Nature of UK Economic System 2017

 Emma Zoe
  May 09, 2017

The economic system of the nation or the market is having a greater influence over the functioning of the organization. In business environment of an organization like Tesco the economic system plays a major role. The organization Tesco which operates in Assignment Help UK follows a mixed economic system. Under this economic system both the state and the public have an influence over the economy. This economic system practices free entrepreneurial operations, but there will be some government interventions, controlling and monitoring.

This mixed economic system provides opportunities for the organizations like Tesco to be innovative and to exhibit differentiated products and services to the customers. Under this system Tesco can exhibit products preferred by the customers and can make profits. The government intervention and the regulation will shape this innovation so as to maintain a stable market. Tesco can freely allocate resources under the mixed economic system in UK as there is free trade and government regulations. Tesco could also efficiently implement its policies and procedures in this economic system by adhering with the government policies and regulations. Since the influence of the customer and the public is very high under mixed economic system Tesco has to provide priority to the preferences of the customer, their buying power, potential etc. This economic system has supported the growth of Tesco.

UK Economics system - Assignment Help UK

Assess the impact of fiscal and monetary policy on businesses and activities

Fiscal and monetary policies are the macroeconomic policies introduced by the government to achieve economic stability, increasing productivity, employment opportunities etc. Fiscal policies involves the policies which handles the expenditure of the government, taxation etc which can influence the economic behaviour and its growth. Monetary policies are the approaches through which the government of the nation controls the economy through stabilizing the money supply. The impact of these macroeconomic policies over Tesco are analyzed here

  • The changes in the interest rates as per the monetary policies can affect the business operations of Tesco. If the interest rate increases the financing of Tesco may get affect which can affect the production. If the interest rate decreases then it can impact positively.
  • Violation in the reserve requirement as per the monetary policy can generate fluctuations in the interest rates which can impact Tesco’s smooth business operations.
  • The increase in the tax rate as per fiscal policies can affect the marketing and promotional activities of the Tesco; whereas the decrease in the same can increase the productivity of the organization.
  • The increase in the government spending can reduce the sales volume of Tesco where as the reduction in the same can enhance the demand for the organization like Tesco.

The macro environmental policies can provide benefits as well as risks for the organizations like Tesco. It remains in the hand of the management to handle the macroeconomic policies efficiently.

Evaluate the impact of competition policy and other regulatory mechanisms in the UK

The main objective of the competition policy is to ensure that the competition in a market place is controlled but not in a way which can harm the welfare of the society. The competitive policies and the other regulatory mechanisms are justified by the market failures, although they have different procedures and control rights. The competition policies and other regulatory mechanisms can restrict an organization from achieving competitive advantage through harming the society by the activities like collusion, exclusionary behaviour etc. The impact of such policies in UK on the business operations of Tesco is evaluated.

  • The competitive law of the European Union like the equal access to resources can provide a secured and credible supply of resources to Tesco. But it sometimes can affect the competitive advantage.
  • Tesco is in an industry which has a high degree of competition. These competitors will have their own competition policies. If they make any changes in their policies to achieve competitive advantage then it can impact Tesco.
  • The changes in the standards and guidelines put forward by the regulatory can also impact the operations of Tesco. For example, if the legislation introduces any new quality standards, then Tesco will have to get supply of resources which meets those standards. This can sometimes affect the cost of production of Tesco

Hence the competition and the regulatory mechanisms can benefit and control the operations of Tesco, but sometimes these policies can put the organization into trouble.

Nature of UK Economic System 2017

Emma Zoe

Emma Zoe is a Professional Writer at HND Business Assignment Help, She writes on many interesting educational topics like Technology, management, business, human resource and more topic for helping students in their assignment writing

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