Distinction 2

Evaluate how future changes in the legal, social and political factors may impact on the strategy of a specified organisation such as Tesco in the UK or China.

As Tesco are an international company, they are always going to be faced with new legal, social and political factors that will affect the running of their business. In this assignment I am going to explain the possible legal, social and political factors that Tesco could be affected by in the UK and China.

Legal Issues

Firstly, after the discovery of horsemeat in processed beef products in several supermarkets in the UK, it is expected that the Food Standards Agency (FSA) are going to make stricter food regulations. This could involve retailers checking the authenticity of their food products. As Tesco UK were one of the supermarkets where horsemeat was apparent they may have to evaluate the supply chain of their food products more efficiently. This is going to affect Tesco as they would have to spend money on testing their products. Furthermore, because of the horsemeat scandal Tesco’s customers may no longer trust their organisation and therefore shop elsewhere. To avoid this from happening Tesco could test their meat products on a regular basis in turn providing evidence to all of their customers that their food products do not contain any traces of horsemeat.

Moreover, as resources are becoming even more strained as the years progress I think laws such as the Packaging (Essential Requirements) Regulations 2003 are going to become stricter. As a result of this Tesco will have to decrease the amount of resources they use when packaging all of their products. This may affect one of Tesco’s seven - part strategy, ‘to be a creator of highly valued brand’. As the packaging of a number of brands Tesco provide is the key to noticing the product, a stricter packaging regulation may prevent Tesco from ensuring their customers are aware of certain brands.

Social Issues

A social issue affecting Tesco would be life expectancy. In March 2012 the Office for National Statistics reported that the proportion of the UK population aged 16 and under had dropped from 25% in 1971 to 19% in 2010. However, the proportion of people aged 65 and over rose from 13% in 1971 to 17% in 2010. I would say that the life expectancy of the younger generation is going to continue decreasing. As a result of this Tesco’s strategy is going to be affected, because the majority of the older generation is unaware of how to use devices such as computers and mobile phones, therefore fewer people will be able to access a