• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

GCSE Applied Business Strand D Theory

Extracts from this document...


IDENTIFY THE MAIN EXTERNAL INFLUENCES ON THE TWO CHOSEN BUSINESSES, INCLUDING REFERENCE TO COMPETITORS, ECONOMIC CONDITIONS AND ENVIRONMENTAL CONSTRAINTS ASDA STORES LTD COMPETITORS As a large national supermarket, Asda has many competitors including Safeway plc, Wm Morrison Supermarkets PLC, J Sainsbury plc, Sommerfield plc and Tesco plc. These are all grocery retailers and Asda has many other competitors. http://www.competition-commission.org.uk/rep_pub/reports/2003/481safeway.htm#summary tells us that Tescos is the largest grocery retailer in the UK with Sainsbury's 2nd, Asda 3rd, Safeway 4th, Sommerfield 5th and Morrison's 6th. Asda faces national and local competition. National Competition refers to any business competing for the same customers, within the same nation. In Asda's case any businesses competing for the same customers within the UK (England Scotland and Wales); national competitors are the main competitors for Asda. Tescos, Sainsbury's, Safeway, Sommerfield and Morrison are the five main national competitors for Asda. Any supermarket in the UK is a potential competitor of Asda; however the larger supermarkets pose a bigger threat and therefore are bigger competitors to Asda. Local Competition refers to any business competing for the same customers, locally (within a few kilometres). Co-op, Tesco, Sommerfield, Sainsbury's, Morrison's, Rajas, Spar, Iceland, Waitrose, Costcutter, Bacton stores and Mace stores are just a few of Asda's local competitors. ...read more.


A monetary policy is when governments use interest rates to try to manage the economy. Interest rates are lowered making it cheaper to borrow money, but people do not get as much interest when they put money in the bank. This makes individuals and businesses borrow and spend more and save less. This increases spending and the same effect as in expansionary fiscal policies occur. Because individuals are spending more, there is a greater demand for products and so businesses will need to employ more workers to meet these demands. This decreases the unemployment rate, but increases the risk of inflation. Interest rates The GCSE Applied Business FOR OCR book, tells us "Interest is the cost of borrowing money" and http://www.google.co.uk/search?hl=en&safe=vss&defl=en&q=define:interest&sa=X&oi=glossary_definition&ct=title tells us that interest is "a fixed charge for borrowing money; usually a percentage of the amount borrowed". However, interest is also the reward for saving money. The interest rate is usually expressed as a percentage. An example of how interest would affect businesses borrowing money is that if a business were borrowing �1000 at an interest rate of 5% then they would be charged an extra �50 by the lender. ...read more.


When there is high inflation consumers may save more and spend less. Businesses find it hard to be as competitive during times of high inflation because they are forced to either raise their prices or achieve lower profits. Inflation is another economic external influence on Asda. The current rate of inflation is 2.8%. Exchange Rates www.rba.gov.au/Glossary/text_only.asp tells us that exchange rates are "The price of one currency expressed in terms of another currency (or vice versa)". Exchange rates are the cost of foreign currency. They exchange rate changes in the UK depending on whether the UK has a strong or weak pound. The effects of the strength of the pound are shown below. Strong Pound Weak Pound �1 = 2 Euros �1 = 1 Euro Good for the British that are travelling aboard Good for foreign Tourists Bad for businesses because exports are expensive Good for businesses because exports are cheaper Good for consumers because foreign goods are cheaper Bad for consumers because foreign goods are more expensive A strong pound has both advantages and disadvantages to businesses because although exports are expensive raw materials that have been imported are less expensive. When there is a strong pound this means that usually Britain will have fewer exports and more imports. ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Discuss the extent to which the economic theories in the Market's Reader can be ...

    new markets; Taking an early plunge into foreign markets; Establishment of its prestigious brand identity and distribution channels (in Asia, US and Europe); Risk-taking investment to distinguish it from rivals; Strong determination to produce something that is unique and technically challenging and last but not the least the visionary leadership of Ibuka and Morita.

  2. Macroeconomic Objectives and their impact on Business Activity

    However, it is often not possible to pass on the entire amount to the consumer, hence resulting in possible cuts to ASDA's profits. 5. Explain the structure of the Balance of Payments Accounts and assess the significance of surpluses or deficits.

  1. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    People must be well educated in what is right and what is wrong. After that, the Church believes that we are here for guidance. The decisions should be left up to the individual" (Vetter). Those who are looking for a moral backing against marijuana and other drug use should look elsewhere besides the Catholic Church.

  2. Morrison's and Safeway Acquisition

    consideration the impact on low income consumers without cars if more local shops are unable to compete as a result of any of the mergers under consideration. The Morrisons takeover of Safeway's has proven to be not in the public interest, therefore the Competition Commission has allowed the takeover to

  1. When Morrison took over Safeway who benefited?

    To achieve this profitability they try to have the most competitive prices and quality of goods to attract customers. The big supermarkets are doing all they can to be the strongest, by buying out their competitors and trying to grow bigger and stronger.

  2. Marketing Plan: Handywares Plc.

    Distribution channels already exist, trade barriers have been decreased, and financing is becoming easier to find, labour is more diverse and easier to find and language barriers are being lowered. EU integration Further EU development would make the Eastern Europe a much more attractive option.

  1. Transaction Cost Theory

    There is bounded rationality when there is imperfect ability to process the available information, and/or when the information itself is imperfect (i.e. there is uncertainty), both in relation to present and future events. Opportunism relates to how people will respond to conflicts, given the existence of bounded rationality.

  2. The effect of the Euro on 'The Carphone Warehouse' Plc

    There are a both benefits and constraints, upon the businesses. Follows are the key points that the company must bear in mind when considering the Euro's effects. Benefits ? Creates more overall economic stability The fundamental advantage of the introduction of the Euro is that the company will enjoy greater

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work