Business Environment Analysis and SWOT Analysis

The provided assignment is a detailed analysis of the business environment of Tesco in 2016-17. It includes a PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis to examine the external factors affecting the company. Additionally, it performs a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify the internal and external factors that impact Tesco's performance. The assignment also draws on various sources, including business books and articles, to provide a comprehensive understanding of the business environment in which Tesco operates.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types, purposes and legal structure of organisations.........................................3
P2 Size and scope of different types of organisations............................................................7
TASK 2............................................................................................................................................8
P3 Relationship between different organisational functions and link to objectives and structure
................................................................................................................................................8
TASK 3............................................................................................................................................9
P4 Positive and negative impacts of macro environment upon business operations.............9
TASK 4..........................................................................................................................................11
P5 Internal and external analysis of organisations to identify strengths and weaknesses....11
P6 Strengths and weaknesses interrelate with external macro factors.................................12
CONCLUSION..............................................................................................................................13
REFERENCES .............................................................................................................................15

INTRODUCTION
Business is defined as activity for making money or one's living by manufacturing goods
and services and selling it to consumers. Similarly, business environment is the sum of internal
and external factors that can influence firm and its activity (Avramenko, 2012). These both
factors works together for influencing enterprise for achievement of results. In order to run
business in competitive market, it is very important to understand changing environment in order
to fulfil requirement of consumers. The present report is based on TESCO which was founded in
1919 at England, United Kingdom by Jack Cohen. It is multinational British retail and groceries
organisation which provides variety of products for consumers. This is serving its goods and
services in different parts of world. As per scenario given in report, three organisation has been
selected which are private, public and voluntary named as TESCO, NHS and Oxfam. The
different types, purpose, legal structure, scope, size, vision of all these firms are explained. There
is relationship between various organisational functions, PESTLE and SWOT analysis are also
discussed in assignment.
TASK 1
P1 Different types, purposes and legal structure of organisations
As per scenario given in assignment, three types of organisations such as private, public
and voluntary are selected named as TESCO, NHS and Oxfam. Each of them has different types,
purpose and others. They are explained below:
Private Organisation
It is considered as part of country's economic system which is run by companies and
individuals rather than government. Such firms are run for making profit than providing services.
Background details of organisation- The private organisation which is chosen is
TESCO which was founded in 1919 by Jack Cohen at England, United Kingdom. It is
multinational British general retailer and groceries organisation (Ballard and et. al., 2012). It is
considered as third and ninth largest retailer in world in terms of gross revenues and revenues.
There are 6,569 shops located in different parts of world. It is serving in Ireland, Malaysia,
Czech Republic, Poland, United Kingdom, India, Thailand, Hungary. The CEO and Chairman of
TESCO are Dave Lewis and John Allan.

Products and Service- It is providing various products and services to consumers. The
products are clothing, electricals, footwear and services in terms of banking, mobile services and
others. It provide home service to users for their convenience.
Vision- The vision of TESCO consists of five elements which are described here. First is
needed and wanted around world, second is modern, full of ideas and innovation, third is
growing business by grabbing opportunities, fourth is winners should apply skills globally and
last is earning trust, inspiring and loyalty from consumers, communities and colleagues.
Mission- The mission statement of TESCO is to create value for consumers for earning
their lifetime loyalty.
Types- There are different types of legal structures of private organisation such as:
 Sole Proprietorship- When company is run by single person and share all risk and profits
by themselves is called sole proprietorship (Belás and et. al ., 2015). It is the simplest and
oldest form of business. In this type of enterprise there is minimum restriction, easy to
dissolve. For example, tailor, carpenter, grocery shop.
 Partnership- When two or more individual work together for earning profit and share
risk equally is called partnership. It is formed by signing partnership agreement regarding
number of share, authorised capital and so on. All partners have equal rights and
responsibility towards organisation.
 Joint Stock Companies- When there is limited financial resources and heavy burden of
risk leads to formation of joint stock companies. Capital can be raised through selling
shares of various values. Here, managing body can be CEO, Board of Directors and
others. It can be private limited and public limited company where private is formed by
tow or more but limited to 50 and no intervene of government. In public limited
membership is open and minimum number is 7 and maximum has no limit.
Purpose- Purpose of TESCO is to serve shoppers or consumers little better every day. As
it is want to be a champions for consumers, helping them to provide better quality of goods for
their life and easy way of living.
Legal Structure- After analysing all different types of private organisation, it can be said
that TESCO follows public limited company as legal structure which has large number of
members working in it (Bharadwaj and et. al., 2013). There are CEO, BOD for managing

different activities in firm. It is part of joint stock companies where invitation is open to general
public.
Objective- The objective of Tesco is to provide clothing, groceries and electronics goods
along with online service.
Stakeholders- The stakeholders of Tesco are consumers, suppliers, government,
authority, and others.
Public Organisation
This consist of governments agencies which are publicly controlled and funded which
delivers goods, services and public programs. It consists of both public enterprise and services.
Background details of organisation- The public organisation which has been taken is
NHS (National Health Service) which was founded in 1948 at England, Wales, Scotland,
Northern Ireland. It provide healthcare service to the individuals from dental treatment to optical
care. This only charge prescription fees from patient with exemption from charges. The founder
of NHS is Aneurin Bevan to provide helps to all patient suffering from diseases. This provide
free treatment to non-UK residents for improving their better health care.
Products and Service- The product and services given by NHS are medicine, different
types of test at reasonable or free of cost, providing health care medical facilities to all
individuals. All necessary care, medical and facilities are provided by this organisation to
remove disease and make health and life of people to be good and better.
Vision- The vision of NHS is based on three elements that is better health, better care and
better value. Statement of vision is to deliver better health, better care and better value.
Mission- Mission of NHS is to provide high quality care to all person every day for better
health.
Types- There are different types of legal structures of public organisation which are as
follows:
 State Government- It is considered as oldest form of firm which is part of department of
government. This has no separate existence than government which has functions under
control of one department (Charter, 2017). Example, broadcasting, railway, telephone
services, post and telegraph.
 Public Corporation/ Statutory Corporation- This type of organisation is formed by
special act of parliaments or central or state legislature. This is financed by government

and their objects, limitations, powers are also decided by act of legislature. Example,
Airlines, state bank.
Purpose- There are main four purpose of NHS are: creating enthusiasm for scholarship,
promoting leadership, stimulating desire for rendering service and developing character for
students of secondary schools.
Legal Structure- The legal structure of NHS is public corporation as it is formed with
help of special act of parliaments. It is financed by government for providing better service to all
people of UK regarding medical, treatment, test and to improve their health conditions (Cohen
and Kietzmann, 2014).
Objectives- The objectives of NHS is improving environment for both patient and staff
in order to benefits them.
Stakeholders information- There are many stakeholders of NHS such as customers,
contributors, commentators, champions, commissioners, collaborators, channels, competitors.
Voluntary Organisation
It is also known as Union, association, society that is group of individuals entering into
agreements such as volunteers for forming body to accomplish purpose. It is non profit
organisation which work for providing service to individuals.
Background details of organisation- The chosen organisation for Voluntary is Oxfam
which is confederation of 20 charitable firms which was founded in 1942. It mainly focus on
alleviation of global poverty, advocacy, disaster relief, pro-migration and policy research that is
non profit group with collection of operations (Craig and Campbell, 2012). This was established
in England, United Kingdom whose director is Winnie Byanyima and serving worldwide. There
are four focuses resources such as gender justice, essential services, economic justices and right
in crisis.
Products and Service- The products and services served by Oxfam are providing home
to disaster suffering people. It create innovative ways for individuals to lift them out from thrive
and poverty. Whenever crisis occur they provide help in saving and rebuilding livelihoods.
Vision- The main vision of Oxfam is to make world without poverty. They want to make
world where every individual is treated and valued equally for enjoying their life, rights and
assume responsibilities.

Mission- Mission of Oxfam is to assist in creating solutions to injustice of poverty. As it
is part of global movement for change, creating future which is free from poverty.
Types- The different types of voluntary organisation are described below: Unincorporated Association- It is organisation which is set up through help of agreement
among group of people coming together for other reason than making profit. This type of
firm does not require any cost for set up in market. All the details are mentioned in
agreement which need to be followed by members and in case of contractual obligations
and debts they are personally liable.
 Trust- It is corporation which is organised for performing fiduciary of agencies and trust.
This is owned by one of three types of structures such as bank, independent partnership
or law firm (Groebner and et. al ., 2013). It is not compulsory to exercise all power which
has granted to them. There are two person trustee and beneficiary for managing different
activities.
Purpose- The main purpose of Oxfam is helping to create long lasting solutions to
injustice of poverty. It is part of global movement for change and creating future which is secure,
free from poverty.
Legal Structure- The legal structure of Oxfam is Unincorporated association where it is
setup with an agreement among members. This work for public rather than profit making. It is
made to provide help to people for removing poverty from nations.
Objectives- The objectives of Oxfam is to assist in creation of last solutions to injustice of
poverty,
Stakeholders information- The stakeholders of Oxfam are partners, communities, staff,
volunteers, supporters, donors, alliance and coalitions, suppliers, private sectors, institution,
public and government.
P2 Size and scope of different types of organisations
The size and scope of different types of organisations are described below:
Private Organisation
Size- The size of TESCO is large as there are more than 460,000 number of employees
working in organisation. There are many subsidiaries such as bank, Ireland, stores Ltd, booker
group and Jack's. It has spread market in different parts of world for increasing their market
share and profit (Hair Jr and et. al ., 2015).

Scope- The scope of TESCO activities is fundamental element of strategy. Its scope is to
extent market into which it can easily sell goods and services. As it is already largest market of
retailer in UK and planning to expand in US. It can easily expand market wherever it want and
earn maximum market share and profit.
Public Organisation
Size- This provide medical service and healthcare services to all individuals. It has large
in size as it provide free of service to all UK residents.
Scope- The scope of NHS is serving more than 64.6 million people in UK and 54.3
million people in England. NHS deals 1 million patients every 36 hours including routine
screening, treatments, antenatal screening, emergency treatments and end life care.
Voluntary Organisation
Size- The size of Oxfam is not very large as it provide help to people of United Kingdom
in terms of removing poverty, relief from disaster, pro-migration, policy research and advocacy.
As there are 20 independent charitable organisations working for country to make country free
from poverty (Hillary, 2017).
Scope- It can expand their help and services to other parts of world. It works with partner
firm and trying best to vulnerable for men and women to end injustices that cause poverty. It
raises voices for poor people to influence local and global decisions that affect them.
TASK 2
P3 Relationship between different organisational functions and link to objectives and structure
It is very necessary for TESCO to maintain relationship with other functional department
to carry out work in effective and efficient manner. The single department cannot carry out all
task of organisation for better outcome. All the functional areas should work together to achieve
goal and objectives. As each organisation work for achievement of their goal and objectives
which can be vary from firm to firm. The relationship between different organisational functions
and link to objectives and structure are described below:
Marketing and Human Resource- Both functional areas work together for achieving
goal and objective (Hilton and Platt, 2013). As marketing manager provide help to HR manager
of TESCO to select best talent for their business to carry out task. Through use of various tools
and techniques many candidate apply for different post and marketing assist in finding the best

one. According to structure of organisation, requirement of manpower is decided by marketing
and accordingly selected by HR manager.
Marketing and Finance- The overall finance work is managed and handled by finance
manager. They need to carry out different task such as budgeting, allocation of funds to different
activities and department. Here, marketing department need to evaluate market properly and
analysis cost required for branding, promotion, planning. Both areas need to work together so
that proper allocation can be done in every areas for result achievement in TESCO. In order to
run activity of finance, skilled and knowledgeable manager is required. With rise in competition
increase, both marketing and finance should work together for increasing market share and
improving bottom line. If financial manager can easily understand functions of marketing
department then profitable and mutual beneficial relationship can be created.
Marketing and Research and Development- When both marketing and R&D focused
on better understanding of consumer needs then they both make their jobs easier and results
become more productive (Janita and Miranda, 2013). The data provided by marketing manager
helps R&D manager to make proper research so that results can be obtained. Both need to work
together to know about current trends and fashions so that output can be maximize. TESCO
manager should make decision on the basis of information provided by both manager for their
product development and modification.
TASK 3
P4 Positive and negative impacts of macro environment upon business operations
Macro environment can be analysed and monitored with help of PESTLE analysis that
can impact performance of organisation. The analysis is done when entering into foreign market
or starting new business. PESTLE analysis of TESCO along with their positive and negative
impact on business operations are as follows:
Political Factors- The intervene of government on business and its activities is called
political factors. They does not remain same for longer period of time. It includes interest rate,
government policies, corruption, tax rate, and others (Laudon and Traver, 2016). Due to Brexit
on UK supermarket has impact TESCO on its food prices. In September 2016, with effect of
Brexit has found decreasing pound sterling and made food import market more expensive. As
this forced them to purchase from goods from expensive based UK suppliers than EU suppliers.

 Positive Impact- TESCO can increase their profits and market if prices of goods are high
for consumers during change in political parties.
 Negative Impact- Due to Brexit, UK food market prices has been rise which leads
TESCO to purchase raw materials at high price.
Economic Factors- This factors includes inflation, taxation, international trade. These
are related with policies, structures which can impact business. Due to merger of ASDA and
Sainsbury's, TESCO has faced problem in loss of market share and price war. Company should
be aware of changes in policies such as tax, which can affect accessibility of finance. Positive Impact- The price rise during Brexit leads to earning of profit by organisation.
 Negative Impact- Due to decline in disposable households and income level, TESCO has
lost their profit margins.
Social Factors- These factors are related with beliefs, culture, attitudes, which can affect
demand of products of organisation. This is related with work ethic, demographics, consumer
attitude (Prins and Cybercrime, 2011). TESCO is considered as most renowned brand in UK
which has opportunity to deal in all segments for their consumers. Positive Impact- Through innovation in products can leads to earn maximum profits for
business.
 Negative Impact- In 2011, UK faced unemployment problem due to which company like
TESCO has faced problem in earning in profits.
Technological Factors- These factors can be related with innovations, barriers,
incentives and impacts on operation of business. Such includes information and communications,
research and development, technology legislations, emerging technologies (Savrul, Incekara and
Sener, 2014). With rise in technological, productivity increases that leads rise in profits. Positive Impact- TESCO has superfast delivery for providing products to consumers
within given time period. Also it has launched one-hour delivery service for consumers in
terms of grocery.
 Negative Impact- If TESCO does not adopt new technology for manufacturing then it has
to bear loss and profit decline.
Legal Factors- The regulations, laws and legislations that can affect way of performing
business and its activities is called legal factors. This can be related with consumer protection,
money laundering, health and safety, tax regulations. The new rules imposed by High Fat, Salt

and Sugar (HFSS) food or drink products for children under 16 has restricted promotional and
marketing efforts. Various laws made by government lead TESCO to follow all rules and
regulation while manufacturing products. Positive Impact- The imposed of new rules and regulation on food leads TESCO for
better outcome and creates brand value and increase goodwill in market.
 Negative Impact- The new law imposed by UK government aims for reducing content in
sugar drinks by 20% in 2020 that can impact supermarket and their own brand products.
Environmental Factors- When demand is affected by ecological and environment is
called environmental factors. It includes sustainability, impact of adverse weather, environmental
regulations, ecological situations. Nowadays, food wastage increasingly become greatest
challenges for food retail industry. TESCO need to keep in mind while manufacturing products
and make environment to be safe and healthy (PESTLE AND SWOT ANALYSIS OF TESCO
2016-17, 2019). Positive Impact- The environment can remain safe and healthy by using high quality raw
materials, using machinery properly for manufacturing.
 Negative Impact- In case of non-following of environmental laws can impose fine and
penalty on company that can leads to decline their goodwill and value in market.
TASK 4
P5 Internal and external analysis of organisations to identify strengths and weaknesses
Through the evaluation of internal and external analysis, TESCO can easily identify their
strengths and weaknesses which can be explained with SWOT analysis. It is given below:
SWOT analysis
It is planning techniques that is used by person or organisation to identify strengths,
weaknesses, opportunities and threats which is related with business competition or project
planning (Schaltegger, Lüdeke-Freund and Hansen, 2012). They are given below:
Strengths- It is considered as internal strength of TESCO. It is popular and biggest
supermarket in UK market where 60% of grocery use TESCO brand as compared to Sainsbury's.
It is regarded as one of top ten brands in UK market which fulfils needs and demand of
consumers. TESCO has highest brand trust agency in retail sector.

Weaknesses- It is also internal analysis of organisation. As it has faced loss due to many
website which is selling toys, households and consumer electronics goods. This leads to close of
business and 500 staff at risk of redundancy.
Opportunities- This is external analysis where TESCO has an opportunity to rise their
supermarket delivery as compared to competitors (Shenkar, Luo and Chi, 2014). Due to rise in
plus size fashion, TESCO can increase their offering and do innovation in products.
Threats- It is external analysis where UK sugar tax levy is threat for business. As
consumers demand for zero food waste which put pressure on supermarket to change their style.
ASDA and Sainsbury's are biggest competitors of TESCO.
P6 Strengths and weaknesses interrelate with external macro factors
The strengths and weaknesses interrelate with external macro factors are described
below:
TESCO Marks and Spencer
Political Factors Strengths: The profits can be increase
through Political stability which leads
maximum production.
 Weaknesses- The buying of raw
material increase cost for organisation.
Political Factors
 Strengths- Due to free trade policy
sourcing costs minimises that enhance
profits.
 Weaknesses- Change in tax policy is a
huge loss for retail sectors like M&S.
Economic Factors Strengths- The Brexit helps to rise
profit for organisation.
 Weaknesses- Profits can be decline due
to providing of bad quality products.
Economic Factors
 Strengths- Profits can be rise which
leads to high profit.
 Weaknesses- Due to currency Brexit
impact disputes arises regarding
product price.
Social Factors Strengths- Innovative products leads to
earning high profit.
Social Factors
 Strengths- Surrounding communities
support cut down internal costs.

 Weaknesses- Due to unemployment
profit margin reduces as consumers
does not prefer to buy products.
 Weaknesses- Products chain develops
negative social chain.
Technological factors Strengths- Superfast delivery of
product to customers
 Weaknesses- Due to advance
technology manufacturing cost increase
which enhance the product price.
Technological factors
 Strengths- Strong security and fast
delivery.
 Weaknesses- Enhances risk of the
fraud.
Legal Factors Strengths- Due to this brand value and
goodwill of the company increases.
 Weaknesses- As the sugar content
minimises this impact supermarket
which incur high cost.
Legal Factors
 Strengths- Product Barcode which is
included in the legal regulations this
help them to scan the product costs
easily.
 Weaknesses- Unfollowing of legal laws
leads towards decline brand value and
goodwill.
Environmental factors Strengths- Reduction in carbon
footprint reduces the waste in their
stores.
 Weaknesses- Not complying
environmental laws minimises its
goodwill.
Environmental factors
 Strengths- The use of proper waste
materials increase value of
organisation.
 Weaknesses- Environmental rules and
regulations at worldwide level
enhances the user pressure concerning
business practices
CONCLUSION
From above report, it can be concluded that business need to analyse their market for
better outcome. The three organisation has been chosen such as private, public and voluntary and

their size, scope, types, purpose has been explained which represent different concept. It is very
necessary to create relationship with all other departments for achieving goals and objectives.
PESTLE and SWOT analysis has done in order to know about different factors which can
provide positive as well as negative impact that helps to do improvement for better outcomes.

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