Environmental Analysis and SWOT Analysis of Tesco

The assignment focuses on conducting an environmental analysis of Tesco using the PESTEL framework, identifying the company's strengths and weaknesses, as well as its opportunities and threats. Additionally, it performs a SWOT analysis to assess the company's position in the market. The report also discusses the importance of environmental factors in business operations and how they can impact a company's success.

BUSINESS & BUSINESS
ENVIRONMENT

Index
Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1.Explain different types and purposes of organisations..........................................................3
P2 Size and scope of different types of organisation .................................................................5
TASK 2............................................................................................................................................5
P3. Relation between different organisational departments and its objectives...........................5
P4 Positive and negative impact of macro environment on business.........................................6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of Tesco:.................................................................................8
P6 Interrelation of strength and weakness with external macro factors......................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business and business environment are the important factors which can influence the
business and its operations. All internal and external environment factors can affect the
organisation(Bennett, 2014). In this report chosen company is Tesco and it is a grocery retailer
who established its business in United Kingdom. The aim of this report is to analyse the current
environmental factors of the company. It covers the following topics such are as follows:
different size, types, and scope of organisation, functions of organisations and its structure and
impact of macro environment factors.
TASK 1.
P1.Explain different types and purposes of organisations
There are three types of organisations which are as Private, Public and voluntary. The
types, purpose and legal structure of all companies are different from each other. Companies
have to follow the rules and regulations according to the law of that country in which it operates
its business. Different types and purpose of different organisations are as follows:
Public company:
Public company is that in which government controls the business activities of the
organisation. NHS company is a company dealing with public sector. In this, they are producing
governmental services and public goods with state owned enterprises provided to customers.
They are leading with commercial basis and usually operate services. NHS company deal with
health care services. This sector company motive to deal with providing services in public
manner. Their motive is to control enterprises. In general basis this sector includes ownership
rather than functions(Boshyk, 2016). Public authority and implementing policy is two major
functions deal by this government agencies.
Private Company:
Private company is that who is fully control and managed by the owner of the
organisation. It is a grocery retailer company who operates its business in various countries
across the world like: Malaysia, Lotus, Hungry etc. It is company issuing stocks which having
shareholders. The company is owned by non governmental organisations. It is general public
stock market exchanges. The purpose of the organisation is to be the champion and helping
consumers to enjoy a better quality of life and an easier way of living and “serving customers a

little better every day”. It has to follow the rules, regulation and laws as per the requirements of
central government and state government and companies law of United Kingdom. It is essential
for it to follow all the legal obligations which are needed to be maintain and follow by the public
companies(Charles Jr, 2017). Legal structure of private company are as follows:
 Partnership: Partnership is an mutual agreement between two or more people who want
to carry the same business. Profit sharing ratio is based on the partnership agreement or
capital contribution by each member.
 Sole proprietorship:This type of business is managed by the single person that is the
owner of the company. It has fully control in its business and profit and loss is wholly
distributed to him. Limited companies: Limited companies are those companies which are either limited by
guarantee or limited by shares. The liability of members is depend upon the unpaid
amount of its shares which has been pending to pay.
Voluntary Organisation:
It is that type of organisation which is incorporated for the aim of social welfare of
people. It is established to serve the society and profit earning is not the motive of the company.
Oxfam is a voluntary organisation which is incorporated to minimise or remove the poverty from
the society as well as country. It is involved in various activities like: advocacy, disaster relief
and policy research(Schmidheiny and Watts, 2017). The maim purpose of company is to conduct
educational programmes to aware the persons and remove the poverty from the society.
 Legal structure:
1. All members are the trustees of the organisation.
2. Trust deed.
 Unincorporated association:
1. It is binding by contract and constitution of the country.
2. Trustees
 Charitable Incorporated Organisation:
1. It is regulated solely by charity commission of country.
2. Legal duty have to be followed by the members.

P2 Size and scope of different types of organisation
Their are different organisation working on scale such as micro, small, medium and large
working for a single motive. Tesco is running their business with a motive to achieve
organisational objectives(Chorafas, 2016). Each level of company has their own size and scope.
Organisation with micro level deal with fewest 10 employees working small enterprises with 50
employees and medium size is fewest than 250 employees.
The objectives of different types of organisation is to cover wide range of activities by
having sophisticated technology. Their aim is to amend successfully in both micro and small
sectors. They are strengthening support in an order to develop enterprises for small sector mainly
consisting with micro enterprises. Company Tesco has intensified competition within the sector
which resulting excess of supply leading profitability. The sectors in either micro, small, medium
and large running in whole sale purpose by constructing activities.
They hold reservation policy of SME industries. In this, they can go through in expanding
units of production. Tesco is running in each sectors of an organisation for obtaining goals and
objectives. Each infrastructural activities is dealing with transporting, communicating and on
other public utilities. Main objective of different organisation to make growth in existing units by
expanding new entry of firms. Company has to lead with manufacturing, servicing, retailing and
financing activities. The scope of organisation are consider as under.
 Opportunities with low investment is made by generating immediately on a large scale.
 To reduce unemployment problem from country.
 Promoting regional development in whole country.
 Organisation ensure in making equal distribution of national in come.
 To make effective utilisation for untapped resources.
 Improving standard of living of peoples.
TASK 2.
P3. Relation between different organisational departments and its objectives
It is very important for the company to make effective relationship between all
departments and its functions(Finney, 2014). So that it can work smoothly and able to achieve its

organisational goal. An organisation like Tesco, it is necessary for it to grab more market share
by increase its profits. Relation between different departments of company is described below:
Marketing with human resource:
There are relation between human resource and marketing department of company. All
activities are performed by the persons in the organisation. In context to Tesco, human resource
department can help the company to recruit the appropriate persons so that they can do
marketing of it. It can help to organisation to improve its brand image and reputation in global
market. So it is very important to establish better relations between both the departments and it
can help the company to achieve its objectives which is earning more profits.
Operations department with finance:
Company have to perform various operations on day to day basis and for that finance is
required so that all work can be done smoothly and effectively. In context to Tesco, its finance
department has enough fund to meet the requirements of operation departments. Management
want to introduce some more grocery products in its all grocery shops around the world so that it
can generate more revenue. Finance department of organisation is able to provide the funds for
that investment so that it can able to achieve its objectives which is expand its market share.
Research and development department with marketing:
Research and development department can help the company in the marketing of its
products and services so that more persons can be aware about the company. In context to Tesco,
its research and development department can provide the information to the marketing
department about the capacity of its competitors and the fashion, food habits and demand of
consumers(Lee and Klassen, 2016). So marketing department can do marketing of the company
on the basis of such things and make the promotional strategies to aware the persons about the
products of organisation. It can help Tesco to achieve its objectives which is to gain competitive
positioning in the market.
TASK 3
P4 Positive and negative impact of macro environment on business.
Macro environment consists of external factors which affects came on working
operations of company. It may consists of political, economical, social, technological,
environmental and legal factors in which business is involved. Tesco involved two basic impact
came on environment either positive or negative are stated below(Business environment. 2018 ).

Political: they are running and changing by government orders. These factors are dealing with
trade policies, labours, political stability, trade restrictions etc. Their impacts are as follows. Positive impact: On political basis governmental policies effect came on companies.
Tesco company which makes positive impact on achieving revenues generating by
government policies.
 Negative impact: Negative impact came by political forces by reducing government
stability(Makkonen, 2014). Political forces impact came on tax policy and trade controls.
Economical: Tesco faces economical factors like rate of inflation, interest rate, economic growth
rate and foreign exchange rate which impacts on directly to the company. This impact came on
economic performances. Positive impact: it plays a sign in increasing income by adopting changes in ensuring
sustainability in competitive market. Tesco company deals with an economic situation
which increases financial gain.
 Negative impact: The company is their in order to lead with inflation rate. Due to this,
they may occur negative aspects in a company.
Social: These are the factors lie on cultural aspects, distribution in ages and many more. In this,
customer needs and wants are changes to be focused in order to fulfil. Positive impact: The positive impact is their with customer tastes and preferences to be
fulfil. Which helps in maintaining public opinion and social attitudes towards changes.
 Negative: In this, it doesn't carry out business as per customer needs and wants. For this
company suffer losses and arises at the stage to wind up.
Technological: The new upgraded technologies is used by research and development. Tesco
uses in order with reducing communication costs and increasing use of internet. Positive impact: Upgraded technologies are used in form of achieving growth in market
by Tesco. The modern systems lead in enhancing productivity and lowering costs of
product.
 Negative impact: Negative impact is made on technologies with costly prices which
companies may not afford for their use.
Environmental: Company Tesco is leading with environmental aspects. They has proven best
strategy in increasing sales revenue to keep environment health and customer safety. Positive impact: It has proven best strategy to increase sales revenue.

 Negative impact: Non friendly environment makes company higher negative aspects.
Climatic changes, health hazards, wastage of products etc.
Legal: In this, government carries business operation with law and regulations which refers to a
legal environment(Park, 2015). It includes regulatory actions with positive and negative effects.
Company analysis and identifies factors. Tesco leads with all legal aspects in continuing process. Positive impact: business operation is working under legal environment to generate more
profits will tend to operate in business. Tesco shareholders invest more and more by
leading legal and ethical concepts.
 Negative impact: they make poor image in market by dealing with illegal practices.
Tesco is additionally increasing employee turnover.
TASK 4
P5 Internal and external analysis of Tesco:
In every organisation it is an important to analyse internal and external factors based on
accomplishing target for achieving predetermine goals(Popesko and Socova, 2016). Tesco has
taken concept in analysing internal and external factors of business includes strength,
weaknesses, opportunities and threats. This SWOT analysis is done for analysing factors to
minimise weakness and increasing strengths.
Strength: Tesco stated strengths in order to make clear image of brand, multiple presence and
opting private labels etc. Clear brand image: company powerful strength is its brand image in market. They itself
providing higher values of products. In this, they are examining unique image in order to
make customer interaction. Private labels: The strength of company lead each category of product in collection.
Their producing Tesco a different and unique image in market.
 Multichannel presence: the strength of company is to render goods and services to final
customers(Pounder, 2015). Tesco involves in operating store and simply products
provides to a large range of customers.
Weaknesses: they lie an impact on company by having inability to deal with customer
satisfaction or in discriminating to foreign markets.

 Inability to penetrate successful in foreign market: product of Tesco is unable in
making focus on designing. This has proven a major weakness in Tesco.
 Customer satisfaction: customer dealing by exhibiting lower level of satisfaction in
having policy issues. Tesco resulted in poor quality of brand for company.
Opportunity: It refers to the environment concerning with an increasing returns that leads
opportunities of Tesco. Their involves developing markets, industry lifestyle trends, global
influences, geographical export and import. The New segment: In this, it involves day to day dealing with demand of customers by
making new segments in focusing attraction. Tesco main motive is to enhance market
share.
 Innovative: Tesco is dealing with an innovative approach by increasing customer
attraction toward product. An innovating opportunity is made according to the demand in
market place.
Threats: They are the factors which are hazardous for management in developing and growth of
Tesco. Threats may lie from entering of new competitors in market, increases bargaining power
of customers, technological changes etc. (.Prajogo, and Oke, 2016). Tesco company facing
obstacles, political impacts, environmental impacts, new technologies, services and market
demand.
P6 Interrelation of strength and weakness with external macro factors
Strength and weaknesses are interrelating with macro factors. The external factors are
handling with political, economical, social and technological aspects. In this, strength and
weaknesses are interrelating with macro environment. Their are different aspects in order to
stimulate factors which relating in a manner to find strengths and weakness of an organisation.
In Political factors, Tesco has trade policy which is changed by government. Company
has achieved strength by making clear brand image and unique labels which are relating with
macro environment. The weaknesses of an organisation is in order when Tesco is incapable to
penetrate market successfully. Here company has to opt the changes made by government.
In economic factor, the clear brand image is made by Tesco lead growth in economy. It
handle strengthen support by making new or unique brand of product. It has one of the
imperfection due to economic conditions having inability to discriminate in foreign countries.
Tesco is taking place in order to interrelate strength and weaknesses.

Socially Tesco is depended on presence of multichannel in order to create awareness
about the product in market by providing accurate information. The choice of product is made by
selecting with consideration by having age prospect. Weakness take part in returning of policy
issue which purchased by customers of Tesco. This made customers dissatisfied. Strengthening
is their for generating online services according to the products marked(Rowell, 2017). In this
basis, customer tastes and preferences changes according to environmental variations.
Strength and weakness of Tesco are relating with technological aspects by adopting and
operating activities which takes place in technological changes. Strengthen support for Tesco is
that, they are leading with foreign markets and adopting those technology in producing products.
Their weaknesses is made by using poor technologies for production. They are the factors in
which strength and weakness impacted.
As per external environmental factor is considering an environment in increasing quality
of product is property for a company. Strength and weaknesses both are interrelated with this
factor. The dynamic changes made by environment is to deal with an effective purpose of
leading changes in market product as per environmental conditions.
In legal basis it is a major strength of company to make clear image by legally published
by government. The operating activities are based in a form to carry products with legal purpose.
Weakness for an organisation in this factor that Tesco company may not adopt illegal practices.
Tesco leads employee turnover which is one of the biggest weakness in this macro factor.
CONCLUSION
From the above mentioned report it is conclude that, environment plays a vital role in an
organisation. By which a business can run smoothly. External analysis is done in a manner to
accomplish goals and objectives. The PESTEL analysis is based on positive and negative impact
made on environmental basis of company Tesco. In addition to this, analysis is also done by
interpreting strength and weaknesses. In lastly, interrelation is made on the basis of macro factors
by determining SWOT analysis. An organisation lie in different forms are explained in this
report. The sectors in which they are divided with having different size and scope.

REFERENCES
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