Business and the Business Environment | Tesco Plc

Business
and the
Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explicate different types and purposes of organisations........................................................1
P2 Explicate sixe and scope of different types of organisations.................................................1
TASK 2............................................................................................................................................1
P3 Explicate relationship among various organisational functions............................................1
TASK 3............................................................................................................................................2
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................2
TASK 4............................................................................................................................................4
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................4
Oxfam SWOT:............................................................................................................................4
P6 Explain how strengths and weaknesses interrelate with external macro factors...................6
CONCLUSION ...............................................................................................................................7
REFRENCES ..................................................................................................................................8

INTRODUCTION
Business environment is consider as combination of internal factor as well as external
factor that influence decision making and business function of an organization (Chetwood and et.
Al, 2014). This term include several factors like social, environmental, economical, procedure,
technology, finance and many others. It is necessary for a firm to adopt business environment in
order to identify opportunities, resources, changes and so on which help company in attaining
their goal successfully. Organization taken for this assignment is TESCO which is founded by
Jack Cohen in year 1919. Its headquarter is situated at Hertfordshire, England and respective
company serve their products at various location such as United Kingdom, Ireland, India,
Thailand, Malaysia, Hungary and so on. Topics which are discussed in this report are diverse
type of organisation and its scope, vision and scope. Along with this it will also include
interrelation of different function in a firm as well as it will also include analysis of micro and
micro factor including their positive as well as negative factor.
TASK 1
P1 Explicate different types and purposes of organisations.
Private organisation
It is defined as as a sector which is operated either in partnership, individuals or
franchises. Tesco is a retail retail sector which is headquartered within Hertfordshire England.
They furnishes services in Hypermarket, Superstore, Supermarket and Convenience shop.
Purpose
Tesco is a British multinational general and groceries merchandise retailer. There purpose
is to furnish services to their customers which are of high quality. They make use of different
strategies by which they can attain their organisational goals as well as objectives in standard
manner.
Legal Structure
Legal structure for private sector has been explicated below:
 Partnership: In this different persons work together for accomplishment of business
(Crane and Matten, 2016). Agreement occurs in between different partners with respect
to certain terms and conditions. Example advocates, doctor, etc.
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 Sole proprietorship: It refers to sector in which individual execute their business
operations individually and are completely responsible for profit or loss which occurs
within organisation. Example newsagents, market traders, etc.
Tesco is a sole proprietorship where they execute their business operations within smooth
manner for gaining profitability.
Public organisation
These organisations or sectors are regulated and possessed by government. It is a public
organisation which was founded in 1948 for serving humanity and services are delivered at free
of cost (Gharajedaghi, 2011).
Purpose
Motive of NHS is to understand needs of every individuals and thereby renders high
standards of excellence and professionalism. There motive is to provide healthy lives to maximal
number of people.
Legal structure
It is necessary for all organisations, it is shown below:
 State Government: There occurs legal as well as political rights among state and national
authorities. They possess rights for carrying formal decisions without taking formal
permissions from central government.
 Local Government: They comprises of local governance authority who are responsible
for carrying out their functions and duties from local as well as regional levels.
 Central Government: Within United Kingdom, they possess right for formulation of
decisions with respect to security of people with respect to distribution of budget, terror
attacks as well as security of nation.
NHS is making use of Central government where decisions are taken with respect to
business functions and their operations (Gilboy, 2016).
Voluntary organisation – The voluntary organisation an be described as those business which
operates to give facilities to needy people for free of cost in order to improve standards of living
of them. However, it can be considered as non profit institution and non governmental entity
which plays an important role to fulfil basics needs of poor people for make their life
comfortable. Moreover, it has been analysed that Oxfam is known as a voluntary organisation
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which was found in the year around 1942 and headquarter is established in Oxfam International,
Oxford in England.
Purpose
The Oxfam can be considered as an alliance of around 20 charitable institutions which
are independent. This organisation concentrate on factor of poverty in order to reduce the same
from society. They have main purpose to aid individuals at the time of when local ability id not
sufficient in respect of assisting people (Kian Chong, Shafaghi and Leing Tan, 2011).
Legal structure
Trust – The trust factor has been established among people in terms of gathering funds and
property regarding particular purpose related to welfare of poor individuals. However the trust is
helpful to make sure about privacy, confidentiality, coherence and integrity. Moreover, it is
beneficial to establish healthy relations with donors and beneficiaries to gain desired funds for
helping people suffering from poverty.
Company limited by guarantee – This can be considered as an isolated legal identity that
comprises of Memorandum of Association and Article of Association. It seems to be having less
liabilities that make sure about safety of their volunteers or members.
Associations - This is known as a community of small groups who perform together with
cooperating each other on agreed objectives which are non profitable.
Considering this, it has been analysed that the legal structure of Oxfam voluntary is a
trust by which they provide facilities to citizens of the nation for their welfare.
P2 Explicate size and scope of different types of organisations.
Private Organisation
Tesco is a retail company which provides groceries along with general merchandise
products related clothing, retailing of books, toys, software, furniture, financial services, petrol,
and internet services (Kaufmann, Kraay and Mastruzzi, 2011). It was established by Jack Kohen
in the year 1919. Its headquarters are located at Hertfordshire, England.
 Product & Services: Tesco provides services in retail sector in order to deliver general
merchandise as well as food items to its customers. They cater their products on the basis
of latest trends
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 Size and Scope: The selected organisation has acquired various brands under it in order to
provide services in multinational countries. Executives of Tesco have successfully
opened 7000 stores worldwide and provides employment opportunities to more than
500000 people. The market share of this retail enterprise is around 28.3% along with this
they are expanding the business in various another nations.
Public Organisation
NHS in wales, England as well as Scotland are related with HSC (Health and Social Care).
 Product & Services: Such business dekivers services in urgent along with emergency
care, pharmacies, hospitals, mental health services, dentists, sexual health services,
opticians as well as so on in order to move or visit England.
 Size and scope: It provides employment to 1.4 million people. It provide various medical
services along with facilities to individuals. They also convey information related to
health and convey data for betterment of society. They allocate budgets for expenditure
as well as allocates funds to health care department. They are also focusing towards
expanding business operation in numerous countries like London, Switzerland.
Voluntary Organisation
the another charitable firm is Oxfam (Oxford Committee for Famine Relief). Such business is
involved in raising funds as well as providing relief materials to various affected people. They
provide clothing, books, food and many more facilities.
 Size and Scope: They encompasses more than 20 charitable organisations as independent
firms. It focuses towards providing services related to food till amend dearth. The market
share of such enterprise is around 32.9%.
TASK 2
P3 Explicate relationship among various organisational functions.
Inter-relationship between department in an organisation plays a major role as every
department is interlinked with each other. Absence or non-functioning of any one department
the organisation objectives cannot be effectively achieved (Li and et. al., 2011). The inter-
relationship between different department within Tesco are explained as follows:
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 Finance and marketing: The relationship between Finance and marketing is that if the
marketing manager wants to promote the goods and services of the TEsco, they require
the funds which they can acquire from the finance department of the organisation.
Without finance department marketing cannot take place as they are directly related to
each other. For growth of the company and successful marketing, the company need to
have strong financial base because through finance only organisation will be able to set
sales target, cost of product, cost incurred in advertising and so on. For example: if the
company want to organize the campaign of a product then it require adequate funds
which is provided by finance department to execute it (López-Gamero, Molina-Azorín
and Claver-Cortés, 2011) .
 Finance and HR: HR comprises of activities such as recruitment, selection, performance
appraisal, compensation, training which require finance. Finance department within
Tesco provide funds to HR to carry these activities of the organisation and hire talented
and skilled employees to achieve organisational goals and objectives. For example: the
HR of the company require funds for advertising regarding the vacancy in the
organisation which can only with the support of finance department.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
It is necessary for a firm to conduct analysis of macro environment for which they can
adopt various method such as PESTEL. Evaluation macro environmental factors of TESCO and
Oxfam are given below with its positive and negative aspects:-
PESTEL Analysis:-
Political: It will include factors like trade policy, fiscal, taxation and so on which impact on a
company business operations and strategies. It is essential for a firm to conduct analysis as well
as improve or develop plans or polices accordingly so that they operate their business properly. Positive- Through political stability of United Kingdom and other countrysides where
TESCO and Oxfam are operating, both the companies able to conduct their work in
effective way (Meiners, Ringleb and Edwards, 2014). This will also help them in
operating their functions in other countries properly.
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 Negative- Political condition of company change on continuous basis due to which
TESCO and Oxfam has to conduct changes in their operation process which is difficult
for companies to change their decision on regular basis.
Economical: This will include factors like employment rate, interest rate, unemployment, cost of
raw material, foreign exchange rate and many more. It is essential for a firm to develop products
by considering economic condition of country because through it they able to create proper
strategies (Sekaran and Bougie, 2016). Positive- By adopting this factor both the companies able to develop products and
services accordingly to customers and country economy which help them in attracting
customers as well as enhancing goodwill of the firm.
 Negative- Economic condition of firm or country are changing on regular basis due to
which TESCO and Oxfam have to change their plans or process which directly and
indirectly affect staff's working.
Social: Social environment change or update on regular basis. Through this company able to
identify need as well as requirement of customers. This factor include aspects like demography,
level of education, cultural trends, lifestyle and many more. Positive- Through this factor TESCO as well as Oxfam able to identify customer's
requirement which help them in developing products and services in effective manner.
By which customers get attracted and encourage to purchase offerings of both companies.
 Negative- Trends and requirement of customers get change on regular basis due to which
company has to update their policies and process which impact on working of employees.
This is so because staffs has to conduct planning again and then conduct procedure
accordingly.
Technological: New technology are introduce in marketplace on regular which attract customers
and companies. Through this company able to develop products and services in effective
manner. Positive- By adopting this factor TESCO and Oxfam able to develop products and
services accordion to customers. Along with this it will also help them adopt new
technology at their workplace which make their procedure simple and effective.
 Negative- Negative impact of this it that due to technological advancement there is
reduction in need of human labour which increase unemployment rate (Saleem, 2017).
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Environmental: This factor will include climate, carbon footprint, recycling procedure, waste
disposal and many more. In order to this this factor company conduct CSR
(Corporate social responsibilities) activities which help them in gaining goodwill at potential
market place. Positive- Through this TESCO and Oxfam able to manufacture goods and services which
are eco friendly as well as through this they able to attract audiences and gain goodwill at
market.
 Negative- When both the company consider all aspects in order to develop products with
environment legalisation then it will increase of products for them.
Legal: This factor include customer's law, employment law, health and safety law, trade
legalisation and many more. For every company it is necessary to adopt legal factor so that they
can conduct their work in effective manner. Positive- By adopting this factor TESCO and Oxfam able to conduct their procedure in
legal manner. Along with this it will also generate job satisfaction among employees
which encourage them to stay with respective firm for long time duration.
 Negative- It is not possible for both the companies to adopt each and every legal
practices. Due to which they may face legal issues which impact on their working (Tayur,
Ganeshan and Magazine, 2012).
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
In order to analyse internal environment of company and evaluate its capabilities withing
organisation, SWOT analyses can be used. SWOT refers strength, weakness, opportunity and
threats of organisation. It is very important to evaluate internal environment for effective and
efficient follow of business operations. SWOT analyses of Oxfam and Tesco is mention below.
Oxfam SWOT:
Strengths Weakness
This organisation is providing services with
well defined goals and clear objective. This is
advantage for Oxfam as it helps in directing an
Oxfam have less global presence as an retail
store as its is more known for non profit
organisation and many people are not aware of
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edge towards fulfilling its mission. It has
clearly set goal and values which attract buyers
towards brands. Oxfam have good online
presence with affordable prices as compare to
competitors (Türetken and et. al., 2011) .
its services and products. Goods and products
of this store is not preferable for purchasing of
luxury products. Oxfam has concern about the
safety of volunteer staff and its employees.
Opportunity Threat
Company should more focus on promotion and
advertisement of its products in market. Oxfam
can take advantage of online and offline tools
of marketing to create awareness between
customers. Oxfam can focus on building a
brand image as a perspective of retails shops.
Its should commit to safety of its employees to
achieve its set objective.
This organisation have constant threat from
new and innovative products and strategies of
competition. Availability of more high quality
products of competitors is harmful for Oxfam
as it will leads to less in sales and market share
of company. Lack of volunteer and employees
commitment is disadvantage for company.
Tesco SWOT:-
Strengths Weakness
Tesco is a leading grocery retail company in
market of UK and has wide range of products
and services in market. This organisation is
located in many countries across the worlds
with diversified stores. It is continuously
growing and capturing major market share.
Tecso have obtained several international
awards.
It has charge of fraud in past year which have
impact on its brand image and profitability of
company. Tecso is using low cost strategy
which is leading to reduce in profit margins of
company. It has few stores and grocery outlets
in some specific area which are not performing
well.
Opportunity Threat
Tecso has recently introduces new discount
store, Jacks which is showing significant
growth and proving its profitability to
Tecso have to deal with rising growth of its
competitors. High quality offering and better
performance of its customers can be consider
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company. It can take advantages of online
market as tesco can grow and upgrade its
online market presence to attract new
customer. This organisation can expand its
business into new and emerging countries.
as a biggest threat for company. Economic
crisis and poor economic conditions can be
harmful for Tesco business operations.
Instability of political and government party is
a threat for functioning of business in that
market area.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Political factor: Political factor refers to the regulation, taxation policy, political stability,
property law and so on.
 Strength: In context of TESCO, the company must have the strong political relation with
other countries for easy trading of goods and services.
 Weakness: As per TESCO, if the company lack in maintaining political stability and
government has restricted their trading process, organisation wont be able to do
transaction across the globe (Vaiman, Sigurjonsson and Davidsson, 2011).
Economic factor: Economic factor is define as the study of interest rate, exchange rate, growth,
production, expansion etc.
 Strength: In TESCO, the company is able influence the demand, cost and profits of
product by analysing the economic condition of the market.
 Weakness: As per TESCO,if the company does not analyse the economic condition of
the market and do not maintain the cost price, it would lead them in a situation where
their demand of product will decline.
Social factor: Social factor means the study of age distribution, demographics, population
growth and so on.
 Strength: In context of TESCO, company focus not only on profits but also serving the
society which helps in the rapid growth of organisation.
 Weakness: In TESCO, if the company neglect the society sector and focus only on
profits, it wont be able to grow as company loose their potential customers from society.
Technology factor: Technology factor refers to segment which is dynamic in nature and reflect
how we market the product.
 Strength: In context of TESCO, company making the effective use of technology and
marketing its products will be able to beat its competitors.
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 Weakness: As per TESCO, not making the effective use of technology company will not
able to sustain its product in marketplace for long period which in turn incur loss for
company (Vaiman, Sigurjonsson and Davidsson, 2011).
CONCLUSION
By evaluating above points it can be conclude that business environment plays an
essential role in an organisation because by it company able to develop effective decision which
leads to high profitability and market shares. There are different type of organization i.e. public,
private and voluntary which have diverse size, scope, vision and so on. Along with this there are
various type of department which are interrelated with each other in order to conduct work in
effective way. A company need to conduct analysis of their macro and micro factors when they
want to expand their business for which they may use PESTEL and SWOT. There are also
strength and weakness of macro environment factors which are interrelated with each other.
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REFRENCES
Books and journals
Chetwood, M. K. and et. al, 2014. Transforming a legacy IT infrastructure into an on-demand
operating environment. U.S. Patent 8,775,232.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for
designing business architecture. Elsevier.
Gilboy, G. J., 2016. The myth behind China's miracle. In SEEKING CHANGES: The Economic
Development in Contemporary China (pp. 1-16).
Kian Chong, W., Shafaghi, M. and Leing Tan, B., 2011. Development of a business-to-business
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Intelligence & Planning. 29(5). pp.517-533.
Kaufmann, D., Kraay, A. and Mastruzzi, M., 2011. The worldwide governance indicators:
methodology and analytical issues. Hague Journal on the Rule of Law. 3(2). pp.220-
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Li, Q. and et. al., 2011. Towards the business–information technology alignment in cloud
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International Journal of Computer Integrated Manufacturing, 24(11) pp.1038-1057.
López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal
of Business Research. 64(4). pp.427-435.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Saleem, M. A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of Society and Space. 8(1).
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Türetken, O., and et. al., 2011, June. Enforcing compliance on business processes through the
use of patterns. In ECIS (p. 5).
Vaiman, V., Sigurjonsson, T. O. and Davidsson, P. A., 2011. Weak business culture as an
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Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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