M1- Analyse the implication of government policies for Tesco and the possible reactions of the business to government decisions.
What actions the Tesco would take based on the policies?
What the government expect the businesses to do?
Possible reactions of the businesses to the government policies?
What would businesses do for the changes the government makes?
Economical policy
Environmental policy health policy competition policy
The economical policy affects Tesco’s.
The possible changes the government could make are:

* A rise is co-operation tax * A rise in Interest rates
In order to take action Tesco’s could pass some of this tax to its customers charging higher prices for the goods/services.
If interest rates start rising, this could be a downfall for the business and customers will reduce their expenditure. This depends if Tesco’s takes a loan out if it is struggling but because Tesco’s is a global organisation, they probably wouldn’t need to.
If any of the problems do , the possible reaction may be that they may request the government to reduce tax/interest rates because businesses may not be able afford it and wouldn’t be doing as well as it was before.

The environmental policy affects Tesco’s.
Environmental concerns: * Carbon emissions * Sustainability * Complying with environmental laws
Tesco’s is working on reducing emissions by 2020 and they can do this by reducing carbon footprint of their supply chain by 30%.
Having sustainability in the business is better because you’re less likely to have a negative impact on the environment
Tesco’s may do this by having a wide range of suppliers to improve their supplier or may switch to suppliers that are more sustainable.
The health policy affects Tesco’s.
This policy requires every business to have a safe environment for their employees. Have good working conditions otherwise this will be a downfall for the business and no-one would want to work in that particular organisation such as Tesco’s, they could do this by making sure that if an employee is manual handling, they make that they know what they’re lifting up has a label to it cause it prevents the employee from getting any sort of injury if they don’t know what they’re picking up is heavy.
The competition policy affects Tesco’s.
This is because other retailers compete with each other on prices. If a product is cheaper in another market such as Asda then customers are more likely to spend in a market that offers products at good quality and at a cheaper price. This policy is mostly beneficial to the customer.
Sometimes it gets harder for businesses to stay on top of each other because there will be a variety of products that will be cheaper of both the businesses from one another. Some may be the same price and some may not. This can lead to benefits such as improved efficiency and good quality products. The competition Act only applies if the minimum annual turnover of businesses is £10 million and this does apply to Tesco.
But Tesco’s may also make losses because of the competitive prices. It recently did make a huge loss of £6.4bn.