Potential macro and micro environmental changes
In order to analyse the macro-environmental changes for Tesco Plc, it is essential to analyse the external factors which will help in identifying the macro-economic factors which will affect the company possibly in the future. These are linked to the general business cycle in identifying the performance of the business in future:
Gross Domestic Product
The gross domestic product is an economic measure of the output of the country and the production of goods and services in the economy, which provides a broad overview of the growth of a country (Ulubeyli et al., 2021). The GDP of the UK and other countries where it functions have a significant influence on the corporate profits of Tesco PLC, which develops a measure of the company’s comprehensive economic productivity. Hence it is essential to state that due to the covid-19 pandemic, the GDP of the UK has been fluctuating since 2020 from a negative figure to positive at 5.5% in 2021. Hence, the gross domestic product in the current and in the future would affect Tesco PLC’s performance.
Monetary and fiscal policies
The monetary policy, which is decided by the government, is a key factor that influences the macro environment in the United Kingdom. The monetary policy is a measure that centres around the interest rates and access to credit. Therefore Federal interest rates are one of the main providers of monetary policy tools (Dashutina and Litvinova, 2021). This will affect the activities of the company where they borrow from each other at a rate which is known as a base rate for all the credit activities in the market. Hence the tightening of monetary policy or an increase in the base rate can have a significant impact on the organisation’s future activities. Similarly, the fiscal policy of the government relates to taxation and borrowing, where high tax rates can reduce the business incentive to work and save (Ulubeyli et al., 2021). Hence, the Government policies in order to stimulate economic activity will affect Tesco PLC performance in the future.