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Evaluate Future Changes D2

In: Business and Management

Submitted By jthoma159
Words 839
Pages 4

It is vital to investigate the economic, political, legal and social factors of an organisation before making any future plans on it. The business that I have chosen is Asda. It provides goods and services that people require in their everyday life for an affordable price.
Economic influence
The economy of the UK has barely grown due to the recession which impacted on the demand for goods and services in UK. Inflation rate means increasing level of prices of goods and services. When the inflation rate rises, the government will raise interest rates to reduce spending.
The inflation rate is 2% above target which means it has a positive impact on Asda as they will be able to provide cheaper products. This also means that there will be more competition for Asda as other stores may provide cheaper products. Asda is affected by inflation rate when prices shoot up but the wages don’t increase so customers have less money to spend.
The public transport has an effect on Asda because is there is less transport, there will be less customers coming to Asda and they wouldn’t make any money. Asda will have to keep customers coming into their supermarket because it will be highly likely that they would go to stores that are cheaper.

Political influence
The government has a huge effect on Asda when it comes to changes in government laws such as taxation, price restriction and how money is managed. Asda has a great effect on its sales due to high levels of competition. They should advertise more and increase the cost of the same. Cheap stores such as Aldi and Lidl is a big threat to Asda.
Asda needs to provide excellent customer service to avoid these kind of competitions between stores. Asda has brought their own products to which…...

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