Business and the Business Environment

This report examines the business environment of Tesco PLC, a leading multinational retailer. It analyzes the company's structure, size, and scope, as well as its key functions and objectives. The report also explores the impact of macro-economic factors, including political, economic, social, technological, legal, and environmental factors, on Tesco's operations. A SWOT analysis and Porter's Five Forces analysis are used to assess the company's strengths, weaknesses, opportunities, and threats. The report concludes by discussing the importance of understanding the business environment for decision-making and achieving sustainability.

Business and the Business
Environment

BUSINESS AND THE BUSINESS ENVIRONMENT
Contents
Introduction .....................................................................................................................................3
PART 1............................................................................................................................................3
TASK 1............................................................................................................................................3
P1.................................................................................................................................................3
P2 ................................................................................................................................................5
M1................................................................................................................................................6
Task 2...............................................................................................................................................8
P3.................................................................................................................................................8
M2................................................................................................................................................9
D1.................................................................................................................................................9
PART 2............................................................................................................................................9
P4.................................................................................................................................................9
M3..............................................................................................................................................11
P5...............................................................................................................................................12
P6...............................................................................................................................................13
M4..............................................................................................................................................13
D2...............................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................15
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Introduction
The managers and the leaders of the organization maintains different department such as
management, logistics, running, arrangement, organizing, structure selection, coordination, and
planning (Hilton and Platt, 2013). The organizations based In UK has also enlarged and
expanded their business spheres in many countries. Based on the present organizational scenario,
Tesco PLC has established various functions in the organization for increasing the productivity
at the end of the financial year.
PART 1
TASK 1
P1
The large organizations in United kingdom has been chosen as the prime organizations in
this research study and different types of the purpose of the organizations, public, private and the
voluntary sectors legal structures in the United Kingdom. There are many large organizations
such as Sainsbury PLC and the Asda Stores Limited, which are the main competitors of the
Tesco PLC. The large organizations in United Kingdom such as Tesco PLC can also make the
opportunities for the accomplishing the competitive advantages and thus aiding for the better
marketing strategies, quality and prices in the external market (Bah and Fang, 2015).
Voluntary Industry
The Voluntary industry has been comprised with many individuals and personnel and
thus grouping towards for accomplishing any common purpose and objective. In United
Kingdom, there is lot of organizations and thus all the companies in the industries are striving for
adopting various changes of the socio-economic developments for the rural people of the
country. OXFAM is one of the famous voluntary company which is founded at Oxford, England
in year 1942. This company focus on poverty eradication, disaster relief, advocacy, policy
research and pro migration. They serve their services at worldwide level. The main objective of
the voluntary organizations is to manage out the blood for the ill patients in the hospital and thus
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raising funds for poor people in the country in the form of charitable tasks and regional
enterprises. The main purpose of the respective organization is as follows:
 The OXFAM organizations in the country are based with religious and the social motives
and thus experiencing charitable tasks in the country.
 The respective organizations are not a part of any government body or a local authority
and it runs on the collection of funding from the common people of the country and thus
using the surplus for earning and thus meeting the desired objectives and aims of the
organization (Chenchehene and Mensah, 2015).
Private Industry
The largest organizations in the country have set their aims in earning profit at the
beginning of the business process. Tesco Plc have also performed in the wholesale and retail
market of United Kingdom. The organizations have also increased the level of expectations and
thus increasing the level of profit for the organization. The purpose of Tesco Plc are given
below:
 Major purpose of respective company is to earn maximum profits form their activities
and shareholders.
 The other main objective of Tesco Plc is to create transparency in financial reporting and
annual report. But this transparency is only for their key stakeholders not for public at
wide level.
Public Industry
Many public limited organizations in the country have no upper limitations and thus
creating various issues with any kind of stocks for the common people of the country. The public
limited organizations are the most influential than the private industry as the industry showcases
the own advertisements and promotions in front of the people with the help of different
prospectus and the serving equity. NHS( National Health Service) is a public sector industry
which is establish in year 1948 and its headquarter is in Richmond House, London, England.
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They are providing health care services to every legal English resident. The major purpose of
NHS are:
 The major purpose of respective industry is to provide services to publics which conclude
public products and government services such as health care, military, police and many
other.
P2
Size of various business organizations in United Kingdom
There are various type of business are conduct in different sectors and it can be majorly
divided into private companies, public companies and voluntary company (Craig and Campbell,
2012). Description of all these industry according to certain company is given below:
Private Company – It is also know as privately held company or closed corporation
which is owned by any non government organization or small number of shareholder. For this
type companies no minimum capital is required. Their are various features to this sector some of
them are there is minimum 2 and maximum 200 members, there is restriction of transferability of
shares and many others. The major expamle of this sector is Tesco Plc, whose description is
below-
NUMBER OF STORES 6553
Amount of capital 1280 Billion Great Britain Pound
AMOUNT OF YEARLY REVENUE 55.9 billion Great Britain Pound
NUMBER OF STAFFS 4,76,000 and above
Scope: Their is wide scope of Tesco Plc in expanding their market by sell their products
and services with wide and new technology and innovation which attract more and more
customers. They can also introduce or lunch new range of products according to need and
demand of customers which help them in enhancing their share market and profitability.
Public Limited Company- It is a legal naming of limited liability company which offers
shares public and their liabilities are limited. They serve there products and services to general
public and also for their welfare or social care. National Health Service is a company which offer
their products to general public for health care motive.
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NUMBER OF LOCATION Worldwide
AMOUNT OF OPERATING INCOME Around £126.269bn
NUMBER OF STAFF Approx 1.4 million
Scope: They can enhance their services and products and cover their business in more
location so that they able to earn more profit. They can do this because peoples are happy with
their services in the areas in which they are serving their products and services so that this sis
seems as a scope for them.
Voluntary Company: It refers to those industry whose major purpose is to provide
benefits and help to society. These organization done this type of work without any profit motive
and have little or negligible support form government interventions (Laudon and Traver, 2016).
Some voluntary organization sectors are charities, foundations, social welfare organization,
advocacy group and many others. OXFAM is of the well know voluntary company which is non
profit organization.
NUMBER OF STAFF Approx 75,000
AMOUNT OF YEARLY REVENUE Approx € 1,040.7 Million
AMOUNT OF STORES Approx 650
Scope: The Voluntary industry has been comprised with many individuals and personnel
and thus grouping towards for accomplishing any common purpose and objective. In United
Kingdom, there is lot of organizations and thus all the companies in the industries are striving for
adopting various changes of the socio-economic developments for the rural people of the
country. It has many scopes in grow the sphere of the company.
M1
The structure, size, and scope of various companies connect to the business objectives, services
and products offered by the company are being analyzed
Public Limited Company:
Company Background: Tesco plc. Is British groceries and general merchandise retail who
server their products and services at worldwide level. It is know as third largest retail store in
world.
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Products and Services: They offer groceries and general merchandise at their retail store.
Size and Scope: It has approx 6,553 store at worldwide level and there are near by 4,77,000
employees working in these stores. They can expand their business in those areas in which they
are not operating currently.
Vision: Their vision is to serve quality products to their customers and be a company whose staff
and stakeholder will committed toward them .
Mission: Mission of Teso Plc. Is create values for their customers to earn their loyalty for
lifetime.
Voluntary Company:
Company Background: It is a union of approx 20 independent charitable company which focus
on alleviation of property at global level.
Products: They focus on poverty eradication, disaster relief, advocacy, policy research and pro-
migration.
Size and Scope: They offer their products and services at worldwide level (Prajogo, 2016). In
UK, there is lot of social group and all companies in business are striving for adopting various
changes of the socio-economic developments for the rural people of the country.
Vision: Their vision is to serve peoples at international level so that they exercise their rights and
able to manage their life in effective manner.
Mission: Develop programs and activities in appropriate manner so that they able to reduce
poverty and related problems.
Private Limited Company:
Company Background: It is know as world's largest single payer healthcare system whose
headquarter is in London, United Kingdom.
Products: They offer various health care services such as eye test, dental care, breath problems,
long term disease and many others.
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Size and Scope: It is know as world largest organization which offer health care services and it
has approx 1.4 millions employees.
Vision: They want to deliver outstanding, excellent and trust able healthcare services at home, in
community and at their hospital.
Mission: Their mission is to enhance healthcare facilities so that they able to build health future
and peoples able to live happily and healthy.
Task 2
P3
The main functions of the organization depends on the functions of various departments
like marketing, sales, survey conduction, human resource and management, accounting and
finance, training and development and resource and development as well as the customer service
sectors of the organizations. The marketing has been one of the most popular aspects of the
organization, where the both suppliers and the customers becomes profitable and thus increasing
the productivity of the organization and establishing new products in the external market.
Sometimes, in the middle of the business flow the organization also delivers some of the useful
messages to the employees and thus enhancing the social and the structural behavior of the
organizational culture and thus maximizing the responsibility of the organization (Pantano,
2014).
The accounting and finance department of the organization has also been one of the most
valued departments of the organization. The organization has also introduced a number of
investments to reach and thus meeting the desired needs and targets of the business entity. The
cost accountants and the chartered accountants of the organization have also played an important
role as they have the responsibility in preparing the balance sheet and thus valuing the profit and
loss at the end of the financial year. Many organizations in the department have also strived for
the treasury investment programs for assessing over the business growth of the organization.
In large organizations, there are different regional managers, store managers. They
process out the wholesale products to different stores of the country. The food trading manager,
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non-food trading managers and the personal managers are present under the store manager in
large organizations (Raman than et al. 2017).
M2
Advantages
The advantages of the connections in between the functions of the organization and
influencing on the structure are as follows
Large organizations has been integrating over the enlargement of the human resource
management in order to maintain the degree of the organizational behavior and thus covering all
the legislations and policies at the time of the business process (Apăvăloaie, 2014).
Disadvantages
In large organizations, the managers are focused in functioning out on the behavioral
aspects of the employees and thus neglecting the functioning of the manufacturing department.
The quality of the goods are getting lowered and thus lowering the degree of the customer
satisfaction.
D1
The organizational complexities are the number of resources measured with the help of
the people, data points, activities and the function points and thus improving the organizational
structures. The private organizations need to consist only of one shareholder and thus delivering
huge shares to the public. The company also offers a huge amount of shares to the individuals,
who have merged up with the organization in previous years (Cheung, 2014).
PART 2
P4
There are various macro economic factors which impact positively and negatively on the
business operations of the companies. In that context, the impact of various macro economic
factors such as political, economic, social, technological, legal and environmental factors of the
business have been discussed as below.
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Political: The positive impacts of political factors are that it helps to develop a clear
guidelines for the operations of the business in its own country or in foreign country. Without the
presence of effective political norms, the business loses the direction for operations. However,
for expansion of business in other countries, the supermarkets of UK such as Tesco, Sainsbury,
Asda and Morrison’s are required to follow various degree of political complexity due to diverse
political norms across various countries (Menychtas et al. 2014). This makes the operations of
the businesses highly complex.
Economic: The poor value of Sterling in international market has caused the import in
UK costly. This negatively impacted on the business operations of various supermarkets
operating in UK. All the leading supermarkets such as Asda, Tesco, Morrison’s and others have
restructured its business operations to sustain its competitiveness (Apăvăloaie, 2014). Thus
changes in economic factors impact negatively on the business operations of the companies. But,
due to the positive impact of globalization, many companies such as Tesco reduced the economic
risl of value of currency fluctuation by focusing its operation on US market.
Social: The presence of diversity in social factors helps the companies to foster diversity
in its business operations. However, if the companies fail to meet the demand of various social
segments effectively, it will not be able to make the business sustainable. Choosing the right
social segment of the business also decides on the success and failure of the business operations.
Technological: The positive influence of the technological factors helps the companies
such as Tesco, Sainsbury and Morrison has been successful to reach out to large customer base
by leveraging digital platform (Menychtas et al. 2014). But, the failure to access to the superior
technology has caused the companies to lag behind in competition.
Legal: Many business organizations such as Tesco, Morrison’s have generated
controversies related to infringement issues. Thus, following effective legal norms help the
companies to achi9ve sustainability (Apăvăloaie, 2014). However, the negative aspects of legal
factors is that, it reduces the scope of business considerably.
Environmental: The negative aspect of following various environmental norms is that in
increases the cost of operations. But, as it has been mandatory to include environmental norms in
CSR activities for companies operating in various countries (Apăvăloaie, 2014). This has
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become a norm of developing superior value. In that context, performing effective environmental
norms gives the companies high degree of competitive advantage.
M3
PESTLE is the acronym of key factors such as political, economic, social, technological,
legal and environment. The impact of these factors of the business operations of Tesco has been
discussed as below.
Political: Tesco operates in various countries across the globe. This requires the
company to follow different political norms across different countries. It has resulted increased
cost of operations and complexity for the business. However, die to the positive impact of
various free trade agreement such as EFTA, EU and others, the company becomes successful to
access various liberty in its business operations (Menychtas et al. 2014).
Economic: The poor economic performance of UK has resulted poor revenue of the
company. This resulted laying off many employees. But, due to the positive impact of
globalization, the company has been successful to access benefits from the higher value of
dollars as it focused its business in American market (economist.com, 2018).
Social: The increased inflation rate of UK has reduced the purchasing power of its
consumers. This has developed key social trends for the demand of hybrid and low cost products.
However, as money has been accumulated to the certain segment of society, it resulted widening
of social gaps (TESCO, 2018). This required for the company to offer products at diverge ranges
to meet the demand of this consumer segments.
Technological: Tesco has been successful to leverage digital technology in its business
operations. This helped the company to develop high degree of synergy in online and offline
platform. However, the overexposure of the company in digital media, made it vulnerable to
cyber threat (Menychtas et al. 2014). But, the company has been successful to enhance its degree
of market reach by integrating its business with the technology.
Legal: To make the business operations of the company, Tesco is required to follow
various legal norms such as National Minimum Wage Act 1998, Goods Act 1979 and Health and
Safety at Work Act 1974 (TESCO, 2018). Apart from these, the company has developed Tesco
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Law which would facilitate to provide legal services in Supermarkets. This way the company
makes its business legally viable and more protected from external legal influence.
Environmental: Tesco has implemented Little Helps Plan to make its 20 key products
such as bananas, corned beef, fresh beef and other environmentally sustainable. It has integrated
its supply chain in this plan, The company take yearly measures to improve, transform and
advocate its environmental measures to make its operations sustainable (Menychtas et al. 2014).
P5
Various internal and external analysis of Tesco has been discussed as below with the help
of SWOT analysis. SWOT is the acronym of strength, weakness, opportunity and threat. The
strength and weakness assess the internal aspects, whereas, opportunity and threats assess the
external aspects.
Strength: The company has been successful to diversify its business in various market
segments such as consumer goods, oil and gas, brokers, financial, legal and many others. This
reduced the risk of operating business considerably. Tesco has also been successful to make
considerate global presence as it has 6.809 shops located across various countries (Sogn-
Grundvåg, et. al., 2013). This resulted considerate degree of strength to the business.
Weakness: due to the poor economical aspects, the company has undertaken
restructuring policy, Thus caused the organization sack around 2000 employees. The company
also resulted infringement controversies with Verco and Weatherford (Pantano, 2014). It
negatively affected the brand image of the company. Thus, it shows a key weakness for the
business.
Opportunity: The stable performance of global economy has led better economic
opportunity for the business to grow in national and international market (Yu et al. 2014)
Threat: The presence of high competitive threat from Sainsbury, Marks and Spencer,
Asda and Wal Mart has negatively affected the competitive threat of the company (Yu et al.
2014).
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P6
To explain the strength and weakness in relation to the external macro factors of Tesco,
Porter’s Five Forces analysis have been provided as below.
Threat of new entrants: As the market is positively captured by the large supermarkets
such as Tesco, Sainsburry, Asda, Marks and Spencer’s and others, the market barriers in the
industry has increased (Yu et al. 2014). This has reduced the threat of new entrants in the market.
Bargaining power of buyers: The stable performance of global economy has developed
considerate purchasing power to the consumers (Yu et al. 2014). There is also presence of
various specialized retail stores and supermarkets. This increases the bargaining power of buyers.
Bargaining power of suppliers: Tesco has developed effective contracts with its
suppliers. This reduced the bargaining power of its suppliers.
Threat of substitute: In the online and offline market, there are various substitutes are
available for the products offered by Tesco. These products are offered by Amazon.com, Wal-
Mart, specialty retail stores and many others (Ramanathan et. al. 2017). Thus, it increases the
threat of substitute of the company.
Threat of competitive rivalry: The company faced high degree of competitive rivalry
from various organizations such as Marks and Spencer, Asda, Moriston’s, Wal-Mart, Amazon
and others (Chenchehene and Mensah, 2015).
M4
The SWOT analysis of the Tesco helped to assess its key business aspects from various
perspectives. It has led to identify the key strength and weakness presence in its internal business
aspects. Thus it will help to leverage its key strength to meet the market opportunity effectively.
It will also facilitate the company to reduce the negative impact of its weaknesses to overcome
the threats present in the market. This way the company will be able to make its business
sustainable effectively.
D2
Like all other business organizations, Tesco is also a social unit. Thus, various macro and
micro economic factors impacts on the business operations of the company. As it operated in
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global market, the political, economic, social, legal and environmental factors influences on its
decision-making aspect. As in the scenario of Brexit, the value of Sterling fell drastically against
that of Dollar. This caused the company to focus more on American market than that of UK
(Chenchehene and Mensah, 2015). This led the organization to lose large number of business and
employees. It negatively affected the profitability and brand image of the organization. This way
various macro and micro economic factors influence the decision making aspects of the
company.
CONCLUSION
The study outlined the scope, vision and other operational aspects of various business
organizations. It also provided details of organizational structure and functions. A
comprehensive PESTLE and SWOT analysis has also been provided in this study. The SWOT
and PESTLE analysis identified the degree to various macro and micro economic factors
influence the decision-making aspects of companies such as Tesco.
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