Unit: 1 Exploring Business
Learning Aim C+D
Contents
P4 Discuss the effect of internal, external, and competitive environment on a given business..........5
Introduction.........................................................................................................................................5
1
, C1 External environment.....................................................................................................................5
Political Factors....................................................................................................................................6
Government.........................................................................................................................................6
Brexit...................................................................................................................................................6
Legislation............................................................................................................................................7
Government.........................................................................................................................................7
Economic environment........................................................................................................................8
Interest rates.......................................................................................................................................8
Financial Crisis......................................................................................................................................8
GDP......................................................................................................................................................9
Exchange Rates..................................................................................................................................10
Covid 19.............................................................................................................................................10
Social Factors.....................................................................................................................................11
Demographic.....................................................................................................................................11
Vegan Trend.......................................................................................................................................11
Technological Factors........................................................................................................................12
Automation of Processes...................................................................................................................12
Consumer behaviour.........................................................................................................................12
Improved methods of communication..............................................................................................12
Legal Factors......................................................................................................................................13
Laws and Regulations.........................................................................................................................13
Groceries Supply Code of Practice: GSCOP........................................................................................13
Health and Safety at work Act 1974...................................................................................................13
Environmental...................................................................................................................................13
The Climate Change Act 2008............................................................................................................14
Carbon emissions...............................................................................................................................14
C2 Internal Environment....................................................................................................................14
Corporate culture..............................................................................................................................14
Corporate social responsibility (CSR), ethics......................................................................................15
Salary.................................................................................................................................................15
C3 Competitive environment.............................................................................................................16
Competitive Influences......................................................................................................................16
Market share.....................................................................................................................................16
2
, Differentiation...................................................................................................................................17
Pricing Policies...................................................................................................................................18
P5 Select a variety of techniques to undertake a situational analysis of a given business.................20
Introduction.......................................................................................................................................20
Strengths............................................................................................................................................21
Weakness...........................................................................................................................................21
Opportunities.....................................................................................................................................23
Threats...............................................................................................................................................23
Porters 5 Forces.................................................................................................................................24
Power of suppliers.............................................................................................................................24
Power of customers...........................................................................................................................24
Competition rivalry............................................................................................................................25
Threat of New Entrants......................................................................................................................25
Threat of Substitutes.........................................................................................................................25
M3 Assess the effects of the business environment on a given business..............................................26
Introduction.......................................................................................................................................26
Internal Factors..................................................................................................................................26
External Factors.................................................................................................................................27
Learning Aim D Examine business markets........................................................................................30
Introduction.......................................................................................................................................30
P6 Explore how the market structure and influences on supply and demand affect the pricing and
output decisions for a given business................................................................................................30
D1 Different market structures..........................................................................................................30
Monopoly..........................................................................................................................................30
Oligopoly............................................................................................................................................30
Duopoly.............................................................................................................................................30
Monopolistic competition..................................................................................................................31
Market structure................................................................................................................................31
D2......................................................................................................................................................31
Relationship between demand, supply, price....................................................................................31
Demand.............................................................................................................................................31
Supply................................................................................................................................................32
Logistics.............................................................................................................................................32
Demand.............................................................................................................................................32
3
, Financial Crisis....................................................................................................................................32
GDP....................................................................................................................................................33
D3 Pricing and output decisions........................................................................................................34
PED....................................................................................................................................................34
Price Elasticity of Demand.................................................................................................................34
Inelastic Demand...............................................................................................................................34
Elastic Demand..................................................................................................................................35
Perfect vs Imperfect competition......................................................................................................35
Imperfect Competition......................................................................................................................35
M4 Assess how a given business has responded to changes in the market...........................................35
Introduction.......................................................................................................................................35
Factors...................................................................................................................................................36
D3 Evaluate how changes in the market have impacted on a given business and how this business may
react to future changes..........................................................................................................................37
Introduction...........................................................................................................................................37
Learning aim C: Examine the environment in which businesses operate..........................................40
Appendix 1.........................................................................................................................................40
Appendix 2.........................................................................................................................................40
Appendix 3.............................................................................................................................................41
Appendix 4.........................................................................................................................................41
Learning aim D: Examine business markets.......................................................................................42
Appendix 1.........................................................................................................................................42
Inelastic demand................................................................................................................................42
Appendix 2 – Inelastic Demand..........................................................................................................42
Learning aim C: Examine the environment in which businesses
operate.
P4 Discuss the effect of internal, external, and competitive
environment on a given business.
Introduction
Tesco is an retail and grocery sector company in the UK. It has a large market share in the UK and it is a
multinational company in the UK. However, its main operations are in the UK and it has 360,000
employees and it effects UK national consumers on a daily basis such as the service in groceries and
petrol pumps which serve the consumers by fuelling and grocery services. This company Tesco was
established 1919 in East London and then it became a national company in the 21 st Century which is
4
Learning Aim C+D
Contents
P4 Discuss the effect of internal, external, and competitive environment on a given business..........5
Introduction.........................................................................................................................................5
1
, C1 External environment.....................................................................................................................5
Political Factors....................................................................................................................................6
Government.........................................................................................................................................6
Brexit...................................................................................................................................................6
Legislation............................................................................................................................................7
Government.........................................................................................................................................7
Economic environment........................................................................................................................8
Interest rates.......................................................................................................................................8
Financial Crisis......................................................................................................................................8
GDP......................................................................................................................................................9
Exchange Rates..................................................................................................................................10
Covid 19.............................................................................................................................................10
Social Factors.....................................................................................................................................11
Demographic.....................................................................................................................................11
Vegan Trend.......................................................................................................................................11
Technological Factors........................................................................................................................12
Automation of Processes...................................................................................................................12
Consumer behaviour.........................................................................................................................12
Improved methods of communication..............................................................................................12
Legal Factors......................................................................................................................................13
Laws and Regulations.........................................................................................................................13
Groceries Supply Code of Practice: GSCOP........................................................................................13
Health and Safety at work Act 1974...................................................................................................13
Environmental...................................................................................................................................13
The Climate Change Act 2008............................................................................................................14
Carbon emissions...............................................................................................................................14
C2 Internal Environment....................................................................................................................14
Corporate culture..............................................................................................................................14
Corporate social responsibility (CSR), ethics......................................................................................15
Salary.................................................................................................................................................15
C3 Competitive environment.............................................................................................................16
Competitive Influences......................................................................................................................16
Market share.....................................................................................................................................16
2
, Differentiation...................................................................................................................................17
Pricing Policies...................................................................................................................................18
P5 Select a variety of techniques to undertake a situational analysis of a given business.................20
Introduction.......................................................................................................................................20
Strengths............................................................................................................................................21
Weakness...........................................................................................................................................21
Opportunities.....................................................................................................................................23
Threats...............................................................................................................................................23
Porters 5 Forces.................................................................................................................................24
Power of suppliers.............................................................................................................................24
Power of customers...........................................................................................................................24
Competition rivalry............................................................................................................................25
Threat of New Entrants......................................................................................................................25
Threat of Substitutes.........................................................................................................................25
M3 Assess the effects of the business environment on a given business..............................................26
Introduction.......................................................................................................................................26
Internal Factors..................................................................................................................................26
External Factors.................................................................................................................................27
Learning Aim D Examine business markets........................................................................................30
Introduction.......................................................................................................................................30
P6 Explore how the market structure and influences on supply and demand affect the pricing and
output decisions for a given business................................................................................................30
D1 Different market structures..........................................................................................................30
Monopoly..........................................................................................................................................30
Oligopoly............................................................................................................................................30
Duopoly.............................................................................................................................................30
Monopolistic competition..................................................................................................................31
Market structure................................................................................................................................31
D2......................................................................................................................................................31
Relationship between demand, supply, price....................................................................................31
Demand.............................................................................................................................................31
Supply................................................................................................................................................32
Logistics.............................................................................................................................................32
Demand.............................................................................................................................................32
3
, Financial Crisis....................................................................................................................................32
GDP....................................................................................................................................................33
D3 Pricing and output decisions........................................................................................................34
PED....................................................................................................................................................34
Price Elasticity of Demand.................................................................................................................34
Inelastic Demand...............................................................................................................................34
Elastic Demand..................................................................................................................................35
Perfect vs Imperfect competition......................................................................................................35
Imperfect Competition......................................................................................................................35
M4 Assess how a given business has responded to changes in the market...........................................35
Introduction.......................................................................................................................................35
Factors...................................................................................................................................................36
D3 Evaluate how changes in the market have impacted on a given business and how this business may
react to future changes..........................................................................................................................37
Introduction...........................................................................................................................................37
Learning aim C: Examine the environment in which businesses operate..........................................40
Appendix 1.........................................................................................................................................40
Appendix 2.........................................................................................................................................40
Appendix 3.............................................................................................................................................41
Appendix 4.........................................................................................................................................41
Learning aim D: Examine business markets.......................................................................................42
Appendix 1.........................................................................................................................................42
Inelastic demand................................................................................................................................42
Appendix 2 – Inelastic Demand..........................................................................................................42
Learning aim C: Examine the environment in which businesses
operate.
P4 Discuss the effect of internal, external, and competitive
environment on a given business.
Introduction
Tesco is an retail and grocery sector company in the UK. It has a large market share in the UK and it is a
multinational company in the UK. However, its main operations are in the UK and it has 360,000
employees and it effects UK national consumers on a daily basis such as the service in groceries and
petrol pumps which serve the consumers by fuelling and grocery services. This company Tesco was
established 1919 in East London and then it became a national company in the 21 st Century which is
4
