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Ibt Sa Final

1. The debt crisis and Brexit negatively impacted the UK economy through financial contagion and currency depreciation. Several European countries like Greece and Portugal saw increased government debt loads during the crisis. The UK's decision to leave the EU through Brexit further weakened the British pound. 2. Tesco was affected by both the debt crisis and Brexit. The weaker pound raised costs for imports and forced Tesco to lower prices to compete, cutting costs and jobs. Exchange rate volatility also impacted customer purchasing power. Tesco responded by streamlining operations and converting some stores to smaller formats. 3. Tesco was prepared for the crises through cost control measures and flexible strategies. It downsized product packages while maintaining prices

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243 views3 pages

Ibt Sa Final

1. The debt crisis and Brexit negatively impacted the UK economy through financial contagion and currency depreciation. Several European countries like Greece and Portugal saw increased government debt loads during the crisis. The UK's decision to leave the EU through Brexit further weakened the British pound. 2. Tesco was affected by both the debt crisis and Brexit. The weaker pound raised costs for imports and forced Tesco to lower prices to compete, cutting costs and jobs. Exchange rate volatility also impacted customer purchasing power. Tesco responded by streamlining operations and converting some stores to smaller formats. 3. Tesco was prepared for the crises through cost control measures and flexible strategies. It downsized product packages while maintaining prices

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1. How did the financial contagion arise during the debt crisis and Brexit?

What role
did currency risk play in affecting economic conditions in the UK?
During the debt crisis, challenges such as Financial Contagion, as well as
occurrences such as the Great Recession and Limited Money Control, occurred.
Spain, Ireland, Greece, and Portugal are among the countries showing increased
debts. Even the Great Recession influenced the federal government's debt. As a
result, the government was forced to raise policy rates, and has an effect on their
debt.
In the United Kingdom, Financial Contagion has flared up. They did not join
the Eurozone because they kept their currency. Even though many British
citizens were impacted by these issues, the UK's currency rate deflated because
of the Brexit crisis. The aforementioned crisis had a significant impact on the
economy, leading to the United Kingdom's decision to leave the European Union,
which resulted in a rate increase in the Eurozone as well as a depreciation of
their currency. This is a major threat to the country. As a result, the
administration was displeased that the situation could deteriorate into chaos.
Following the United Kingdom's vote to leave the European Union, many
residents in the United Kingdom made their decisions, causing the pound to
fluctuate as citizens left the nation.

2. How did the European debt crisis and Brexit affect Tesco?
Exchange rate risk was a crucial factor in the UK's economic circumstances
because, as the currency decreased, firms were forced to adjust labor costs in
order to keep the economy stable. Tesco was impacted by the Brexit and debt
crisis because the Brexit guaranteed that the UK's border with the rest of Europe
would be tighter than it had been previously. In addition, the currency of the
British pound influenced customer since the pound was devalued. The value of
the pound decreased, making imports pricey. Tesco was obliged to lower its
pricing, slash costs, and lay off employees as customers shifted to cheaper
competition. Tesco has also developed immediate responses and initiatives
because they value their consumers. The management established their ability to
control the risks as a result of this.

3. What strengths does Tesco have that helped it ride out the debt crisis and
Brexit? What strategies did Tesco employ to respond to these events?
Tesco was prepared to face the financial crisis by balancing increases in its
procedures. They've lowered the sizes of goods while keeping the costs the
same. Tesco converted from a large supermarket to a convenience store. As a
result, deciding on urgent steps was difficult. However, with competent
management, they were able to come up with an effective solution to the debt
crisis and Brexit. Tesco also used trading strategies to lessen the impact of the
currency's deflation.

4. What recommendation would you make to CEO Dave Lewis to improve Tesco's
Performance?
I consider that one way to enhance Tesco's performance is to provide
customers with online choices for picking up their purchases, as well as reward
programs. Another aspect to note is encouraging staff to communicate with one
another. If the organization has a "open door policy," it has already taken the first
step in the correct manner. Creating a culture of truly open communication will
boost productivity because of improved workplace atmosphere. By increasing
communication, cooperation, and feedback, as well as between management
and employees. This will increase the flow of ideas, making the team more
productive. Another aspect is to keep customers in mind. Because quality
management is equally as vital as the company's overall efficiency. Customers
seek for alternatives for their wants and goals if a professional does not give a
high-quality product or service. As a result, the company would ask customers to
complete surveys or answer questions regarding the services they received.
Tesco will figure out what consumers want from them or which services they find
the most useful for their demands and objectives. Finally, develop a successful
business plan. Customer intimacy, operational efficiency, and leading edge may
all help a business be more successful and efficient. Client demands must be
satisfied through innovation and exceptional customer experiences. Tesco must
aim to offer a broad range of items and diversify its company by offering better
products and services.

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