Political Impacts

Political stability is usually defined as the state of peace that is normally experienced in a country from the activities from the government and also the government in this situation will make decisions and keeping best interests in mind for people. Government initiatives are when the government can support business through grants and tax reductions.

The government have their own initiatives for companies like Asda and these are the health eating and fit for life. These are campaigns that Asda will try to support then try to receive more funding from the government for advertising etc.

Also when the government chooses investment finance this then involves selling part of your business shares to an investor. The investor will then take a share of any profits or losses Asda make. The government may change the tax rates up or down in an effort to try an boost the economy. An example of this is VAT which means all non-food will need their labels changing which could potentially increase profitability.

`The international monetary fund describes itself as ‘an organisation of 188 countries that works to foster global monetary cooperation. It also works to secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Legal Impacts

The legal impacts are that Asda must follow the law. The legal frameworks is where the business chooses the way it operates. This will determine who has what role and share to the business. It will also determine relationships between investors and employees etc.

Consumer protection is when a group of laws and organisations have to ensure that the rights of a consumer are put in place to hopefully prevent businesses that are engaging in fraudulent activities etc. An example of consumer protection is the Trade Description Act. This is where the product must be described accurately otherwise it can cause an issue. It is really important that Asda describe the product well and accurately if not then the trading standards will have no choice but to get involved.

Employee protection is essential in a business. Health and safety standards are the most important. New employees will partake in an induction day before they can start a full time job. They will be shown around the premises and where they can and can’t go within the company.

Social Impacts

Over time many changes take place in society which are relevant for business organisations. One change is demographic issues. When the population of a country is growing, there is an increase in demand for goods and services, the numbers of people making themselves available for work. This means Asda could potentially increase in their profits as population is growing so there is a possibility of gaining more customers. There have also been changes in structure as the number of older people in Britain is increasing. People tend to save when they are young and spend their savings when they are older so this also could increase profits also for Asda if they spend more in their stores.

The average age of marriage is increasing and many people now live alone. Many single people are high income earners. This shows that the standard of living has increased. As it has increased it means they are likely to spend more money on food which is great for Asda as their profits increase.

Male and female roles have been shifting as today 50% of the working population is female. The changing of gender roles has had a massive impact on consumption patterns. For example the rapid rise in the ready meals market is mainly because of families where both parents are working. This is ideal for Asda to gain more profits by stocking up on a lot of ready meals.

Britain consists of many religious groups. Each religious group has its own beliefs and values. These beliefs can affect the types of goods that customers purchase and, and behaviours in the workplace. It is important that employers are familiar with these religious requirements so they can make appropriate allowances. Asda need to apply similar sensitivities to products or materials that people of different religions may touch and handle.

Business ethics are the values and principles held by those that run businesses. Ethics help to shape the actions of a business and the decisions it makes. Ethic principles should go beyond legal requirements. Key ethic issues include fair trade. This is offering fair prices to suppliers often in poor countries. Also not leading customers and cheating them in any way and providing them with what is good and useful to them.