Business and the Business Environment: Tesco Plc

Business and the
Business
Environment

Table of Contents
Introduction .....................................................................................................................................1
LO1..................................................................................................................................................1
P1 Different types and purpose of organisation..........................................................................1
P2. Size and scope of range of different types of organization...................................................2
LO2 .................................................................................................................................................5
P3. Explain relationship between organizational function..........................................................5
LO3 .................................................................................................................................................7
P4. Positive and negative effect of macro environment factors on business operations.............7
LO4 .................................................................................................................................................8
P5 Internal and external analysis of Tesco..................................................................................8
P6. Interrelation of strength and weakness with external factors. ..............................................9
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................11
Books and Journals...................................................................................................................11

Introduction
Business environment is a type of external or internal force that have effect on business
functioning in negative or positive way (Deasy, 2016.). The environment of business affect
operations of business which need to modify the whole business. The report will lay emphasis on
different private, public and voluntary organization and also, it will highlight the goals of
business along with purpose and objectives. The report will describe about Tesco group as a
private retail multinational company. The Tesco deals with different product range which are
mainly in electronics, telecom, furniture, clothing, household goods, etc. The national health
service (NHS) is an organization which is operated publicly and provides services of primary
care, dentistry, etc. Another organization is Oxfam which is an association which is operated
globally for the alleviation of poverty. The report will also highlight about laying
interrelationship between structure and function of organization of business. The report will also
analyse the PESTLE and SWOT for understanding the micro and macro factors which affects
business as a whole.
LO1
P1 Different types and purpose of organisation.
There are three main types of organization they are as follows :
PUBLIC ORGANISATION
The public organization is an agency, entity and enterprise which is control as well as
funded by public sector, central or state government by organizing programmes and provide
goods as well as service to the customer as a whole.
National health service (NHS) is a public organization which is funded by government,
public sector and department of social and health care is head of NHS. This department provides
health care services for free to all legal residents. The NHS provide services like treatment in
emergency, infectious disease treatment.
The regulatory body of NHS is care quality commission and the major stakeholders of
NHS included customers, channels, champions, commissioners, commentators, competitors.
Also, the NHS purpose is to maintain high care of patient and maintenance of clinical excellence.
The care quality commission is NHS regulator. The scope of NHS is the promotion of well
being, specialist and health care of public. The legal framework includes state secretary for social
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and healthcare, Nursing and Midwifery council, General Medical Council, Care Professions
Council, General Dental Council, Department of Health and Social care.
PRIVATE ORGANISATION
The private organization is run by entity, individual, corporation or agency which is not in
control of government or public body. This organization is created in attaining objective of profit
making.
Tesco group plc is a multinational grocery of Britain and also deal in general
merchandise retailer for the earning of profit. The shares of Tesco is acquired by public and their
profit shares with share holders on a large basis as Tesco is a public limited company. The
company render services of clothing, books and electronics. Also, it has expanded their range of
products in petrol station and house hold goods.
The purpose of the company Tesco group is to identity need of customers and cater the need of
their at first. The scope includes the acquisition of large market by innovating products as well as
services (Hillary, 2017.). The legal structure of Tesco is based on Environment friendly practice,
corporate governance, and employment legislation.
VOLUNTARY ORGANISATION
These organization are association or a group of individuals which come together to enter
an agreement voluntarily in order to accomplish their specified purpose. Some examples of
voluntary organizations are professional association, trade union, etc.
An Oxfam is an institution which emphasize on alleviation of poverty at global level. It is
also considered as major non profit group with collection of operations. The main aim if to work
together for impact on international level to reduce injustice and poverty.
The scope of Oxfam is to highlight the innovation and implement practical ways in order
to improve people living standard. . The purpose of Oxfam is mainly focuses to provide aid to
poor people by establishing trust of association for them and work for the gender equality, safety
and security, anti discrimination, corporate governance policy, etc. The Oxfam stated their aim to
make productive decisions such as living standard, quality, justice and rights of people living
under line of poverty.
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P2. Size and scope of range of different types of organization.
Public organization
(national health
services)
Private organization
(Tesco plc)
Voluntary
organization
(Oxfam)
Background NHS was founded in
1948 and funded through
government. It is
undertaken by
government.
Tesco plc is a retail
organization that was
founded in 1919 by jack
Cohen.
Oxfam formed through
20 charitable
organizations and it
main aim is supply
food to relieve women
and after provide food
and medicine it helps
too self-supporting to
themselves through
provide tools.
Products and
services
NHS provide health and
social care services to
people on free of cost. It
also provides emergency
services and primary care.
Tesco provide products
like clothes, books,
electronics, furnitures,
software and household
and food products.
It conducts programme
to prevent and reduce
poverty and injustice so
Oxfam conduct many
seminars and
programmes for
awareness.
Scope It scopes is provided
delivery of services
quickly at free of cost.
They provide services to
poor person who can not
pay for treatment.
Its scope is to become the
largest retailer through
expand business in
different countries (Bah,
and Fang, 2015). Tesco
has scope to expand
business in US, Europe
and Asia.
Its scope is to improve
services and standard
of living of people
through innovate new
ideas and increase
practical ways.
Size It size is very huge Its size is also large It sizes includes 47097
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because it provides
services to 1 million
people in 36 hours and
employment provide to
1.4 million people.
because 4760000
employees engaged in
this organization and on
the bases of revenue
Tesco is 3rd largest
retailer in the world.
volunteers and 10230
staff at global level.
vision It visions is provided
better quality health
services.
Grow to business at
global level increase
customers loyalty
through create innovative
ideas.
Prevent poverty and
hunger from world.
mission To provide long term
health care services and
reduce health issues
permanently.
Its mission is understand
customers expectation
from organization and
also knows about people
choice related to job.
To prevent poverty and
injustice at global level.
Business
objective
NHS has business
objective that provide
services according to
needs and preferences of
patients. Reduce and
prevent major health
issues and also gather
informations about
treatment and service
quality.
Its business objective is
expanded business to
become the largest
retailers and provide
products quickly
according to taste, choice
and wants of customers.
To provide helps to
poor people and
develop their standard
of living through
empower them.
Organizational
structure
It structures includes
clinical commissioning
group, NHS foundation
trust and department of
It has hierarchical
structure, and they
consist functional and
divisional units. (Cepel,
Undemocratic structure
and hierarchical
structure present in
Oxfam so it contains
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health. 2018) Multi layer
structure present in this
organization.
many levels. And each
level control and
manage by individual.
Stakeholders Commissions, customers,
government, contributors.
Customers, suppliers,
employees, legal
community and
shareholders.
Shareholders, suppliers,
partners, government
agencies and donors.
Legal structure Legal structure of NHS
based on health and social
care and care quality
commission.
It includes corporate
governance, employment
legislations so this thing
helps in meet objective of
organization.
Its legal structure
depends on corporate
governance policy. So
it also includes gender
equality policy, anti
discrimination policy
and safety policy.
Micro enterprises :-
Micro organization means small business that provide employment to 9 people and its
balance sheet and turnover less than 2 million.
Small enterprise :-
Small enterprises refers to this organization who engage 250 employees. It investment
minimum 2.5 million but not exceeds 50 million.
Large enterprise :-
These enterprises include 5000 employees and turnover greater than 1.5 billion euros and
balance sheet more than 2 billion euros.
LO2
P3. Explain relationship between organizational function.
Organization function of Tesco closely interrelate with each other because without this relation
they can not operate business systematic and in proper manner. Following function present in
Tesco plc and interrelate as well :-
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Finance :- this function keep all records, transaction of expenses and revenue. All
function of business interrelate with finance because it provides budget to operate business. Like
marketing function take finance for promotion, advertisement for products and services.
Production function purchase raw material and fuel and electricity, so they also take finance
(Kozubíková, Homolka and Kristalas, 2017). Human resource recruit and provide training to
candidates for fill of vacant post so all these functions has need of finance and this is possible
through interrelations.
Marketing :- This is a important function of Tesco because they promote and
advertisement. It also understands to needs and choice of customers and provide satisfaction to
them. This function also interrelate with whole function because it shares information about
vacant position in Tesco and attract to candidates so it helpful for HR. It also promotes products
and services so this thing helps in attract customers. It researches to markets for knows about
needs and wants of customers and this is helpful for production.
Human resources :- This function hire skilled and efficient employees and this thing
helps in hire talented employees for all function. So business develop and increase because they
create new ideas. Technologies also implement through this function and provide training to
employees for operate and use of technologies and organization achieve goal and meet objective.
Advantage and disadvantage of interrelation :-
Advantage Disadvantage
Expertise knowledge :-
Through interrelation between all function of
Tesco, different skill and efficiency present in
an organization so this thing helps in create
ideas to improve and develop business and
achieve business goal.
Lack of coordination :-
Due to interrelation between all function of
Tesco management of organization can not
establish strong coordination between them.
Because all have own objective and goal, so
they can not do interact with each other.
Better customer care service :-
Due to interrelation in Tesco customer get
priority in sale after services because all are
interrelated with other so his thing helps in
provide care services timely and increase
Lack of interpersonal relation among
department :-
In Tesco discussion and interaction is
important to complete and achieve target and
goal of Tesco. But due to conflicts and disputes
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satisfaction of them. department can not discuss any matter and
plan.
Accept changing easily :-
Tesco's functions easily accept change due to
internal and external factor because all
function interrelate with other, so they operate
business together for improve and develop
business (Uchihira, Ishimatsu and Inoue,
2016). This thing also helpful in achieve goal
of organization.
Employees resistance to change :-
Bringing new technologies and development of
innovations, employees has fear to loss of job
because technology make easy to work and
increase productivity so employees needs
reduce day by day.
Increase knowledge and skills base :-
Due to interrelation, employees increase their
knowledge and skill because all are share
information, and they get knowledge about all
functions.
Increase competition :-
Interrelation of function in Tesco increase
competition between all department because all
are work and focus on own department
objective so this thing put direct effect
organizational goal.
LO3
P4. Positive and negative effect of macro environment factors on business operations.
Pestle analysis is a tool that use by Tesco organization to evaluate and analyse factors that put
effect on organizational performance. Following positive and negative impact of pestle factors :-
Political environment :-
Tesco operate their business at global level and political factor of every country put effect
on organization. It put positive impact that they have to follow employment law so this provides
protection to employees, and they motivate as well. Tesco reduce risk and injury from
workplace. Its negative impact that it has to face many problems in import and export because
they have to pay more tax so increasing rate of taxation make expensive to products.
Economic environment :-
This factor is uncontrollable and this thing affect to Tesco because it includes demand,
price and profit of organization. This thing depends on inflation, exchange and labour rates
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(Moroni, Arruda and Araujo, 2015). This factor has positive effect that Tesco reduce import from
other nation. It also decreases unemployment and this effect demand of products like food and
ready-made meals because all people earn money. Its negative effect, if labour rate increase by
government so Tesco has to pay more money and it affects to profitability.
Social environment :-
It includes choice wants and needs of customers. So it positive impact that customers
attract and increase reputation, profit and sales because they understand needs and wants. Then
provide products and services to customers. It negatives impact is conduct research frequently so
it consumes more cost and time. It provides clothes and other products according to lower and
middle class but it 75 % rich poor resides in UK. So it does not able to achieve minimum sales.
Technical environment:-
Technology is an important for Tesco because day to day technologies and innovation
increase and Tesco adopt the latest technologies to improve and develop business and products.
Its positive impact that it save time and cost because through technologies employees produce
huge quantity of products in less time. So sales and profit increase. It negatives impact that
employees losses their job and installation of technologies consume mores cost and time.
Legal environment:-
legislation and laws put direct effect Tesco performance. It positive impact is that Tesco
get discount on tax because it contributes to GDP and this thing beneficial for the company in
exporting and supply of product. Its negative impact is that follow many rules and regulation
because it majorly provides food products and food retailing commission introduce a code of
practice (Evans, 2017). Commission of food retail also increase price without notice so Tesco
has to face difficulties in making decision.
Environmental environment :-
Tesco has to take CSR and it put positive impact on organization because this thing helps
in attract investor and it has to use recyclable products for production. It negatives impact is that
Tesco can not ship their products in heavy rainfall. Delivery of product also delay due to flood,
rainfall and climate. This situation creates shortfall of products and customers switch Tesco
product for use of other products.
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LO4
P5 Internal and external analysis of Tesco
STRENGTHS
 Third largest grocery retailer in the world – The Tesco is attaining the position of third
largest company among the retail world just after Walmart and Carrefour. Diversified products – The products are numerous in stores of Tesco in different
countries of the world as the company operates their business by different franchise. The
Tesco has huge diversified range of products available in supermarket such as food items,
clothing, mobile phones, groceries, etc. The diversified product range of Tesco enables
the company to attain popularity as well as growth.
 Customer Satisfaction – The customer satisfaction in all the stores of Tesco is very high
as they serve to customers of different cultural and life style background. They also offer
personalized service of attract customers towards them. The need of customers are also
met, and they experience the best class of service by Tesco. This is the biggest strength of
Tesco.
 The Largest supermarket chain in UK – The company also attaining the largest chain of
supermarket in UK (Pearson, 2017). The companies image is attaining higher level in
mind of customer because of their chain.
WEAKNESS Lack of focus - The Tesco's biggest weakness is that their operations are less focused
because of the diversity of products in huge market area. The company can't focus due to
supply in various countries. Same business model – The company follows same business model in their every store
which depletes their performance. As the customers from different geographical
background has different taste and need but as the business model is same it does not
attract interest of customers towards them.
 Competitive disadvantage – The Tesco is facing competitive disadvantage due to their
pricing strategy they follow. The Tesco products are comparatively high in price as
compared to other companies and it impacts on their profitability.
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P6. Interrelation of strength and weakness with external factors.
Swot analysis is a tool that use by Tesco to evaluate and analyse of internal factors of
organization that put direct effect on organizational performance and it profits.
 Tesco has strength that it use employment law. This law provide protection to employees,
and they also attract to candidates from these rules. Tesco reduce injury and risk from
workplace. Political party of every country provide support to organization and increase
profitability (Gaganis, Pasiouras and Voulgari, 2019). This thing also influence
customers loyalty. Employees do work effectively and provide products and services in
effective manner to customers. Due to this strength customers can not switch to products
and services of Tesco.
 Tesco has strength that it has diversified market because they sale clothes, electronics and
food products. So Tesco earn profit easily because if it unable to make profit from one
product, so they make through another products. Tesco has major focus on food products
and earn more money. So it has to follow many rules and regulation about foods product
and it interrelates with legal factor.
 Its weakness is that they invest more money in franchise store but due to socio culture,
investment unable to give profit. Because customers fashion, choice and wants changing
frequently and profitability of Tesco influence through these factors.
 Tesco invest more money in technologies adoption so it is a weakness because more use
of technology impact on profitability (Georgescu and Popescul, 2015). Due to technology
cost of product increase and customers can not afford high price of products.
Conclusion
From the above study it has been summarized that internal and external both environment
affect to organization. It also concludes private, public, voluntary organization and their size,
scope, objective and structure. It concluded interrelationship between functions of Tesco and
interrelationship between strength and weakness with macro factors. Internal and external
analysis included in this report and strength and weakness of organization. Positive and negative
impact of macro environmental factor concluded in above report.
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REFERENCES
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Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
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Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Uchihira, N., Ishimatsu, H. and Inoue, K., 2016, September. IoT service business ecosystem
design in a global, competitive, and collaborative environment. In 2016 Portland
International Conference on Management of Engineering and Technology (PICMET) (pp.
1195-1201). IEEE.
Moroni, I., Arruda, A. and Araujo, K., 2015. The design and technological innovation: how to
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perspective for creation of sustainable business models. Business Strategy and the
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Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
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Georgescu, M. and Popescul, D., 2015. Social Media–the new paradigm of collaboration and
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Cepel, M. And et.al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness. 10(2). p.21.
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