SWOT Analysis of Tesco Company

This assignment is a comprehensive report on the SWOT analysis of Tesco company. It includes an internal and external analysis of the organization to identify its strengths and weaknesses. The report also explores the interrelation between strength and weakness with macro environmental factors, including political, economic, social, technological, environmental, and legal factors. The document provides a detailed discussion on each factor, highlighting both positive (strengths) and negative (weaknesses) aspects of Tesco's business operations.

BUSINESS AND
BUSINESS
ENVIRONMENT

INTRODUCTION
Business refers to the economic activity carried out to generate huge revenue and profits.
Businessman requires a business environment which is the combination of internal and external
factor like customers, government, employee and so on that influences the operations of business
environment. For the better understanding of this report Tesco company has been taken, which is
a British supermarket grocery store known for its biggest profitable supermarket chains
(Erasmus, Strydom and Rudansky-Kloppers, 2016). Following report carries topics like various
types and purpose of organisation. Along with different type of organisation's size and scope.
Moreover, discussion will be made on relationship between different organisation function and
the positive and negative impacts of macro environment on business operations are being
explained within this report. Lastly, discussion will be made on how strength and weakness of
an organisation is related to external macro factors of an environment is being focused in this
report.
TASK 1
P1: Evaluation of different types and purposes of an organisation
Organisation refer as an entity which is a collection of multiple people like an association
or institution that is structured and managed for some specific purposes. In addition, there are
three types of organisation they are public, private and voluntary. Each organisation has its own
legal structure along with specific purposes and they are mentioned below:
Private organisation: Private sector organisation is a type of organisation that is run by
an individual or company rather than government. Thus, the motive of private organisation is to
maximize profit rather than social welfare. Herein, Tesco which is a private company has leading
supermarket chains their legal structure and purpose are described below:
Legal structure
Partnership: The term partnership is an agreement or deed between two or more than two
partner who together manage the business operations. Thus, partners work together to fulfil the
common goals of an organisation. Additionally, within legal structure partners are liable to share
profit and pay the debt.

Sole proprietorship: Sole proprietorship is a type of private legal structure which is
owned and managed by an individual. These individual perform various business activities as
they start the business with their capital. So whether the business earn profit or incur loss they
are prime responsible for it. Moreover, within such legal structure business cannot be considered
separate from its business owner that mean both are single legal entity.
Limited company: Limited company is a type of legal structure where the liability of
each shareholder is limited on the basis of their investment and guaranteed to the company.
Along with that business has separate legal entity from its owners.
Purpose: Tesco being private limited company objective is to earn huge profit and
expand their chain worldwide to gain global dominance. Thus, they provide healthy and hygienic
food products to their customers in order earn profit.
Public organisation: Public sector organisation refer to the type of organisation which is
controlled and run by government on the behalf of shareholders. Herein, National Health Service
sector (NHS) which is a public organisation situated in UK. Therefore, the legal structure and
purpose of public sector is explained below:
Legal structure State government: It is a form of government which is responsible to address the need
and problem of local resident of that particular geographical region. They basically share
their responsibilities and political power with national government. Additionally, they
together establish regulation for state such as regulation in trade as well as exercise
important decision and function of state. Central government: The roles and responsibility of central government is to govern its
nations by making regulation as well as by controlling and governing entire nation. Thus,
they have different powers at various levels which is delegated to the federal state. Local government: It is a government that have control over specific geographical
region. Thus, they cannot make and implement any law which can affect entire nation or
wider sector of society. Apart from that they perform activities like they can elect
officials that affect the smaller section of society.
Purpose:The primary purpose of NHS is to render best health care services to improve
the economical, social and health conditions of society.

Voluntary organisation:Voluntary organisation refer to the group of voluntary people
who come together to form an agreement to achieve the purpose of organisation (Halbert and
Ingulli, 2011). For instance, Oxfam whose headquarter is in United Kingdom focuses on
independent charitable business to eradicate global poverty. Hence, legal structure and purpose
of voluntary organisation is described below:
Legal structure Trust: It refer to the legal structure of voluntary organisation which forms a formal
relationship between donor, trustee and beneficiaries. Association: Association refer to the legal structure in which group of people gets united
on the basis of shared objective of social welfare rather than profit making purpose.
Purpose: The primary purpose of Oxfam is to work against global poverty by making
sure needy people don't get deprived of basic need. Hence, it helps in securing the lives of needy
people.
P2: Explanation on Size and Scope of various types of organisation
Differentiation on small, medium and large organisation
Basis of difference Small Medium Large
Objective and goal Small organisation
objective is to survive.
Their objective is to
expand their business
like large organisation.
Objective of large
organisation is to
diversify its business
globally.
Market share Less Moderate Major
Profit share Less in comparison to
medium and large
organisation.
More in comparison to
small organisation and
less on basis of large
organisation.
Gain huge profit from
national as well as
international market.
Growth and
sustainability
Their growth is
confined only to its
region.
Moderate growth
prospective
Huge growth
prospective
Private organisation:

Size and scope of Tesco: The size of Tesco is very large has stores nearly 6500
worldwide. It provide employment to more than 4,00,000 people with market share of approx
28.3%. Thus, the future scope of Tesco is to widen its market share or reach as compare to
existing share. Therefore, to fulfil the scope respective company sell their products by making
the use of digital tools such as website of company.
Size and scope of Iceland foods Ltd company: This is a British supermarket leading
chain which has nearly 840 stores in UK. This shows the size of Iceland food Ltd company is
huge along with that the scope of Iceland is to keep on expanding its business to gain
competitive advantage (Erasmus, et.al., 2016). Respective company has approx 2.2% of food
market share and provide employment around 26,000 people. Whereas scope of Iceland is large
as it has acquired seven Irish store which were previously franchised.
Therefore, Iceland company and Tesco follows limited company legal structure.
Public organisation:
Size and scope of NHS: It is public funded national health care system which provide
employment to more than 1.5 million workers in which approx 150273 are doctors and approx
314,966 are health visitors. Thus, scope of NHS provides high quality health care services in
comparison to its existing services.
Size and scope of Teach first: Teach first main purpose is to cater the population which
remain deprived of gaining educational facility. Moreover, size of respective organisation is
continuously expanding as well as rising, currently company has more than 550 employees.
Furthermore, scope of respective organisation provides education facility to disadvantage group
of society.
Therefore, both the public organisation that is NHS and Teach first follows legal structure
of central government.
Voluntary organisation:
Scope and size of Oxfam: It is an independent charitable organisation that has near
about 5000 employees who are currently working with them. Whereas, scope of Oxfam is to do
social welfare by achieving the need of unprivileged group of society.
Size and scope of Cancer Research: Within cancer research voluntary organisation
charity is given to cancer patients. The size of it is huge in terms of revenue that was approx
£634.81 by 2015. Along with that there are approx 40,000 volunteers and 3,000 employees who

are part of this organisation. Furthermore, the scope of respective organisation is to take actions
against cancer patients by helping them to fight against it.
Therefore Oxfam and cancer research follows trust legal structure.
Transnational International Global organisation
For global growth and
development they bring new
innovations or trend in
internation business.
For global operations and
development organisation
focus on home market,
innovation as well as
companies resources and
then build global strategy.
In order to expand globally
organisation diversify their
offerings internationally
They design their supply chain
effectively due to which they
sell similar type of product at
lower price and cater huge
market demand
Focus on export and import of
product through global supply
chain but solely depends on
home country.
They consistently deliver huge
product to multiple country by
using the advantage of its
economies of scale. Hence,
fulfil global demand.
TASK 2
P3: Relationship between different organisation function
Tesco is one of the largest retailers of multinational grocery store in term of size and
revenue. Respective organisation has expanded its stores in more than 10 countries of the world.
Their marketing objective is to increase its market share by providing quality services at
reasonable prices in comparison to its competitors.
Organisation structure includes roles as well as responsibility being carried out by
company to achieve organisational objective (Zur Muehlen and Shapiro 2015). Different
organisation adopt different structure on the basis of levels, size, scope and communication flow
among various levels. Thus, helps in maintaining coordination and cooperation between different
group of organisation. Among various structure Tesco has adopted functional structure for its
organisation. These structures are formed on the basis of common interest, specialisation and
same skill set of people. The manager of each head supervise these functions as they have
expertise knowledge of their respective field. Herein, respective company CEO position is placed

at the top of organisation above all department like marketing, human resource, finance and
operations (Kew and Stredwick, 2017).
Marketing is not only confined to buying or selling goods and services perhaps it add
value in customer's live to make better decision. Primary role of marketing functions is to help
respective company in strengthening its brand loyal customers. Thus, this function not only
maintain organisation structure but also helps in fulfilling the objective of organisation.
As Tesco believes in serving various quality product at cheaper rate. Therefore, in
respective company production department helps in converting raw material into finished goods
with the help of workforce, tool and technique. Thus, interrelation between various department
strengthen the organisation structure and helps in attaining the objective of organisation.
Financial department helps Tesco by providing funds to carry out its operational
activity. For instance, if marketing department want to advertise products of Tesco through print
media or magazine then funds will be rendered by finance department. Hence, interrelated of
various function works in favour of company by building strong organisational structure as well
as goal each other (Moutinho, L. ed., 2011).
Human resource plays a significant role in recruiting and selecting best workforce for
the company. Herein, Tesco provide proper training and development session to its staff. As the
long term growth and development of company depends upon the employees who are catering
goods and services to its clients. Thus, respective company make sure its overall customer gets
good experience. So that they can gain competitive edge over their competitors.
TASK 3
P4: Impact of macro environment upon business operations (PPT)
TASK 4
P5: Internal and External analysis of an organisation in order to identify the strength and
weakness of an organisation (PPT)
P6: Interrelation of strength and weakness with macro environmental factor
PESTEL analysis helps in analysing strength and weakness of Tesco due to external
environmental factors.

Political factor: Political factor include government intervention, government policy etc.
Thus, the role of government affect the overall growth of company.
 Strength: Tesco has diversifies its business due to political stability. Hence, generated
employment opportunity.
 Weakness: Tough for company to anticipate government regulation due to which whole
company may need to change its operations and their working style to cope up with
changes.
Economic Factor: It is one of the parts of macro economic factor that include which
affect the demand and supply for particular product within economy.
 Strength: Respective company generates major part of their revenue from UK which is
their home market.
 Weakness: Any change in economic factor such as decrease in purchasing power of
customer affect the profitability of company.
Social Factor: It is significant in understanding the buying behaviour of consumer.
 Strength: Tesco has moved from one stop shopping into bulk buying shopping.
Additionally, they offer health conscious customer by offering organic food.
 Weakness: Tesco company may faces the hurdles of employee turnover or high
absenteeism rate if they don't encounter the need of employee ( Chavis, Klapper and
Love, 2011).
Technology Factor: New technology and innovation acts in favour of company. So
Tesco should always look for new as well as easier way of doing the work.
 Strength: Adoption of new technology and trend not only benefited to respective
company but customer as well. Thus, advancement of technology increases the efficiency
of company to serve its customers.
 Weakness: Adoption of new technology incur huge expenditure thus affect the
operations of company.
Environmental factor: These factor motivate company to function ethically and achieve
sustainable development motive (Cai and Yang. 2014).
 Strength: Tesco takes environmental factor into consideration by minimizing
environmental damage.

 Weakness: In case respective company neglect environment issue they will come up
with negative brand image. Hence, lead to decrease in market share and profitability.
Legal factor: It is essential for company to follow all policies, rules and regulation for
performing stable operations in global market.
 Strength: With the global dominance and huge market share has restricted the entry of
new entrant.
 Weakness: Tesco has to go through intense competition and price war to sustain its place
(Bovee, Thill and Raina, 2016).
CONCLUSION
From the above report it has been summarized that business environment helps in
analysing the internal and external factors that brings any changes which can be positive or
negative in the operation of business. Thus, conducting SWOT awnalysis is valuable for
manager of any company to evaluating the internal strength and weakness. Furthermore,
relationship among various organisational functions lead to coordination and smooth functioning
of organisation.

REFERNCES
Books and Journals