Tesco's Business Environment Analysis

This assignment requires a comprehensive analysis of the business environment impacting Tesco plc. Students must examine various factors like political, economic, social, technological, legal, and environmental influences (PESTLE) shaping Tesco's operations and future prospects. The analysis should identify key challenges and opportunities presented by this dynamic business landscape.

UNIT 1 BBE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
LO1.............................................................................................................................................1
P1. Overview of the various types of organisations and the growth of the international
business market...........................................................................................................................1
P2. Details of the organisation and products and services they provide along with the mission,
vision and business objectives and information about the stakeholders.....................................3
LO3.............................................................................................................................................4
P3. Functions of the organisation and its interrelation with organisational objectives and
structures.....................................................................................................................................4
TASK 2 ...........................................................................................................................................6
LO3.............................................................................................................................................6
P4. Identify various macro factors that can affect the operations of the Tesco plc with its
negative and positive impact using the PESTLE analysis..........................................................6
LO4.............................................................................................................................................8
P6. SWOT analysis of the company to identify its relation with external macro factors.........10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The business environment plays a very crucial and important role for conducting
operations of a business. The effective environment of the work place will motivate the
employees to perform better and achieve their target and goals in a more elaborative and efficient
manner. The organisation taken into context for this report is Tesco plc. It is a retail firm that is
based in UK. In the report, various types of organisations and their purposes based on public,
private and legal structure has been taken into consideration (Apăvăloaie, 2014). Various details
about the vision, mission and business objectives with the details of the stakeholders has been
covered. Also, the interrelation of the various operations in an organisation will be discussed.
Moreover, PESTLE analysis will be carried out to identify the macro factors. In addition,
internal and external assessment has been carried out and SWOT analysis has been done to get
an idea of the strengths and weaknesses of the company.
TASK 1
LO1
P1. Overview of the various types of organisations and the growth of the international business
market.
The business environment plays a very significant role in the operations of the
organisation like Tesco plc. Various factors have been taken into consideration and are been met
to have a better growth on the international level. Different types of the organisations are:
 Private sector: Their vision and mission are to generate the best of the services and get
better profitability to increase and expand their business operations. They are usually
owned by individuals and growth factor is very high. They are the major job generators
and give a good part of their profit for the social causes (Armstrong and et.al., 2015). The
major examples of the private sector companies are Tesco plc, Morrison, Asda etc. They
majorly work for the development of their business firm and to gain better market share.
They provide the basic services like retail, groceries, clothing etc. that are being taken
into consideration by the companies for better growth of their business. Their scope of
growth on the international market is comparatively high as compared to other companies
or organisations of the various sectors. Also, they cater the larger number of customers in
a nation and helps in the social and economic growth of the country.
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 Public sector: The vision and mission of the public-sector company is to cater and work
for the benefit of the people or the citizens in a locality or the country. Their main goal is
to provide their best quality of services to the customers on the minimal cost. They will
usually work in the areas or the sectors of the industries that affect the larger number of
people like health and social care (Bah and Fang, 2015). They will collaborate with the
government to get the best of the support to run their operations. The example of the
public-sector organisations are NHS etc. They will work for the betterment of the health
and social conditions in the society. Also, they will provide the effective health services
on negligible or minimal cost so that everyone can get benefit from it. Many times, their
operations are being funded by the local or national government. They usually work on
the local or national level but can interact with the international organisations to improve
and implement new and better health services.
 Voluntary sector: The organisations of the voluntary sectors work on the personal level,
making them help to the organisation that will help them to increase their internationality.
Their main motto is to provide better services to the people. This will help them to gain a
better productivity and innovate newer services that will help them to gain a better market
share (Botha, Kourie and Snyman, 2014). This will help them to gain high productivity as
well. The voluntary sector will help the employees who are pioneer in their respective
fields and come together to have a better share of the market. Various organisations
working in the voluntary sectors are British Heart Foundation, Oxfam etc. They help to
gain better services and products to the customers to improve their quality of living and
make their life comfortable.
 Legal sector: The organisations of the legal sectors work for the better running of the
legal operation in the country and provide people with legal help, when in need. They
will be associated to the legislation and will look after various sort of cases (Charter,
2017). The major organisations that work in the legal sectors are Solicitors group,
Industrial Law Society etc. They will see through the legal matters of an organisation or
an individual and provide suitable legal aid.
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P2. Details of the organisation and products and services they provide along with the mission,
vision and business objectives and information about the stakeholders.
Various organisations have been taken into context and their operational capacity has
been discussed. The details of the various organisations that are being taken into consideration
are
 Private sector: The major aim or vision of the company is to provide the best of the
services in the retail to its customers in the good quality and on minimal and reasonable
prices. Tesco plc usually works in the retail sector along with other services like Tesco
express (Doh, McGuire and Ozaki, 2015). The company mainly deals in clothing,
groceries and food items along with their other house hold products that are being sold
on its outlets. The business firm also deals in the food products. The stakeholders of the
company are majorly its customers, investors, distributors, suppliers and employees.
 Public sector: In the public sector, we have chosen NHS for example. NHS is a health
and social care firm that look after the health care services in UK. They work for the
improvement and sustainability of the health conditions in the country and works with
the support of the local as well as the national government that look after the health and
social well-being of the citizens (Georgescu and Popescul, 2015). Their main vision and
mission objective is to gain a better idea about the health and social needs of the people
and provide them with the best of the services or products to maintain the social and
cultural well-being of the society. It stakeholders are usually the employee's, investors,
suppliers etc. Along with it, the government also act as a part of it.
 Voluntary sector: The organisation's working for the voluntary sectors will be not
owned by single individual or a group of people. It helps the company to have a better
share of the market and also work for the betterment of the society or people. They
usually comprise the experts and pioneers from the respective field. The organisation
taken for the example is British Heart Foundation which works for the eradication of the
heart diseases from UK and promote the cardiac health in the society (Hamilton and
Webster, 2015). It also encourages people for the organ donation. The vision and
mission of the organisation is to make a better and healthy society and promote the
health care on the social level in UK. The stakeholders are usually the people who are
associated with such groups and the service providers who help in the functioning.
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 Legal sector: They provide the customers with the legal help and look through the
management of any sort of legal issues that arises with the individual or the
organisations (Huang-Horowitz, 2015). For the example we have taken the Industrial
Law Society that works for the implementation and maintenance of the various industrial
laws that are been decided by the trade unions or the government. They will look after
any sort of legal measures or help that can affect the well-being of the people or an
organisation.
LO3
P3. Functions of the organisation and its interrelation with organisational objectives and
structures.
The function of the organisation is deeply dependent on the structure of the operations
that are been followed at the organisation. The Tesco plc follows the hierarchical organisational
structure. The system of the organisation is been divided in many parts to work in better and
significant manner based on the operations of the company.
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Illustration 1: Organisational structure at Tesco plc
Sources: TESCO COMPANY ORGANISATIONAL STRUCTURE CHART EXAMPLE, 2017

On the top level of the outlet of the Tesco plc is deeply managed by the regional manager
of the outlet or firm (Jayant, Paul and Kumar, 2014). His work is to look after the efficient
running of all the outlets or retail centre of the Tesco plc. He will take the regular update of the
operations that are been taken into consideration. Also, he will help the store managers at the
outlets to take the appropriate measures to make the customer retain at the outlets.
Below the regional manager is the store manager who look after the operations of the
outlets. He will manage the operations that will help the company to gain a better productivity
and helps the member of the outlets i.e. the managers and managers of the different departments
and will look after the operations(Kljucnikov and et.al., 2016). The store manager will
coordinate with the managers and the employee's that will help them to identify the requirements
of the employee's and the customer's and take the effective measures to fulfil them. It will allow
the company to opt for the better flow of information and increase the flexibility to perform the
tasks. The managers of the various department such as food, clothings etc. will look after the
operations of the respective departments in order to get a better productivity and profitability.
This will help the company to gain a better sustainability and provide its customers with the
appropriate satisfaction level. All the departments are usually interrelated at the outlet that will
help the company to gain the better management of the operations and help to implement the
suitable measures to improve the quality of products and services at Tesco plc.
The interrelation of the various operations will help the company to gain a better
productivity and profitability in the market. This will help them to provide their customers with
the best of the services and products, which will improve their loyalty towards the brand and
have a better satisfaction level (Lu, Xu and Xu, 2014). Also, this will help them to achieve their
objectives that are been decided by the management of the Tesco plc and are necessary for the
appropriate market growth of the company. Besides this, it will help to make the structural
functioning of the Tesco plc more appropriate and efficient as it will improve the information
and resource transfer and allocation process that will make the operations of the company more
effectively successful. Beside this, it will help the management to find any sort of glitches that
can affect the operations of the company. This will make them identify their scope of
improvement that will enhance their performance and meet the customer's demands and needs in
a better way. The interrelation of the various functions will also, help the company to gain a
better productivity by implementing the approach of the resource management that will reduce
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the wastage at the Tesco plc and implement the appropriate measures to make the effective use
of the resources available. It will ensure that the proper training is been provided to the
employee's at the outlet and thus to make the effective use of their skills and knowledge for the
betterment, growth and development of the company (Niemann-Struweg, 2014). It will improve
the work efficiency of the employee's and helps the company to expand its operations which will
lead to better growth of the business firm in the market along with the better sustainability and
customer loyalty. The customer satisfaction will help to gain a better brand image and increase
the brand value of Tesco plc.
TASK 2
LO3
P4. Identify various macro factors that can affect the operations of the Tesco plc with its negative
and positive impact using the PESTLE analysis.
The macro factors consist of the various types of the external factors that will affect the
overall operations of the company and will lay a major impact on the operations of the company.
As Tesco plc is a multinational brand, that operates in the multiple nations. Thus, the macro or
the external factors of the operations will company have a deep impact on the functionality of the
company. The external factors like political, economical, social and technological factors will
have a deep impact on the operations of the company and may foster or hinder the growth of the
company(Prajogo, 2016). Thus, this factors are required to be taken into consideration and have
a major role in determining the operations of the company. The macro-environmental factors that
affect the operation of the Tesco plc can be identified and managed using the PESTLE analysis
of the company, which is as follows:
 Political: As the Tesco plc operates in multiple countries, it is susceptible to the changes
that takes place in the countries and can have an impact on the operations of the
company. The positive support from the governmental policies will help the company to
gain a better productivity and carry out the operations in the country (Rubtsova and et.al.,
2015). On the other hand the negative political conditions will impact the overall
conditions of the company. For example: The Brexit affected the interrelated trade of
Tesco between UK and the other countries of EU, which affected its profitability. But the
government of UK made the suitable measures to uplift the trade in the country.
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 Economic: The economic conditions of the UK as well as the other countries will have a
deep impact on the operations of the company. The positive rise in the economy of the
country will help to increase the overall trade of the company whereas the depressive
economy will impact the overall operations of the company that will reduce the
productivity of the company (Savrul, Incekara and Sener, 2014). For example, after The
Brexit, the economy of the UK slow down, which impacted the growth and profit of the
Tesco plc. To tackle it, the company had to launch various other services that helped the
business firm to manage and survive the impact the overall business of the company.
 Social: The social factors plays a very deep role in the management of the company. The
Tesco plc will also be deeply affected by the social operations that are been taken into the
consideration as the external factors. The change in the social conditions of the UK will
lay a very deep impact on the growth of the country and will ensure that the growth of the
Tesco plc. For example, the number of the elder citizens and consumer is decreasing in
the country and the young customers are increasing in UK (Sharma and Singhal, 2016.).
Thus, this will have a deep impact on the operations of the UK. The company will offer
more of the products as per the taste and fashion of the young customers as compare to
that of the elder customers.
 Technological: The technical advancement is very necessary for the better growth and
improvement of the company. The adoption of the latest technology will help the Tesco
plc to gain a better productivity and will have a deep impact on the operations. The
adoption of the newer technological measures will help the company to gain a better idea
of the operations of the company (Sinay, 2014). This will help the company to have a
better reach to its customers also this will help the company to gain a better productivity
by promoting its offers and products on various technical and social media platforms.
 Legal: the legal factors are the most crucial factors that will have an impact on the
operations of the company. Any sort of legal issue that will be faced by the company will
impact on its operations. Besides this, the legal obligations and restrictions that are been
imposed by the government or the legislation of country. Any legal issue can tarnish the
image of the company and may affect its sales and profit of the business organisation.
 Environmental: the company has to take into consideration, the environmental factors
will play a very crucial role in the operations of the Tesco plc. The environmental factors
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that will be taken into consideration by the company will help the company to gain a
better market share (Smith, 2014). Also, this will help the company to gain a better
productivity and increasing the brand image of the company. The environment friendly
products used by the company will help the customer to have a sense that they are giving
their contribution in preserving of the nature.
LO4
P5. Internal and external analysis of Tesco plc
The internal and external analysis of the Tesco plc will help the company to gain an idea
about the strengths and weaknesses of the company that will help the company to gain a better
idea about the operations that are been taken into consideration to get a better productivity and
profitability (Wetherly and Otter, 2014). The analysis of the strength and weaknesses will help
the company to make the strategic plan that will help the company to gain a better idea of the
functionality. The Internal and external analysis of Tesco plc is as follows:
Porter five force model:
The porter five force model help the company such as Tesco plc to gain a better
productivity and profitability. It includes the various factors that will help to determine the
strength and weaknesses to make a better decision making. It includes the following factors:
 Supplier's: The supplier that provides the services and raw material to the Tesco plc
will play a very crucial role in the decision making as well as act as the strength or
weaknesses of the company. The factors will be like the number of suppliers,
uniqueness of the service, size and cost that is been provided by the supplier (Wetherly
and Otter, 2014). If the supplier's charges the higher prices to the company, it will not be
economically feasible for the company. Thus, company has to look for another supplier
or has to increase the budget to carry out the operations which can be come a weakness
for the company.
 Buyer: The customers plays a very crucial role in the keeping of the charges down or
increasing the prices. The price of the products or the services that are been provided by
the Tesco plc buyers or the customers will have a very deep impact on the operations of
the company. The loyal customer base will act as the major strength of the Tesco plc,
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providing the business firm with the suitable market share and a big competitive
advantage to the cited firm.
 Market competition: This is the very important and crucial factor that is needed to be
taken into the consideration by the company. The increase in the market competition of
the Tesco plc will affect the overall operations of the company and will put a negative
impact on the sales of the products and services of the company (Smith, 2014.). But as
Tesco plc is one of the major company of the retail sector, competing with its is rather
difficult for other companies. Thus, this can act as the strength for the company.
 Threat of Substitution: The entry of new competitors in the market and meeting the
customers demand using the alternative methods or products will have a deep impact on
the operations of the company. The alternative or substitutive products will play a very
crucial role in affecting the operations of the company. This will lay the impact on the
profitability of the company. Thus, this can act as the major weakness for the company.
 Threats from new Entry: On the market level, many entrants have entered into the
retail business. Some are even providing the products and services on the lower prices
but compromising the quality (Sinay, 2014.). The ability of Tesco plc to provide the
high quality product on reasonable price is a major advantage for the company to have
the sustainability of the customers, which act as the strength for the company.
The external analysis of the company can be carried out by the value chain analysis
which is as follows:
 Sorting the operations of the company in primary and supportive activities. This
will help the company to create a physical value of the product or services.
Besides this, it will also help the company to have a better share of the market and
provide the customers with the after sale services. This all come under the
primary services. The secondary or the supportive activities will be the functions
that will help the company to carry out the primary activities.
 Allocation of the budget to each operation or the activity that will be carried out at
the Tesco plc. This will help the company to gain a better productivity and
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management of the resources (Sharma and Singhal, 2016). It will help the
company to identify its capacity to perform a task.
 Identification of the activities that are necessary for the customer satisfaction and
sustainability in the market. It will help the company to gain a better market share,
fulfilling its missions and influence the decision making activities of the business
firm.
The assessment of the internal and external factors will help the company to gain a better
profit margin and help the company to gain a better productivity. Besides this, it will affect the
operations of the company and help the company to make the better decisions that will impact on
the operations of the company. This will help the company to make the effective market plan and
meet the requirement of the company. The management of the company will use this approaches
to gain a better productivity and thus, this will act as a competitive advantage for the company
(Rubtsova and et.al., 2015).
P6. SWOT analysis of the company to identify its relation with external macro factors.
The SWOT analysis of the Tesco plc will help the company to gain a better idea about
the internal factors i.e. the strength and weaknesses. This will help the company to gain a better
idea about its capabilities and will act as a competitive advantage or the stopping factors in the
company. Besides this, the SWOT will help the company to gain an idea of the operations of the
company. The SWOT analysis of the Tesco plc is as follows:
SWOT Analysis
Strength Weaknesses
 Tesco plc is one of the major market
leader in UK and have a major base of
loyal customers.
 The company is known for its effective
online operations that make the
company a major success (Prajogo,
2016).
 Better customer relationship and
 Have a very weak financial support,
especially post Brexit.
 It is deeply based on the customers and
employee's of UK to carry out bits
operations.
 Fluctuations in the brand image due to
poor quality of certain services.
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market position helps the company to
get maximum number of customers.
Opportunities Threats
 Has a high opportunity top expand its
market.
 Can be operated in the financial and
non retail service market to increase the
profitability.
 Can opt for the effective marketing
strategies to have a better share of
market.
 Currency fluctuation on global level.
 Inability to meet the new leadership to
maintain the sustainability of the
market.
It is deeply related to the macro factors as it helps the company to gain a better idea of the
approaches and changes that it needs to make to gain a better profitability (Smith, 2014).
CONCLUSION
Thus, from the report it can be concluded that the environment plays a very crucial role in
the management of the operations. Various types of organisation and their purposes based on
public private and legal structure has been taken into consideration which tells the details about
the vision, mission and business objectives with the details of the stakeholders. Also, the
interrelation of the various operations in an organisation helps to gain better understanding. The
PESTLE analysis helped us to identify the macro factors affecting operation of Tesco plc.
Besides this, the internal and external assessment and SWOT helps to get an idea of the strength
and weaknesses and its impact on decision making of the company.
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Online
Tesco Company Organisational Structure Chart, 2017. [Online] Available through
<http://www.orgcharting.com/tesco-company-organisational-structure-chart-example/>
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