Business and the Business Environment

This document provides an analysis of Tesco's internal and external environment, including a SWOT analysis. It discusses the strengths, weaknesses, opportunities, and threats faced by Tesco in the business environment. The document also explores the interrelation between strengths and weaknesses with macro factors in the external environment.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO4..................................................................................................................................................3
Analysis of the company on the basis of internal and external environment..............................3
Strength and weaknesses that interrelates with macro factors that are external..........................4
REFERENCES................................................................................................................................6

INTRODUCTION
Internal environment of the company involves elements that are within organisation and
internal analysis can be done through SWOT analysis. External environment involves those
elements that are not within organisation but affects its practices. External environment of the
organisation can be analysed through Pestle analysis framework.
MAIN BODY
LO4
Analysis of the company on the basis of internal and external environment
SWOT Analysis of Tesco
Strength-
One of the strengths of Tesco is that they have the biggest store in UK for groceries
among their competitors. Other than this they are bigger than them in terms of generating
revenue also and last year they witnessed a growth in their profits by 11 per cent. Tesco has
maintained their relationship with their suppliers which is why they can get the goods from them
at reasonable price and maintain their profits. Currently the company is the one who has the
highest share in the market. Other strength of the company is that they are the largest employer
in Europe who is private as they have provide more than 700,000 jobs and currently they have
more than 500,000 people as their employees over the world.
Weakness-
The failure of company in the markets of US and Japan has become their weakness. It
was because they could not meet the requirements of exports. Other than this they changed their
club card without passing any information which is why they got angry and switch to another
brands in the market. There have been many cases where it has been revealed that many of their
cases has been reported where they did not file the right profits earned by them which led to
scandal and affect the image of the company. The company is in high credit card debts which

were supposed to be used for increasing their profits instead it is decreasing their rate of profits.
Even the situation of EU and Covid has decreased the operating profit of the company.
Opportunities-
Currently the company is operating their operations in 12 countries and even after that
they have the scope of entering into the markets that are new and emerging who have a potential
to grow. Other than this company has opened up their new store by the names of Jack’s store and
it is performing well in the market which is why they are able to compete with companies such
as Lidi and Aldi. Company is claiming their scope of tying up with other brands so that they can
come up with innovative strategies and new portfolio that helps them to attract their customers.
They have even claimed the aspect of online platform so that they do not lose their share in the
market. This has also increased the feasibility for customers as they can easily order from home
and get it delivered.
Threats-
The current major threat for the company is crisis of national economy as everything is
fluctuating such as rate of growth, rate of tax etc. which is making it difficult for them to sustain
their environment. Other than this the deal of Brexit has affected the business on a vast scale
which they did not expect. With that company is also dealing with the situation of pandemic that
has affected the global economy. They have faced threat of the issue of fake farm because they
advertised their products under the name of Woodside Farms which was not founded in the list
of their assets and that is why they have to deal it with the law. The continue threat for Tesco is
the same level of competitors that are operating in the market and affecting the rate of growth of
business (Kumar and Pradhan, 2016).
Strength and weaknesses that interrelates with macro factors that are external
The approach of both the analysis that is Pestle and SWOT is similar through which they
are able to analyze the needs and wants of environment so that they can comply with them and
achieve growth. There are many issues on which both the methods interrelate with each other.
There is difference among both the analysis that is Pestle and SWOT and that is Pestle analysis
puts their focus on taking out things that is external to the business whereas SWOT analysis puts
their sole focus on taking out things that are internal and external both. The focus of pestle

analysis is on aspects such as political that assesses the restrictions imposed by the government
of business. Other than this it also covers legal aspects which help them to assess the laws
imposed by the government which is necessary to follow. After they have completed the analysis
they will be able to make a decision that which of the areas need improvement and which needs
critical attention so that they can form the strategies through which they can work on improving
their image which was affected in the cases of fraud made by them. As only this way they will be
able to gain the trust of their customers and keep them loyal to them. The actions of the company
were the ones which affected the whole image of the company and for their actions and scandal
they never publically apologized so that people can forgive them. Now the only way to gain the
trust of the customers is serving with fair practices in the market and as per the requirements of
the customers. It is with the help of this analysis that they will be able to assess the needs and
wants of people and make strategies that are different from their competitors because if they are
not different from them then they won’t be able to attract them. The focus of the company must
be on expanding their share by serving in markets that are new and emerging (Bashir and Verma,
2017).

REFERENCES
Books and Journals
Bashir, M. and Verma, R., 2017. Why business model innovation is the new competitive
advantage. IUP Journal of Business Strategy, 14(1), p.7.
Kumar, V. and Pradhan, P., 2016. Reputation management through online feedbacks in e-
business environment. International Journal of Enterprise Information Systems
(IJEIS), 12(1), pp.21-37.