Business and Business Environment

This presentation discusses the impact of macro and micro factors on business objectives and decision-making. It explores the use of PESTLE and SWOT analysis in evaluating the business environment.

Business and business
environment
TASK 3 and TASK 4

Table of content
 Introduction
 Different types of organizations
 Size and scope of different types of organizations
 Relationship between different organizational functions
 Conclusion
 References

Introduction
The business environment is associated
with marketing term which is used by an
entity in order to take the competitive
advantages. There are different types of
business are running in market that all
needs to be analysis themselves so they can
identify which factor has impacted on
business. In other words, if a person is
going to start an run their activities in
relation to business then it should use
different tools and models for the purpose
of evaluating business environment.

Describe the positive and negative effects of macro
environment has on company processes, with concrete
examples to illustrate.
Macro environment – This refers as combination of various external factor which arises out of the
organization in competitive environment and has impacted on business whether positive and negatively.
Whenever, some is going to start or establish their business in business environment then it should analysis
the macro environmental factor that states how such factors are related to business sand affected the business
activities.
PESTLE analysis – This is a tool which is used by organization to analysis the industry and particular
business in order to know how such factor has affected the business and can run it successfully..

Cont..
Political factor – The relation of political factor with government, political system, trade barriers, political stability,
taxation rates, terrorism and military and fiscal policies which all are set by government that has impacted the
profitability and survival chances of a business entity. The positive and negative impacts in context to Tesco
business are as defined:
Economical factor – The relation of economical factor with pertaining to the economy in particular country and
nation that involves foreign exchange rate, inflation rates, GDP rate, interest rate that has impacted on business in
case of little bit shifts. The impacts on Tesco business of such aspects are as defined:
Positive impacts – In UK, there is high level of employment that means it is supplying greater jobs at lower cost that
is impacting positively on Tesco business as reduction in cost. Moreover, stability in exchange rate that is
supporting Tesco to trade at international level that helps to generate high profits.
Negative impacts – After Brexit, in UK interest rates are increased due to which it become difficult for Tesco to
expand its business in other areas by taking loan because there has to pay high interest charges.
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Cont..
 Social factor – The association of such factor with society which consists attitudes, culture,
beliefs, values and majority of people in community which focuses on needs and lifestyle of
people. this has affected the business of Tesco that are as defined:
 Technological factor – In competitive environment, technology is changing rapidly where it is
important for organization to focuses on innovation and new technology that can support and helps
to take the competitive advantages.

Cont..
 Legal factor – In UK, government has formulated many regulation which are important to follow that
involves, labour law, minimum wages, healthy and food protection etc.
 Environmental factor – For running a business there is need to follow the environmental standard
which have formulated by government. This involves ethical consideration, carbon emission, wastages,
spoiling water in case of not following.

Adapt the PESTLE model correctly to enable a
thorough study of an organization's macro climate.
 PESTLE analysis is an appropriate framework that should be used by organization in order
to analysis the external environment. This is important for organization to focuses on
political, social, economical, technological, legal and environmental factor which has
impacted on business. For instance, changes in technology can be risky due to spending
amount where management need to research properly and should hire skilled employees who
can perform well. Moreover, not following health and safety standard can be threat for
organization that needs to be improve by following and providing best quality of food to
customers.

Perform internal and external analyzes to define
strengths and deficiencies in different organizations..
Internal analysis – This is related to internal analysis of business where management is required to
use a appropriate framework and analysis the internal environment so strength, weakness,
opportunities and threats in relation to business scan get easily. This arises and can be evaluated
internally by using SWOT analysis that helps to operate a business and increase the organizational
profitability.
SWOT analysis – This is a framework which uses by companies to identify their strength and
weakness. The weakness and threats of business needs to converted in to opportunities so a
business can be run effectively and maintain the high profits. Such as Tesco is using SWOT
analysis that are as explained:

Continue….
Strength Weakness
 Tesco is having strong brand and global presence
specifically in Europe that helps to run a business and
increase organisational profitability.
 It has incredible growth place which help to operate
business.
 Leading organisation in competitive environment.
 Selling of retailing products and services
 Applying strategic business model that uses to operate a
business.
 Researching on marketing areas and using various
distribution channel.
 Focusing on customer needs and wants then deliver kind of
products.
 The manager are researching the market and bring
innovation and new technology in their process that
 Business concerns are following the centralised system.
 Lack of product range as per customer demand.
 Having competitor such as Walmart, Asda, Morrison etc.
 Shifting pricing charges activity that reduces
organisational sale.
 Sluggish and slumming profitability in USA.
 Shifting in people demand and choices.
 Spiked operation cost
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Continue….
Opportunities Threats
 Tesco is using new technology and innovation in their
organisation which helps to grow the business effectively.
 It ahs skilled and talented employees who works collectively.
 Best distribution channels.
 Larger stores in different countries.
 Developing customer needs and wants.
 Providing better quality of products .
 Focusing on minimal reduction of wastages and reducing
carbon emission.
 Government stability that provide opportunities to run a
business appropriately.
 The substitution of retailing products are available in market.
 Entrance of new business and using technology by them.
 Changes in culture, taste and preference of people.
 Climate changes that can reduces organisational productivity
and selling activity (Uluskan and Godfrey, 2018) .

Clarify how shortcomings and strengths interrelate
with external macro influences.
In competitive business environment this is highly important that to focus on external factors and run their
business effectively. If business concern are able to control and reduce the negative impacts then no change
to loss with high competition. To run a business a person should focuses on their macro factor which are
relating to external environment that means they arises out of the organisation. Such factors have contribution
in organisational productivity and brand increasing by attracting customers and deliver them best quality of
products. Tesco is retail supermarket that is focusing on external environment that has interrelation with
strength and weakness that are as defined:
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Continue…
Basis of
interrelations
Strength Weakness
Political factor Stability of political system and government regulation
in UK is creating strength for Tesco organisation such
as it can operate business successfully without any
restriction. This also helps to increase the brand image
between many competitors.
If government has changed its trade policy and put some
tight regulation then it will be weakness for Tesco to operate
its business in UK continuously because it will ha rd to
follow new trade policies (Zhang, 2015).
Economic factor In UK, by establishing supermarket Tesco is creating
job opportunities for residing people that is strength for
economy and organisation. For example, selection of
skilled and talented people at low cost and improvement
in economy by creating job opportunities for domestic
and international people.
The weakness of economic facto is rises in BRICS and
inflation rate can be limits the buying power of customers.
Resulting they will not ready to buy necessity and wanted
products easily so it will be difficult to sale its products.

Continue….
Social factor The strength of society is to identify the needs and
lifestyle of people who belongs to different society
and provide products and services accordingly that
helps to increase the sale and profitability of Tesco
company as it focuses on people culture, beliefs and
values.
A small shift in people taste and customer
lifestyle can be difficult for Tesco company to
sale its products and services effectively. As
customers can start to move towards other brand
and organisation that may be weak point for
organisation.
Technological factors The strength of technology adopted organisation
such as Tesco is incremental in brand image,
supplying products and distribution channel which
attracts customers by providing information and it
increases sale of chosen organisation. This helps to
take the competitive benefits.
The cash flow statement and income statement
of Tesco company can be go negatively because
spending a high amount on technology and other
working activities that has directly affected the
business negatively.

Continue….
Legal factor Tesco is strengthen their organisational effectiveness
by following all legislations such as minimum wages,
equal opportunities, health and safety standard, data
protection etc. which attracts customers to but the best
quality of product that increases selling activities.
If there is any mistake is done by management of
chosen organisation in case of following all
legislation then there will be chances of stopping
the business as per government regulation so it is
weakness of legal factor.
Environmental factor Reducing wastages and use it renewable energy
increases brand image and customer loyalty in
business environment that helps to operate a business
successfully and increase the profitability.
Not commanding on wastages and not providing
seasoning products will be weakness for Tesco to
get minimum amount and turn over in changing
climate that increase challenges for organisation.
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Applying the SWOT / TOWS model correctly and explain
how it affects decision taking.
Tesco is super market that is using SWOT analysis to know the strength and weakness of their organisation by
identifying opportunities. It run business by leading the better quality of products and services which
helps to maintain the high brand image in competitive environment. With the help of SWOT analysis
management can make right business decision and perform their all activities effectively by delivering the
retailing products. The management of chosen organisation are making right business decision at right
time by eliminating threats and converting in to opportunities.
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Critically evaluate the impacts that both macro and micro
factors have upon business objectives and decision-
making.
From the above discussion it has critically analysed that macro and micro environment should be analysed by
organisation at the time of running a business that helps to operate a business successfully and make profits. If
organisation is able to convert the threats and weakness in opportunities than mean it is using SWOT analysis
which helps to maintain high profitability. In macro it uses PESTLE analysis that focusing on external factors and
have impacted on business. These factor should be monitor by management so negative impacts can be reduced.
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Conclusion
From the above report it has been terminated that business environment is collection of internal
and external factor which are related to micro an d macro factors that arises in organisation
while running a business. PESTLE analysis is used by organisation evaluate the macro
environment that states how such factors have impacted on business . Where as SWOT analysis
states the strength and weakness of their business by operating it successfully.

References
 Karakowsky, L. and Guriel, N., 2015. The context of business: Understanding
the Canadian business environment. Pearson.
 Nel, P. and Abdullah, M. A., 2017. Mediating effects of business success on
the relation between business issues and business prospects amongst
immigrant entrepreneurs in Malaysia.
 Nevin, M., 2016. The strategic alliance handbook: a practitioners guide to
business-to-business collaborations. Crc Press.

Thank you