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How external factors can affect the ability of Tesco achieving its aims and objectives

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Introduction

How external factors can affect the ability of Tesco achieving its aims and objectives As well as internal factors there are also a number of external factors which can affect how a business prospers. Unlike internal factors companies have no control over external factors and have to try and adjust to them. A good company will make provisions for external factors changing in order to lighten the blow when they do change, but no company can ensure their measures will suffice. External factors could be the factors which makes a business fail so are just as important if not more important than internal factors. Therefore it is vital that companies pay close attention to changes in external factors and adjust accordingly to them or they could lose their competitive position. There are many external factors which affect Tesco Monaghan including: * Cross border bank holidays * National Income * Legal Issues * Interest rates * Loom of recession (unemployment) * Bad external publicity * Strength of the Pound against the Euro (Exchange Rates) * Location * Ethical views (Climate change, Fair trade) * Nearby parking facilities (Externally owned) * Competition Cross Border Holidays Tesco Monaghan is located in Monaghan town which is part of the Republic of Ireland, however much of the nearby surrounding area is located in Northern Ireland as the diagram below illustrates: For illustration purposes I have highlighted Northern Ireland by using yellow, any area not in yellow is located in the Republic of Ireland. As you can see from the illustration shown above lots of the surrounding area is located in Northern Ireland. In fact part of Northern Ireland is just 6 miles outside Monaghan. This gives you an idea of the number of people from Northern Ireland who may visit Monagahan. As Northern Ireland is part of the UK they have different bank holidays than the Republic of Ireland. ...read more.

Middle

People look for much cheaper alternatives and cannot afford to purchase products that would normally be classed as a luxury. -So what affect can Loom of a recession have on Tesco Monaghan? Currently Ireland is actually in a state of economic recession and the effects are already apparent. Companies all across Ireland have closed and more and more people are becoming unemployed everyday. More people in Ireland are now more dependent on the Government than ever before as it has become so difficult to find a job. In fact Century Homes which is also located in Monaghan has paid off a large number of employees and now operates on a 3 day week. As a result of the current recession in Ireland the unemployment level is at around 7% and is the highest level seen in Ireland in over 10 years. The recession in Ireland is also worsening with unemployment levels steadily increasing and no signs of an upturn in the economy apparent. As a result of this recession in Monaghan alone customer spending has been severely cut with the majority of people only purchasing their basic requirements. Car and house sales are basically at a standstill and banks are not lending money as easily. In order to compete with the recession and accommodate the needs of the customer Tesco Monaghan has also had to/will have to make changes. Firstly in order to reduce their own costs to try and sustain their profits Tesco Monaghan has made staffing cuts. I have a friend who has been working part-time in Tesco for the last two years and he has recently been paid off. This will mean that people working at Tesco Monaghan will lose their jobs and become unemployed. Tesco Monaghan will also have to take an in-depth look into customer trends and their product range offered. As people will have less money to spend they will be purchasing cheaper alternatives so it is vital that Tesco are offering such products at an affordable price for customers with little money to spend. ...read more.

Conclusion

For instance if Dunnes Stores reduces the price of a certain product to attract customer attention then Tesco Monaghan will try and match or better the price. Even though Tesco Monaghan may not be making a profit on that product they must still try and gain the customer's purse and compete for it. Therefore in order to try and maximise profits, deliver unbeatable value to customers and earn their lifetime loyalty Tesco Monaghan must spend time and money keeping a close eye on the actions of their competitors. Tesco Monaghan regularly sends a member of staff around their competitor's stores in order to gain pricing information. It is this collected information which has a direct impact on the actions of Tesco Monaghan. If Tesco Monaghan did not keep an eye on the competition then their aims and objectives would be greatly affected. For instance if they did not try and match or improve on product prices they would not be 'delivering unbeatable value'. If they did not try and match prices then they may lose customers to the cheaper prices. As well as keeping a close eye on competitors price changes and promotions Tesco Monaghan also keeps an eye on other factors, such as services provided. These factors if not matched or bettered by Tesco Monaghan may result in Tesco losing 'Lifetime loyalty of customers'. For instance if LIDL opens later than competitors then customers may take advantage of this and favour LIDL more. Also for instance if staff are friendlier in another store the customers may shop there as they feel they are getting a better service. Therefore it is vital that Tesco Monaghan keep a close eye on all the actions of their competitors and ensure they are combating them. Online shopping has enabled Tesco Monaghan to compete very well with other stores in Monaghan. Home delivery also gives them a competitive advantage over their rivals. Competitive advantage is necessary when similar goods are sold in a number of retail outlets. ...read more.

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