the more these people gets poor, the more they will have to stretch to help out which also spending money. Recession causes unemployment, this will affect the demand for goods and Tesco profit will drop.An economic factor that might affect Tesco is the demand of the consumer and customer which will come with the different problems people are having in the world. As the demand diminution so the economy of the business will decrease and the profit of the business will decrease too. This refers in the fiscal and monetary, for example since when the government pertinacious to raise the VAT from 17. 5% to 20%, the business increase their goods price and due to that reason the customers do not purchase enough goods homogeneous they used.Social factors refer in the trend of customer which keeps changing their trend, and what the trend of their purchase. For example nowadays due to peoples work, they are really engage so they often decide to buy already cooked food. Technology refers in how Tesco adopt online shopping to attract customer, to purchase goods and services from the business. Another technology might be the introduction of delivery which refers in how the businesses deliver their goods around the customers address.