Unit 1 - P6

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Know how political, legal and social factors impact on business The sales of goods act gives consumers rights to compensation if a product they buy is not fit for purpose, but as described or not a good enough quality for example Aldi have alleged Tesco that they have misled customers in its in store campaign by failing to compare like with like. For example ‘’Tesco’s non vintage claret 4euro was contrasted with Aldi’s vintage claret at 4.99. Aldi sued the supermarket giant alleged trademark infringement but the case has settled ahead of the 8 day hearing scheduled for next week. Tesco have agreed to pay Aldi 150 thousand euro damaged and has been given undertakings not to engage in misleading comparative advertising having regard to a whole host of criteria such as the quality, nature and origin of a product.’’ How is Tesco affected by the government changes? Government creates the rules and frameworks in which businesses are able to compete against east other. From time to time the government will change these rules and frameworks forcing businesses to change the way they operate. Business is therefore keenly affected by government policy. The key area of government economic policy is the role that the government gives to the state in the economy. Between 1945 and 1979 the government increasingly interfered in the economy by creating state run industries which usually took the form of public corporations. However, from 1979 onwards we saw an era of privatization in which industries were sold off to private shareholders to create a more competitive business environment. Taxation policy affects business costs for example a rise in corporation tax (on business profits) has the same effect as an increase in costs. Businesses can pass some of this tax on to consumers in higher prices, but it will also affect the bottom line. Other business taxes are environmental
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