P 1.1

A company’s operating situation is influenced by a combination of external and internal factors. These factors may include laws, government activities, clients, suppliers, its competition, owners, improvements in technological improvements, social and economic trends and the market. . Business environments differ from country to country due to differing government laws and regulations.

a) Virgin Group LTD (1)
(The Virgin Group LTD Virgin Group Ltd. is a British conglomerate of multinational branded capital ventures, which was founded by the entrepreneur Richard Branson Its main line of business encompasses financial services, transport, health care, food and drink, and telecommunications; as well as travel, entertainment and lifestyle, The Virgin Group Ltd has more than 400 companies worldwide.
The Virgin group company has limited liability. It is run by directors, its capital is divided into shares and it is legally accountable. Limited companies can begin trading once its Memorandum of Association has been drawn. This memorandum contains the objectives of the company, the name of the company, its registered office, the liability of its members with the number of shares to be issued along with the amount of capital to be raised. The Article of Association outlines the rights of its shareholders, detailing the procedures for the appointment of the directors, the extent of their powers, and the duration of their role. This also lays down the timing and frequency of company meetings, as well as arrangement for auditing the company accounts. The limited company also needs to have a certificate of Incorporation and be in the Registrar of Companies.
A characteristic, apart from having Ltd in their names is that shares can only be transferred privately with the consensus of all of the shareholders. These companies are usually small, run by family or close friends, who are usually the shareholders and at the same time the directors. The majority of manufacturing firms tend to be private limited companies rather than Sole Traders or Partnerships. Some of the disadvantages of this type of company are the fact that profits are shared amongst a much larger amount of members, the legal procedure involved in setting up the company is time consuming and costly and the amount of capital that can be raised is restricted as shares cannot be sold to the general public . The general public has access to the financial information about the company filed with the registrar, which could be used to the detriment of the company by its competitors.

b) TESCO PLC (2)
Tesco is a British Public Limited Company. It is a retailer, the third largest worldwide, selling grocery and general merchandize
In order to be a PLC a company must first of all fulfil certain criteria. It must have a memorandum of association, an article of association and a statutory declaration. They must be in the Registrar of companies, have a certificate of incorporation, have published a prospectus and float on the stock exchange. In addition to this trading cannot begin until the shares a quoted on the stock exchange. As Plc companies are quoted on the stock exchange huge amount of money can be raised by selling their shares to the public, because of their size in many cases they dominate sections of the market. Coast of production can also be low due to their size. Financial institutions such as banks etc are more willing to grant them loans. The restriction placed on plc to protect their shareholders by the various company act and the sheer size of Plc companies tend to make them very inflexible , impersonal, and expensive to set up. Floating on the stock exchange means that anyone can buy shares which could result in any outside interest taking control of the company. The owners do not wholly control the company therefore decisional powers are limited. The public has access to view all company accounts.
c) MC Donald (3)
3) Mc Donald has more than 34,000 local restaurants, which serves nearly 69 million people in nearly 118 countries. Every day McDonald's is the number one food service retailer in the world. It is a franchise company, having over 3,000 owner operators. It is number one in the world in this field. Franchising is a contract between two companies whereby, the franchisee by right of contract is allowed to use the logo and name of the franchiser. It is then up to the franchisee to decide on which type of legal structure he wishes to give his company. A need of capital, the size of the business and its age may determine this. Other factors which may determine the choice include, limited liability, if they want to protect their personal assets, the degree of control desired by the owners, and the nature of the business will also determine the choice.

d) Public Sector Organisations (4)
The National Health Service
The National Health Service was implemented in 1948 in the United Kingdom. It is public health care system funded by the government. The system ensures that all citizens can receive free health care. Each National Health Service (England, Scotland, Wales and Northern Ireland) is mainly funded from general taxation and national insurance contributions) Some income is earned through treating patients privately and other minor services.
The NHS like other public sector organizations are owned and controlled by central or local government or public corporations and or its own business surplus or profits. These organisations play an important role in certain areas of business. The general public has access to the goods and services provided by the public organisations without exclusion as they are provided on a basis of need. These can be recognized the areas of education, health services, social services and public libraries

e) The Sole Trader Proprietor (5)
This is the most common form of business enterprise. A sole trader sets up his own business they are the only owners. They have unlimited liability, therefore face directly all of the risks. On the other hand all of the profits belong to them. To start trading all one has to do is to register the business name. Owners can choose times and patterns of work, therefore tend to be very flexible

P1.2 Tesco’s stakeholders include, Customers, Investors, Colleagues, Industry, Local communities Suppliers and other Groups
The importance of the stakeholders is demonstrated in this statement made by one of Tesco’s spokesman
“We know that we can’t achieve our ambitions alone. We need to work with our stakeholders to make sure we use our scale and expertise to contribute to society, as well as to find out what we are already doing well and where we can improve.”
Tesco’s has endeavoured to engage with its customers in multiple ways such as Twitter, customer question time events, surveys with ongoing trackers through loyalty programs. Creating special focus groups, making home visits, and through their customer services, Tesco also seek the opinions of their customers on new brands through scoring cards brand scorecard and Twitter. For every new store Tesco engages extensively within the community
For colleagues and employees Tesco undertakes anonymous annual surveys and through the enterprise social network it also does appraisals and career discussions through their colleague intranet sites network Yammer.
For their investors they have consultations with the socially responsible investment (SRI) community and a dedicated investor relations team.
For industry there are several industrial bodies including the British Retail Consortium, CBI, The Sustainability Consortium and the Institute of Grocery Distributors and co-chairing the sustainability steering group of the Consumer Goods Forum.
As far as suppliers are concerned there are commercial and technical managers who work directly with suppliers aided by the Knowledge Hub, which is a Producer Network and an anonymous Supplier Viewpoint questionnaire.
There are other stakeholder groups such as governments (politicians and policymakers), industry bodies, and key opinion formers, including NGOs, academics and think tanks. Tesco endeavours to establish regular engagement and partnerships, where appropriate, with the establishment of an expert advisory group. However, for each and every group strategies have been put into place to meet the relevant demands and expectations of these stakeholders. The main ambition of the company which prides itself in being one of the world’s leading retailers is to use this presence for the good of all, stakeholders included. Tesco’s ambition is to use its scale to help create opportunities for young people, improve health and reduce food waste. Tesco commits itself to engaging constructively, transparently and regularly with its stakeholders. Their aim is to make sure that focus, trust and efforts remain relevant, in the communities they serve. The company and its partners aim to deliver as much as they can for the good of society.
Tesco PLC is not only a place where people want to buy from, work at .It is a business that communities welcome and a retailer which every shareholder wants to invest in.

P1.3 Annual Report 2013

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Tesco plc is an organization that has a clear picture of its responsibilities and the strategies it employs to meet them. Tesco feels it is their responsibility to look after its employee’s necessities. Regular surveys help the company to do so. Its helps its employees to build their careers by through training centres and degree programs and filling positions through promotions , rather than recruiting outside of the organization. Tesco has set up salary level for its employees at more than 30% more than the poverty line index. Discounts on Tesco brand products helps Tesco employees to improve on their living conditions. Tesco’s responsibilities also lie with their customers. The company aims to give its customers the best products for the cheapest price, one of the reasons why Tesco is popular worldwide. The company’s bulk purchasing method helps Tesco to get discounts, which are then are passed on to the customer. A Tesco membership card also gives the customers discounts. The “Every Little Helps” strategy of Tesco keeps an extra step to help its customers. Tesco keeps this strategy on play by listening, understanding and by aiming to meet their needs. Tesco always try to take the necessary steps to protect the environment. Environmental friendly bags and environmental disposable methods are few of the strategies Tesco uses in order to be ECO friendly. Tesco “go green” policy also helps the organization to be Eco friendly at the same time send a message to the community to not to pollute the environment. The following are the goal Tesco has set itself in order to become more user friendly.
1) Becoming a zero-carbon organization by 2050
2) Reducing the emissions of the products we sell by 30% by 2020
3) Helping customers to reduce their carbon footprint by 50% by 2020
4) New stores built between 2007 and 2020 to emit half the CO2 of a 2006 new store
5) Reduce emissions per case delivered by 50% by 2012
In 2006 Tesco contributed 1.87% of its profit to the charities and local community organizations. Initiated in 1992 “Computers for schools scheme” getting vouchers from people who shopped at Tesco. In 2004 it was calculated that Tesco has given away equipment worth of £92 million. Since 2005”Tesco Cup” football tournament is organized annually by Tesco to recognize the talented footballers. These activities prove that Tesco has recognized its corporate responsibilities and they are taking the necessary steps to make sure they meet them.

For Tesco it as essential not only to be the shop of choice for customers but also the place people want to work, a business that communities welcome and the retailer in which every shareholder wants to invest.
Tesco is a company built around customers and colleagues with high-quality assets around the world and multiple opportunities for growth. These characteristics have become central to its vision for the business.
The changes made to its Core Purpose and Values reflect Tesco's wider social purpose which are clear signals of its responsibilities it feels towards the communities it serves.

P2.1 (6)
Free enterprise and command economies are two opposing economic models that dictate the methods in which economic production and growth should occur within an economy. Free enterprise economies allow individual supply and demand to set prices and production. Command economies have their economic production set by the decisions of a central government, and may also set the prices of goods for the consumer by the same methods
A transition economy as the term suggest is an economy which is changing from over from a centrally controlled economy to a free economy determined by market forces, which sets prices.
A mixed economy on the other hand is one which combines the elements of capitalism and socialism. Some capitalist countries, , employ what is often called state capitalism. In this form of a mixed economy, the state becomes a major shareholder in private enterprises. In the past this was frequent in the UK for example in public transport and energy companies.

P2.2 -----------
Governments control their nations' economies through fiscal and monetary policies. Fiscal policy involves government taxation and spending, while monetary policy involves actions to affect a nation's money supply. These policies affect all manner of business decisions including financial expansion. Fiscal policies often affect the level of taxation faced by business. If government raises taxes, businesses have less money for hiring and investment and might pass the increase on to consumers in the form of higher prices. Lower business taxes can stimulate investment spending and job creation.
Monetary policy exerts major effects on the overall economy, affecting the ability of businesses to obtain credit. An expansionary monetary policy leads to lower interest rates, easing access to credit. A contrary policy, however, reduces the money supply and makes it more difficult for firms to borrow.
Interest rates can affect the Tesco because if the interest rates were high then Tesco would not want to borrow as much money for expansion. Also if consumers had loans they would again have less disposable income to buy luxury items. If the minimum wage was brought down, this would mean more money for Tesco as they won’t have to pay their workers as much money but would also result in low sales from the consumers as their wages could go down and they might not be able to spend money their products. Also if the unemployment rate was high or the disposable income rate was low the potential customers may be forced to buy different products that are cheaper and that they need rather than desire

P2.3
The Shadows of the Law: Contemporary Approaches to Regulation and the Problem of Regulatory Conflict (7)
In 1999 the Competition Commission (CC) one of three UK enforcers of competition, investigated the UK supermarket sector. This was on the behalf of the Office of Fair Trading (OFT), which was in turn prompted by some concerns voiced by consumers, community and small suppliers groups. The market is regulated, and the monopolies and mergers commission has been monitoring the market to ensure fair competition
A legal case was started by a proposal from the Competition Commission, following its two-year inquiry into the £130bn grocery business. The new Competition test would force local planners to take into account the variety of supermarket operators in an area before giving the go-ahead for a new store. The test was seen as an attack on so-called "Tesco towns" – areas where almost all the major food outlets are owned by the UK's biggest retailer. UK Competition policy was introduced so that firms can compete with each other enabling consumers to get the best goods and services from the competing market. It was also introduced to enable markets to work better and achieve a good level of economic efficiency and welfare. The UK Competition policy provides an environment for competition to occur. It enables this in four ways; more efficiency for the economy, Lower prices for consumers, more innovation and promoting faster economic growth The impact of competition policy and other regulatory mechanisms on Tesco’s activities
The competition policy in the country dissuades collusions, seeks to guarantee free and fair competition among all companies and supports innovativeness with a view of creating an enabling environment for businesses to spur job creation and grow the economy. The law dissuades conglomeration, horizontal and vertical mergers, instead favoring the growth of many small companies. It outlaws efforts to control prices either through monopoly tendencies or through price fixing arrangements or contracts that attempt to create and capitalize on artificial shortages. The law outlaws tying contracts, reciprocal arrangements, and exclusive dealings between companies, when their actions seek to banish or disadvantage competitors. The laws follows violations with tough sanctions such as breaking up of conglomerates, awarding hefty fines, as well as slapping triple damages, lawyers fees, and court fees to offenders (Tesco PLC, 2012

P3.1
In a free market where there are many businesses and consumers. Where producers produce goods different from one another, there are no barriers to entry. In a monopoly market there is just one seller and competitors are barred from entry. Oligopoly markets have few sellers (e.g. Tesco). A firm in a perfectly competitive market cannot affect the market price of its product as price and quantity are determined by the intersection of demand and supply.
Demand is affected by prices, income, advertising, prices of other products, whilst supply by prices, income, advertising, prices of other products
There are different kinds of markets in different economies/sectors/goods. Accordingly, there are different kinds of output and pricing decisions which take place.. In perfectly competitive markets, a single firm is so small compared to the market that it cannot affect the prices. In that case, it must take the price as given, and then decide the quantity to be supplied. Price in this market is equal to the marginal cost of production. In monopoly, however, things are different. The monopolist can change the prices, as it is the sole provider of the good and thus has the market power. However, if the price increases quantity demanded decreases. Therefore, the monopolist must take under consideration both the positive and negative effects of increase in prices. In another market oligopoly, pricing is a bit more complicated and it depends upon the strategic interaction among the firms.

P3.2

4.1. Market Structures Influence Pricing, Output and Production Decisions. The market refers to the behaviour of individuals or organizations (firms) within a market context. In other words, market structure can be influenced by either the behaviour of sellers or buyers, although the classification of market structures is mostly done from the sellers’ point of view.
The pure competition market means that no single seller holds a more prominent position and has the ability to influence the market price. With the liberalization of the UK retail market, accompanied by the competition policy and other regulatory mechanisms mean that no particular retailer can manipulate prices to suit them. Tesco, Asda, Sanisbury and Morrisons, among other retailers, have adopted competitive pricing strategies, which emphasizes on uniform pricing, rather than price-fixing which involves “setting retail prices across different stores in different geographic areas in the light of competitive conditions, such variations not being related to costs” (Since the market (not businesses) sets the price, the sellers now have to alter their “variable input and output in the short run”. In other words, by influencing the price, market structure also influences output.

P3.3