Business and Business Environment

This report analyzes the positive and negative impacts of the macro environment on business operations, using Tesco as a case study. It includes a Pestle analysis and SWOT analysis of Tesco, as well as an explanation of how strengths and weaknesses interrelate with external macro factors.

Business and business
environment

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples...........................................................................3
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.......................................................................................................4
P6 Explain how strengths and weaknesses interrelate with external macro factors..............5
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................6
Books and journals.................................................................................................................6

INTRODUCTION
Business is surrounded by different sectors which impact it directly or indirectly and
the combination of all these factors is known as business environment. For conducting the
support the chosen organisation is Tesco, it is the leading multinational retail supergiant.
Companies dealing in various product and have a middle market share in UK with more than
1500 stores (Gaganis, Pasiouras and Voulgari, 2019). In this report there will be analysis of
the positive and negative impact of macro environment on for which there is use of Pestle
model framework. In middle of the report, there will be evaluation of internal factors which
have a direct impact on organisation for this there will be use of SWOT analysis. In the end
of the report, there will be explanation about how the strength weakness and external macro
factors will also evaluated by which the impact of these can be understand.
MAIN BODY
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
External environment have various impact on the working of an organisation this is
because it includes political, social technological, economic, environment and legal factors
which are related to functioning of a organisation. In context of Tesco, it is also dealing with
all the factors at the workplace. Foreign analysing these factors the pestle Framework is used
which is discussed below:
Pestle analysis of Tesco
Pestle is that Framework which is used by an organisation to identify the external
environment which can impact on organisation.it includes an identification of political social
legal environmental economical and technology factors affecting the business working.
Political: it includes two sectors which are directly related to the government policies
and regulations which have their impact on business. In context of Tesco, it is operating in
UK, the government of UK have sound policies and rules which does not impact negatively
on the process and structure of organisation. Some political dilemmas like BREXIT have
some small issues which are related to change in policies and regulation but government of
UK have enough plants for saving the interest of businesses.

Economic: these are those sectors which include exchange rate, GDP growth,
employment rate and many more. GDP growth and employment rate of the UK are in
positive manner, which have no negative impact on the business. This is because GDP
growth of UK continuously increasing where the unemployed ratio is also decreasing health
organisation in growth and development.
Social: it includes number of factors like trends in society culture behaviour of
individuals and social thinking. All these have various impacts on the business of an
organisation. In context of Tesco, social trends like adoption of healthy food, changing in
fashion are impacting on the organisation which has to identify management of the company,
because this can impact negatively in future sales of organisation product.
Technological: technological factors are those which are related to the changing
technology of technological advancement within the business of organisation. Test was
facing issues like poor customer experience and horseman scandals technological
advancement botany or positive test for regaining the customer trust it use self-checkout
systems as well as improved scanning system which help company in retaining the trust of
customers (Ayatse, Kwahar and Iyortsuun, 2017).
Environment: these are those which are related to geographical location of the
business which includes climate and mental change or any other issue which are related to
environment surrounded by the organisation. In context of Tesco, companies fulfilling all its
application for environment where it came to use the renewable source of energy for
generating electricity within the organisation. Company also promised to minimise the 50%
of carbon footprint by 2020 (Alsaad, Mohamad and Ismail, 2017).
Legal: legal factor includes the rules and regulations which are formed by the legal
authorities of the country where organisation is operating. in context of Tesco, Company
follow all the legal requirements which are acquired by number of governments of different
nations because it is working at a global level.
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses
It is also important for an organisation to identify its internal factors which can affect
its performance, productivity and profitability while performing different functions.it is
important to identify the rules and challenges which arrive because of strength and

weaknesses within the internal environment of the organisation. In reference of Tesco, it is a
global retail giant which is operating at high level. For bringing effectiveness in different
operation there is clear need to identify the strength and weakness of organisation for further
expansion. Below, there is SWOT analysis of the Tesco which identify strength weakness
opportunity and threats of the organisation.
SWOT analysis of Tesco
It is that analysis which includes identification of internal environment for an
particular organisation where its strength weakness opportunities and threats will be analysed.
Strength:
Biggest grocery retailer in UK: the major strength of Tesco that it is a number one
supermarket in whole UK. Companies operating more than 1500 stores with 28% market
share within whole UK, According to the report published by the finance department of
Tesco. The annual growth in 2018 profit is 28% which is highest among all retail supergiant.
Diversify marketed product range: Tesco use the best diversifying strategies which
has also been successful for the company. This can be seen as companies operating in
clothing range, mobile phone, business music, download, DVD, school uniforms, financial
and technique telecom services as well as cotton fair trading across the globe (Yang and
Gabrielsson, 2017).
A growing number of stores: is expanding its market regularly which is also Prince
of organisation where it is operating with more than 7000 globe. This also help organisation
increasing the revenue because of increased during operation chain.
Weakness:
Decrease in operating profits: the major weakness of organisation is that company is
suffering from low operating profit because of their Investments. This also impacted on the
firm's performance as share price of Tesco decrease by 9% because of this operating profits.
Poor performance in some specific markets: Tesco is also suffering from poor
performance in some markets of US and JAPAN where company lost its maximum shares as
well as stores.
Opportunities:

Alliance with other brands: Tesco have a great opportunity to partner with other
brands for pursuing its goals and objectives in an effective manner. There is number of other
brands which will help the organisation to come up with battery production services and
facilitate customer (World Bank, 2016).
Online shopping stores: Tesco mobile app for online shoppers, where customer can
get the feature of home delivery as well as attractive offers.
Threats:
National economic crisis: Growth and performance of Tesco in some parts of the
country affected by economic factors like credit government rules and regulations which are
serious threat to it. Creative mind set of a company e is required to counter threats.
BREXIT deal: BREXIT here refers to British exit from Europe, Because Tesco has
been running its business operations in many e European countries the trade deal will have
serious impact on the business of Tesco.
P6 Explain how strengths and weaknesses interrelate with external macro factors
Internal factor of the organisation are directly related with the external factors as they
both impact together on the organisation. This can be seen from the example of test where it
is strength of biggest grocery retail in UK, diversify market and product range with growing
number of stores only because there are easy political rules and regulation and good economy
of the UK. This all help in getting the strengths as there is good GDP growth rate as well as
low unemployment rate in UK which directly impact on increasing the performance of
organisation. Social factors like changing trend toward healthy food and changing fashion are
also effective in increasing the strength of Tesco. This is because company identify the trends
toward the healthy food and changing fashion and implemented different changes in the
organisation where it can become the largest food retailer as well as super fashion giant
within the whole UK (Quinlan, Babin, Carr and Griffin, 2019).
Social factors like changing trend toward healthy food and changing fashion are also
effective in increasing the strength of Tesco. This is because company identify the trends
toward the healthy food and changing fashion and implemented different changes in the
organisation where it can become the largest food retailer as well as super fashion giant
within the whole UK. Weakness is also related to the external factors of an environment. This
can also see and Tesco where company suffering from the weakness of decreasing operating

profit and poor performance in some specific market. The main reason behind this
weaknesses are also related to the external environment of the organisation changes in
technological environment which lead in decrease of operating profit within the test because
of investment in new technology. Legal environment of nations like America and Japan also
impacted on the week as a weakness of Tesco because there are many legal rules which have
to follow by the organisation (Hamilton and Webster, 2018).
CONCLUSION
It can conclude from the above mentioned report, that external and internal
environment have various impact on the production promotion productivity profitability of
organisation. I have to clearly examine by the management of the firm for getting maximum
advantage in competitive environment.

REFERENCES
Books and journals
Alsaad, A., Mohamad, R. and Ismail, N.A., 2017. The moderating role of trust in business to
business electronic commerce (B2B EC) adoption. Computers in Human
Behavior, 68, pp.157-169.
Ayatse, F.A., Kwahar, N. and Iyortsuun, A.S., 2017. Business incubation process and firm
performance: an empirical review. Journal of Global Entrepreneurship
Research, 7(1), p.2.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling, 78, pp.275-
292.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South
Western Cengage.
World Bank, 2016. Doing business 2017: Equal opportunity for all. World Bank
Publications.
Yang, M. and Gabrielsson, P., 2017. Entrepreneurial marketing of international high-tech
business-to-business new ventures: A decision-making process
perspective. Industrial Marketing Management, 64, pp.147-160.