P6. Different business environments in the UK and China
In this section of the assignment I will be speaking about how Tesco is affected in terms of the
different business environments in the UK and China. The business environment will be sub-
sectioned into legal, political, social and economic factors. This information will include how the
company varies in the two countries in terms of its business activities (recruitment of staff, product
design and transport of goods). I will select three of the most influential social features in each
country and discuss how they affect the business in the two very different business environments.
Tesco in the UK
Political Factors:
Tesco’s business activity can be deeply affected by political factors in the UK:
One of these factors are called corporation tax. Businesses pay this tax on all taxable business
profits. The corporation tax in the UK is currently 20%. This means that Tesco in the UK will get
taxed 20% of all of their taxable profits. In 2015, Tesco made (£m) 6,376 profit/(loss) before tax.
The taxation for 2015 was £657m – (1). Tesco have to price their products according to the
corporation tax of the country in which they operate in, if the tax in the UK went from 20% to
21% then the company would be forced to increase the prices of their products as if they didn’t
then they would lose a lot of money in the form of profits.
Another factor is known as import and excise duty. Import duty is when a country places tax on
things which are imported into the country. Tesco is affected by this as some of their stock is
imported from countries mainly located in eastern Asia. This is a common practice for big name
companies as eastern Asian countries, mainly China, have cheaper labor and the conditions are
fewer than that of the UK. Happily, the UK import tax for Tesco products is 0%. - (2). Excise duty
is a duty which is put on different products and varies with different countries. An example for
this would be the fact that Tesco imports fuel and has functional petrol stations. Excise duty would
be placed on this product.
Legal Factors:
In this section of the assignment I will be speaking about how Tesco is affected in terms of the
different business environments in the UK and China. The business environment will be sub-
sectioned into legal, political, social and economic factors. This information will include how the
company varies in the two countries in terms of its business activities (recruitment of staff, product
design and transport of goods). I will select three of the most influential social features in each
country and discuss how they affect the business in the two very different business environments.
Tesco in the UK
Political Factors:
Tesco’s business activity can be deeply affected by political factors in the UK:
One of these factors are called corporation tax. Businesses pay this tax on all taxable business
profits. The corporation tax in the UK is currently 20%. This means that Tesco in the UK will get
taxed 20% of all of their taxable profits. In 2015, Tesco made (£m) 6,376 profit/(loss) before tax.
The taxation for 2015 was £657m – (1). Tesco have to price their products according to the
corporation tax of the country in which they operate in, if the tax in the UK went from 20% to
21% then the company would be forced to increase the prices of their products as if they didn’t
then they would lose a lot of money in the form of profits.
Another factor is known as import and excise duty. Import duty is when a country places tax on
things which are imported into the country. Tesco is affected by this as some of their stock is
imported from countries mainly located in eastern Asia. This is a common practice for big name
companies as eastern Asian countries, mainly China, have cheaper labor and the conditions are
fewer than that of the UK. Happily, the UK import tax for Tesco products is 0%. - (2). Excise duty
is a duty which is put on different products and varies with different countries. An example for
this would be the fact that Tesco imports fuel and has functional petrol stations. Excise duty would
be placed on this product.
Legal Factors:
