Business and the Business Environment

This document provides an in-depth analysis of the type, purpose, size, and scope of public, private, and voluntary sectors in the business environment. It explores the interrelationship between different organization functions and the positive and negative impact of macro environment on businesses. The case study focuses on Tesco, a multinational retail store.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Explain the type and purpose of public, private and voluntary sector.............................3
P2: Explain the size as well as scope of different organisation type......................................5
TASK 2............................................................................................................................................6
P3: Interrelationship between different organisation functions..............................................6
TASK 3............................................................................................................................................7
P4: Positive and negative impact of macro environment upon business................................7
TASK 4............................................................................................................................................9
P5: Internal and external analysis in order to identify strength and weakness of Tesco........9
P6: Strength and weakness of macro factors........................................................................10
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Business environment encompasses the various business activities that help the firm to
gain opportunity and lead to effective functioning by enhancing the overall growth and
development. It involve the role of an individual as well as business entity that cannot control the
functioning of an external environment irrespective of that it affect the long term growth and
profitability (Ambler, , Witzel and Xi, 2016). For the better understanding of report Tesco
company has been selected which is one of the largest multinational retail stores which serve in
various developing and developed part of economy to build the brand positioning. The
headquarter of company is in United Kingdom and deals in various products like grocery item,
electronics, clothing, financial services and so on. This report cover topic like different types and
purpose of public, private and voluntary organisation. Demonstrate the interrelationship among
different functions of an organisation. Moreover, analyse the impact of macro environment
within the operation of business. Further, analyses of internal strength and weakness and its
interrelationship with external factor are covered in this report.
TASK 1
P1: Explain the type and purpose of public, private and voluntary sector
Organisation comprises of the group of people that function together in order to maintain
the structure and operate successfully within dynamic environment. It basically includes the role
of various individuals that function together with the objective to ascertain the objective
successfully. Thus, the explanation of each type is stated below:
Private sector exists with the objective to gain huge amount of profitability and focuses
on wealth creation by expanding the operation of business within various geographical areas.
Here, the ownership of the business rests in the hand of single entity without any interference of
government or any other external party (Charter, 2017). There are various types of public sector
like sole proprietor where the business owner run their family business and take effort to gain
adequate amount of profitability in order to lead their livelihood successfully instead of
expanding the business as they are less liked to take the risk. Along with that amongst various
types the other type is limited liability company where the company has distinct or separate
identity that help to create unique image of the company and the owner is not personally liable to

pay back their debts. In relation to the Tesco which is privately owned company are liable to take
all the internal decision and analyse the external condition in order to expand the business.
The primary purpose of respective company is to make the use of advance technology
and technique in order to remain competitive and survive in the huge competitive environment.
For which the company provide the huge place to the customer where they can get huge amount
of day to day products and cater their requirement by charging reasonable prices. Tesco exhibits
the corporate legal structure where the company has its own legal authority and has separate
legal entity.
Public sector within this type the company perform its functioning on the basis of
decision made by the government or local authority. The role of such organisation is to made
tremendous improvement within the society. Herein, NICE which is the acronym for National
Institute for health and care excellence is the public body that look after the clinic practices and
health promotion.
The main purpose of such organisation is to maintain the quality standard for the proper
functioning of social care system by adequate allocation of resources (Eifert, Gelb and
Ramachandran, 2015). Along with that there are various type of legal structure that exist in
public sector like local government, corporation or central government. Thus, NICE corporate
has adopted Central government structure in order to perform its functioning.
Voluntary Organisation is also referred as non-profit organisation which focuses on the
specific area in order to enhance the living status of the community by making special
programme and take action in order to eradicate problem from grass-root level. Oxfam is the
charitable organisation that focuses on the specific issue which is global poverty.
The purpose of such institution is to help the unprivileged section to enhance their
condition and rebuild their livelihood by making poor section aware of their rights as well as
responsibilities (Sun and Richardson, 2016). Herein, Oxfam organisation adopts the trust legal
structure where the trustee carries the business and take voluntary action in order to be legally
liable to meet the objective of non-governing organisation.

P2: Explain the size as well as scope of different organisation type
Tesco (Private Organisation)
Tesco company has huge size as it is one of the leading multinational companies of UK.
It remain functional in more than 11 countries and has approximately 6,000 retail stores that
cover different geographical region in each and every corner of both developed and developing
country. There are 4 lac employee who are the part of company and perform function in order to
maximise the revenue of company.
The company deliver immense product and service to the customer for which it hire most
potential employee in order perform the activities of business (Ward, 2015). Along with that it
uses advance technique as well as technology in order to widen the scope of company and
deliver its offering successfully. Further, the objective of company is to constantly identify the
upcoming demand of customer and satisfy them by offering valuable product in order to retain
the interest of existing and attract new one.
NICE (Public Organisation)
It is the public body that uses the health technology as well as indulge into clinic
practices for which it hires huge staff and look after the patients of England and Wales. Due to
the huge size and coverage area most the local resident avails the facility and get specialised
services.
The scope of company constantly expands for which the company uses technology and
adequate digital platform in order to take emergency action and reduce waiting time which is
preferable for both service giver and seeker. Thus, the aim and objective of respective company
is to enhance the quality of life and deliver the care to the people.
Oxfam (Voluntary Organisation)
Oxfam is the group of twenty charitable organisation which are independent but function
together in order to remove the global poverty issue (Falkner, 2017). Along with that there are
huge number of volunteer who are attached with the organisation that expand its size and help
the people to upgrade their living standard.
Additionally, the company has expanded its scope where it covers thirteen nations in
order to reduce poverty and widen the satisfaction of customer. This assist the people to remain
satisfied and cover all their needs effectively. The objective of company is to reduce the gap
between different classes of society and perform desirable actions against injustice.

TASK 2
P3: Interrelationship between different organisation functions
Organisation structure outline the different activities performed by the internal member in
order to perform their roles and responsibility suitably. It leads to better allocation of task by
maintaining adequate communication amongst employer and employee. There are basically
different types of structure such as hierarchy, functional, divisional, matrix and sso on amongst
which the Tesco company has adopted Functional structure.
Within functional structure the whole organisation is classified in different groups on
the basis of their role and responsibility. Each department is headed by the functional manager
who have expertise knowledge over the division such as marketing head or service head (Hillary,
2017). Thus, adoption of such structure helps selected company to maintain the adequate
communication and lead each group to perform challenging task successfully.
Interrelation of various function by linking to with the structure and objective is stated
below:
The role of marketing function is to understand the demand of customer and fulfil it by
modify the existing product or launching new ones. Along with that it helps in the promotion of
Tesco company to enhance its sales and long term profitability. This function is interrelated with
various other functions like human resource which hire the most suitable candidate and offer
them training in order to enhance their existing knowledge as well as capability. This help the
firm or the respective department to achieve the target of company like increase the footfall of
retail store through strong promotional technique (Functional structure of an organisation.
2018). Further, this help the staff of functional structure to remain interconnected, avoid mistakes
and coordinate with each other in order to accomplished overall objective.
Within operation function the member of Tesco company remain engaged to transform
the product and design it for the smooth operation of business. So in order to perform such
activity operation function depend upon the financial function with the help of which it receives
the budget on which basis of which it has to structure or restructure the product (Shenkar, Luo
and Chi, 2014). Such interrelation helps the different department of functional structure to
generate the best possible information which enhances their productivity. Hence, it assists the
firm to attain their objective effectively as well as efficiently.

Research and development function is one of the prominent functions of Tesco that
help them to determine the strategy by analysing the external environment, changing preferences
of customer as well as competitors move (Poon, 2016). Such department depends on marketing
function where it identify the existing product and determine how it can deliver value for the
long duration by meeting the constraint effective. This function is desirable for functional
structure as it share all the essential thought or knowledge which is favourable for the
functioning of different department. Therefore, this help the Tesco to fulfil its objective of
expansion by gaining competitive advantage over other competitors.
TASK 3
P4: Positive and negative impact of macro environment upon business
Political factor: Political factor refers to the tax rate or legislation activity that
affect the existence of company within the country. Due to the crises or insufficient
financial stability the local authority encourages the large companiesretail sector like Tesco
that helpo maintain in proper circulation of funds.
Positive impact: There are various large retail companyies like M&S that offer huge
employment opportunity to the various geographical area where it operates due to which
even the government take initiative to attract the existence of company.
Negative impact: In order to control the obesity, rate tthe UK government of UK
proses the fat tax on the retail sector which can adversely affect the sales of large Tesco
producompanies cts as after charging fat taxes the prices of final product increases.
Economical factor: This is one of the major concern which assist the company to
function on the basis of changing policies or factor as it directly and indirectly affect the
firm's performance (Pestle analysis, 2018(Pestle analysis of retail industry. 2019). In relation
to the manager of Tescowith the retail sector ascertain the market and different economic
condition on the basis of which it help to create value.
Positive impact: In order to increase the demand most of the retailrespective
companyies offers the loyalty card and set reasonable price to enhance the sales and retain
customer loyalty.

Negative impact: During the different economic cycle such as inflation when the
prices of commodities rises and the customer are less likely to spend the money. So that
phase affect the functioning of companyoverall retail sector.
Social factor: It include the preference or attitude of local community that need to
be analysed by the company before expanding their business in any other geographical
area. The manager of Tesco company which fall under retail sector analyse the family
preference and offered common platform from where people can experience wide shopping
experience.
Positive impact: With the advancement of technology and digital media people
understand the relevance of healthy diet due to which Tesco retail sector successfully
expanded its product line and offer organic food to cater the need of health conscious
people.
Negative impact: The preferences of people changes within a short span of time and
there are cost or time constraint for company due to which it is not feasible for the company
retail sector to constantly bring changes within short span of time (Hilton and Platt, 2013).
Technology factor: It include the innovation or role of technology that help in
determining new or more efficient ways to perform task. Tesco This helps to develop the
long lasting experience of customer like Tesco makes huge investment in adopting advance
technology like such as introduction of RFID to reduce the chances of lack of inventory.
Positive impact: Development of technology has helped the firm to undergo online
shopping platform with the help of which it can deliver the offerings at the customers place
that decrease the cost of company as well as employees.
Negative impact: Constant up-gradation of technology is somewhat time and cost
consuming for company. A as they need to give training to the staff in order to handle the
tool effectively. Along with that as the retail sector carries the huge data of customer so in case
of any critical issue like privacy breach can affect the reputation of company.
Environment factor: The company exhibit the pressure where they need to take care
of the external environment with the assistance of which they are able to perform their
business successfully. TescoRetail sector perform its functioning by making special
precaution for the environment, internal member as well as society.

Positive impact: The online presence or the concept of E-Retailing business has gain
huge recognition like Tesco has contributed to reduce the emission of carbon and by 2020 it
has the objective to reduce it 50%. Along with that the online presence has helped the
customer to reduce their travelling cost which lead to save in fuel.
Negative impact: It is complicated for the firm to abide by each and every law which
is related to the environment as it enhances their cost.
Legal factor: It is the legal legislation or law which is prepared by the government
that make it compulsory for each institution to abide by it successfully (Neubauer and
Lank, 2016). Tescohe retail sector makes effort to follow the government regulation legal
action or penalty can be charged against it.
Positive impact: All the products are proper labelled and packed by the company.
Along with that they make success implement of the various laws like health and safety
action for proper functioning of business.
Negative impact: Tesco As retail sector function in various part of countries due to which
they need to render various laws that can act as a constraint and act as a hurdle in the functioning
of business. has faced the legal actions for not follow the fair wages act for both the genders.
TASK 4
P5: Internal and external analysis in order to identify strength and weakness of Tesco
SWOT: It refer to the internal analyses that help the firm to identify itself on the basis of
strength and weakness due to which it can exhibit the opportunities as well as threat exists in the
external environment of an organisation.
Strength
 Tesco has leading market share as it has
global presence instead of remaining
dependent upon the home country it has
expanded successfully with the
emerging economies. Thus, due to
which it earns enormous revenue (Swot
analyses of Tesco corporation, 2019).
 The company remains keen to adopt the
Opportunity
 Tesco company can form partnership or
strategic alliance in order to wipe out
competitive pressure and attract the
customer in order to flourish the
business process.
 Tesco can intensively focus on its
online shopping platform by the help of
which it can cater the whole national

latest technology such as RFID due to
which it gets advantage of fast mover.
Further, deliver the goods and services
or offer value to the audience with the
help of online media as well.
and international market and enhance
their shopping skills.
Weakness
 Tesco being price leader adopts low
cost strategy which hampers its profit
margin. Although it has huge brand
image but in spite of that increase in
price can drop the profitability of
company.
 Due to the huge size of company it may
at-times had to experience the poor
management system which negatively
affect the performance of company and
its interrelationship with customer.
Threat
 As Tesco has expanded its business in
Asian market which is developing
market and often experience political
instability that can affect the existence
or profitability of firm.
 Along with that rising the price of raw
market cost increases the per head cost
of company and it cannot increase the
price which act as a threat to company
(Kenney and Neely, 2013).
P6: Strength and weakness of macro factors
Factors Strength Weakness
Political The political condition of the
developed countries are stable which
lead the Tesco to plan and
implement the strategy effectively
Any sudden changes in the
government regulation explicitly
affect the performance of firm due to
which they may experience lack of
adequate profitability.

Economical In order to expand and conduct
portfolio investment Tesco generate
the demand by gathering the
attention of customer and fulfil their
requirement.
Any change in the economic cycle,
taxation rate or foreign direct
investment create hindrance in the
performance of respective company
(Laudon and Traver, 2016).
Social With the increase in percentage of
female working outside the customer
are more prone to shop with the help
of online platform. Thus, the online
catalogue facility and proper display
of offer help the audience to shop
effectively which is time and cost
effective process.
The regular change in the preference
or attitude of customer creates
difficulty for the Tesco to sustain in
diverse competition.
Technology The manager of Tesco company uses
innovative technology in order to
promote the company by offering
quality or innovative services.
After a certain period of time the
existing technology gets obsoleted
that decreases the efficiency of
company. Thus, is one of the
weaknesses of technology that it
remains functioning fort a fixed
duration of time.
Environment The manager of company makes
special precaution for the
environment by controlling the use
of plastics and reducing the emission
of useful gases (Montaigne, 2014).
Different laws prepared different
countries restrict the functioning of
company.
Legal Tesco has implemented necessary
guidelines or take desirable action in
terms of the employee or packaging
act of the product.
The company normally binds with
various legal authority that restrict the
functioning of company as it case it
does not follow the law then legal
authority can take strict against it

(Yeh, Lee and Pai, 2015).
Porters Five Forces
This model is mainly uses to analyse industry under which company operate its business.
Tesco organisation uses the Porters Five Force model to understand the underlying profitability
levers of industry. The Porters Five Force model of retail sector given below:
Threat of New Entrants- In Retail sector, it is complex to attain economies of scale and
entry barriers is low. It is beneficial for the existing large companies like Tesco not to deal with
any kind of risk. It can be said that the sector related business environment is in the favour of
them.
Bargaining Power of Suppliers- In the retail industry, there are large number of
suppliers. They have less control on prices and also make the suppliers bargaining power. The
suppliers provides standard raw material at reasonable cost so that it can manufacture better
quality of goods.
Bargaining Power of Buyers- The buyers bargaining power is high due to the
availability of substitute products. There is a need with retail sector to keep its cost down in order
to capture the large market.
Threat of Substitute Products or Services- Convenient and small departmental stores can
develop trouble for an organisation to fulfil customers demands. Threat for the some companies
like Tesco and M&S is minimum as they have to developed their unique identity.
Rivalry Among Existing Firms- Intensity or competitive rivalry in retail industry is high,
Tesco fir faces intense competition of direct competitors consisting Waitriose, Asda, Morrison,
Sainsbury.
CONCLUSION
From the above report it has been determined that it is essential for the firm to study the
environment in which it function and take necessary precaution in order to influence the
functioning of business to sustain within compensative environment. Along with that there are
different types of the organisations that fall on different category such as private, public and
voluntary on the basis of their structure, scope and size that differ from one to another. Further,
for the effective functioning of business internal and external factor need to be effectively
analysed to enhance the productivity of firm.

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