An Analysis of Business Environment Factors

This assignment provides a comprehensive review of the business planning-performance relationship in small firms. It includes a discussion of contextual factors impacting this relationship, as well as an examination of international business activity and its co-evolution with institutional environments. The analysis also touches on corporate social responsibility and sustainable development, including the role of sustainability orientation in entrepreneurial intentions.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1& P2 Covered in PPT.........................................................................................................1
TASK 2............................................................................................................................................1
P3. Relationship with the various functions and their relation with its goals and structure...1
P4. Positive and negative impact of macro environment.......................................................4
P5. SWOT analysis of Tesco..................................................................................................5
P6. Strengths and Weaknesses related to macro environment...............................................6
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Business is a term which involves any commercial, industrial or professional activity.
Businesses are run by the companies and they produce goods & services so that they can deliver
it to their target customers. In return these firms get profit in terms of money, so basically it is
the exchange of products for money. The money earned from the business operation are further
invested into manufacturing and other expenses (Al-Debei and Avison, 2010) . It is also
necessary that the activities which are carried out by the enterprise should be efficient and
productive. For this they require a suitable and appropriate surrounding framed as business
environment. It involves internal and external factors which directly impact them, so they have to
identify these factors. For this purpose organisation can carry out PESTLE analysis to know
about external elements. Internal components can be the employees working for them, their
policies and structure. There can be positive as well as negative impact of these on the
organisation depending upon the variations taking place (Becker, 2017). They have to design
their business strategy by keeping these factors in mind. This report will put light on impacts of
internal and external factors on the business environment. This thing can be better understood by
taking private, public and voluntary organisation.
TASK 1
P1& P2 Covered in PPT
TASK 2
P3. Relationship with the various functions and their relation with its goals and structure.
Every organisation forms their functions by keeping their goals and structure in mind. In
order to achieve all the decided goals and objectives every staff of the company is given different
roles which they have to play in the operations. This will help them in attain those goals in more
efficient way. They have to understand the importance of linking up the functions with the
organisational structure. With this they can expand there market and can gain sustainable growth.
TESCO is investing a large amount of sum on their functions because they know that if functions
will be performed well then they can easily move towards the path of sustainable growth (Boons
and et.al., 2013). They have to make sure that whatever activities they are carrying out does not
harm the environment. For that they will adopt the zero carbon business strategy by 2050 and in
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the past they have also have been appreciated for there Carbon Disclosure Project. There
management will play a key role in the this matter as they will be planning, organising, selecting,
controlling, monitoring and evaluating the activities for the Tesco.
During the task of planning, mangers will emphasize on various goals and objectives and
make sure that these are achieved in the time which was taken for the consideration. In the
business operations which they perform releases lots of pollution which harms the environment.
But in the urge of expanding their market and fulfilling the customers desire they are also willing
to give equal importance to the surrounding (Brinckmann, Grichnik and Kapsa, 2010). They
have to improve their functions and have to adopt new ways which can boost their performance.
Illustration 1: Annual Report, Tesco. 2017
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Tesco is one of the biggest organisation in UK so it is important that they should have
good organisation structure which clearly define roles and responsibilities of each person.
Currently, they are following tall and matrix structure which can be called as hybrid strategy.
This gives a flexibility to their operations and ensures that every department of the company has
sufficient amounts of funds to perform their tasks. They have divided their functions as per
different areas and the goods which they deliver. With this structure are gaining success in
managing their roles and functions.
Below mentioned are functions of TESCO and how they can help other core departments
of it.
Product: This department of the maintains the record of the good which are sold by the
TESCO company. They inform the sales department that what all products are required and what
are the demands of the customers. The marketing people also take reviews from them in knowing
which products is on trend. At the same time they also assure that people are coming to buy any
products does not face any difficulty.
Marketing and Sales: It is one of the core function which includes researching the
market and knowing what all things the customer want. In the same they also promote and
advertise their products. Their aim is to convince different customers to buy the products and
also build a need of it. They give their suggestions to departments like research and development
that what technology people want (Bryman and Bell, 2015).
Finance: They monitor and inspect the money which is flowing the business. Basically
they ensure that the financial resources available to Tesco are properly used. They allocate
budgets according to the estimation of the resources which will be used.
Customer Care: In the stores of Tesco consumer may face a lots of problems so it is
necessary for the company to resolve those issues because these can hamper their image which
will directly impact their sales. They have introduced a feedback system in the stores in which
the buyers can put a complain if they have faced any inconvenience or they can give any
valuable suggestions. These feedbacks from the customers are taken on a serious note by the
company as with this they can attract a lot of consumer (Cantwell, Dunning and Lundan, 2010).
Legal: This is the area in the Tesco which make sure that all the things are done in proper
way by considering various laws and policies. In a business environment there exists lots of
activities but if they are not performed by keeping rules and regulations in mind could bring legal
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trouble to them. Tesco have to look after the laws which are concerned with food and
environment.
P4. Positive and negative impact of macro environment.
Political: Tesco business can be widely affected if there is any political variations in UK
and the countries where it is operating their business. Due to Brexit the business has been
affected as there will be changes in the tax norms and companies will not be allotted to do free
trade. The unexpected elected results and terrorist attack has hit the sales of his competitors
which might be a good sign for them for a short period time but eventually their sales will be
also be affected in upcoming time (Carroll and Shabana, 2010).
Environment: This has a big impact on the organisation and if this factors is not
favourable in the business then it might shut down the company. They have to regularly keep an
eye on these factors which includes inflation rate, income of the individuals, recession, deflation
of the goods and services, share market and the data of the banks. They have to change this
according to them and make them favourable for them. All the functioning of the company can
be affected by this and that will bring losses to them (Cavusgil and et. al., 2014). They should
know each and every operation will involves spending of the money. Government has helped
TESCO during the crises because they knew that this is the company which caters the needs of
lot of people and has great significance in the economy of the country.
Social: There are lots of things which happens in the society and this will indirectly
effect the company. It is seen that people has become interested in travelling around the world
due to globalisation travelling has become an easy task. This is an advantage for the Tesco. Other
factors which can be part of this is the lifestyle of the people, their eating habits and etc.
Technological: They have to improve their supply chain as they are facing issues in it.
This factor is the crucial part of the business in this world where competition has increased. This
is the way by which they can increase their efficiency and deliver products at faster rate.
Legal: In UK there are lots of laws which are framed by keeping EU norms in mind but
due to Brexit these laws will not be implemented or will have a modification in them. This will
impact the companies because it will be very not easy for them to manage all their resources at a
same place. Whatever changes they are doing should be informed to the customers and their
should be a brief description about the ingredients on the cover of it (Elliot, 2011).
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Environmental: There is a bad reputation of the companies among people that they
pollute the environment from their operation. But things has changed organisation are adopting
different models so that with the financial development they also try to develop the environment
near them. Tesco also have to do so as use the resources in limited manner.
P5. SWOT analysis of Tesco.
Business environment is mainly categorised into two parts such as internal and external
in nature. Internal surroundings refers to, employees, higher authority, management system,
vision, mission, rules and regulations of an particular company. Along with this, external
environment of business firm in includes suppliers, competitors, customers and so more. In the
other words, working system of organisation affected by several factors and issues, due to it is
very important to properly analyse and evaluate them with the help do some appropriate methods
and techniques (Jahangirian and et. al., 2010). In the context of TESCO, its belongs to retail
industry, which is having largest geographic area across all over the world. For identifying and
determining company's strengths, weaknesses, opportunities and threats, so SWOT method can
be used.
Strengths
 Economies of scale: This is one of the
leading and largest retail organisation
in UK. Economic scale of this company
is large as compare with others.
 Strong global brand: TESCO is one
of the leading brand in whole world.
Due to, this company provides
consistency in their products, so that
consumers can get same quality of
products.
 Diversified income: Since, this
company is large because it has been
open their franchises in different areas.
With the help of them this organisation
of profit level is regularly increase.
Weaknesses
 Negative publicity: This organisation
has always try to maintained perception
of customers that its some products are
unhealthy and harmful for health.
 High employee turnover: Employees
or workers of TESCO are low paying
and unskilled. That's why most of
employees are dose not take their jobs
and works as seriously.
 Customer looses due to fierce
competition: TESCO has be to face
high number of competition in external
market place. Because this industry has
includes several strong brand name.
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 Legal action: This company includes
high number of lawsuits and other
many legal cases, which all are
negatively impacts on company's brand
image.
Opportunities
 Growth of the retail industry: In the
recent time period, regularly growing
retail industry across all over the world.
Also change the life style of people,
which leads to change person's thinking
and requirements (Kolk and Van
Tulder, 2010).
 Conservation: This organisation
should use research green energies and
green packing solution in their working
system.
 Growing industry: This organisation
has an effective opportunity to expand
their business in other market place. As
well as it can be used online shopping
technique in their working environment
for systematically supply products and
goods for customers.
Threats
 Economic changes: Currency
fluctuation and economic recession is
one of the major threat for this
organisation. Because economic
condition is unstable in nature which is
totally depends upon market situation.
 Foods and products price are growing
around the world, which is also impacts
upon customer's buying level.
 Rising raw material and machinery cost
are also major threat for TESCO's
probability and income level.
 One of the major threat is governmental
rules and regulations, which negatively
impacts on business firm and their
working system. Sometimes
organisation can feel some restriction
while completing their task because of
legal rules.
P6. Strengths and Weaknesses related to macro environment.
Tesco has expanded their market all around the world and to keep this growth continue
they have to know what are the external factors which can impact them. They have no control
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over these but they can evaluate those through PESTLE analysis and can shape their strategies
according to it. They can interrelate them with their strengths and weakness. TESCO can gain
competitive advantage through this procedure (Kotler, 2011).
Political: It is such a big organisation and has a good presence in the Asian and European
markets. Generally it is observed that countries who are part of Asian subcontinent faces a lot of
political unrest so this highly affect the Tesco. There ability to expand has reduced but that does
not mean they should avoid these factor. They need to again update their strategies and make
them flexible so that there is less impact of such things.
Economical: After the financial crises the economy of UK has shown a growth and this
can be seen from growth in the country's GDP. This is a positive sign for the Tesco as it also
increased shares of the grocery market for the first time in 5 years (Kuckertz and Wagner, 2010).
There market share increased from 28.15% to 28.3% and also helped people to get employed in
the company. With increase in the spending power of customer Tesco has been benefited this has
increased their sales.
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Illustration 2: Martin Robinson, 2015

Social: It is observed that the employees of the company are not getting proper salary
which is resulted into low moral and they are not able to person well. As a appraisal and
motivation the staff which are working better should be given bonus. They have decide to adopt
CSR model for their unit as they experience their full responsibility towards environment. They
should try to develop the communities which are living near the areas of the stores of Tesco.
Technological: This is a factors which can give them biggest advantage and help them in
increasing their efficiency. With this they will able to cater a large number of people and will
save their time also. They can use new devices and gadgets which will help them in reducing the
paper work and will help them to implement their CSR strategy (Lankes, 2011).
Legal: To make sure that they don't face any legal issue they have appointed a team of
legal advisors who are working for them to make it sure that all the rules and regulations made
by the government is followed by the company. They guide their store workers that no one
should abuses or misbehave with the customers. On the same time they also take care of the
satisfaction of employees.
Environmental: There are lots environmental laws which is made by the government to
conserve the environment from the industrial activities. TESCO has always preferred sustainable
development strategy to show their full dedication towards environment (Meskendahl, 2010).
Every year they releases a report which shows that how much carbon they are releasing from
their activities. This way they are keeping a transparency and continuously reducing their carbon
emission.
CONCLUSION
From the above mentioned report it has been concluded that for a developed economy it
is necessary that the its business environment should grow in positive way. With this the
organisation which are part of this should experience growth. These companies may be private,
public and voluntary depending upon their purpose. They should be well versed with their
internal and external factors prevailing in the business environment. For this they can carry out
PESTLE and SWOT analysis of their business and if they want to exercise full control over them
it is important that they should assign their employees roles and responsibilities by keeping goals
and strategies in mind.
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REFERENCES
Books and Journals
Al-Debei, M. M. and Avison, D., 2010. Developing a unified framework of the business model
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Becker, K., 2017. Editorial. Journal of Transnational Management. 22(1). pp.1-3.
Boons, F and et.al., 2013. Sustainable innovation, business models and economic performance:
an overview. Journal of Cleaner Production. 45. pp.1-8.
Brinckmann, J., Grichnik, D. and Kapsa, D., 2010. Should entrepreneurs plan or just storm the
castle? A meta-analysis on contextual factors impacting the business planning–
performance relationship in small firms. Journal of Business Venturing. 25(1). pp.24-
40.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Cantwell, J., Dunning, J. H. and Lundan, S.M., 2010. An evolutionary approach to
understanding international business activity: The co-evolution of MNEs and the
institutional environment. Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A. B. and Shabana, K. M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management reviews.
12(1). pp.85-105.
Cavusgil, S. T. and et. al., 2014. International business. Pearson Australia.
Elliot, S., 2011. Transdisciplinary perspectives on environmental sustainability: a
resource base and framework for IT-enabled business transformation. Mis quarterly.
35(1). pp.197-236.
Jahangirian, M. and et. al., 2010. Simulation in manufacturing and business: A review. European
Journal of Operational Research. 203(1). pp.1-13.
Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and
sustainable development. International business review. 19(2). pp.119-125.
Kotler, P., 2011. Reinventing marketing to manage the environmental imperative. Journal of
Marketing. 75(4). pp.132-135.
Kuckertz, A. and Wagner, M., 2010. The influence of sustainability orientation on
entrepreneurial intentions—Investigating the role of business experience. Journal of
Business Venturing. 25(5). pp.524-539.
Lankes, R. D., 2011. The atlas of new librarianship. The MIT Press.
Online
Business Environment. 2017. [Online]. Available through: <http://businessjargons.com/business-
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Company business structure. 2015. [Online]. Available through:
<https://www.business.qld.gov.au/starting-business/types-legal-structures/legal-
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Annual Report. 2017. [Online]. Available through:
<https://www.tescoplc.com/media/392373/68336_tesco_ar_digital_interactive_250417.
pdf>. [Accessed on 4th August 2017].
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Martin Robinson. 2015. [Online]. <Available
through: <http://www.dailymail.co.uk/news/article-2901564/Superstores-crisis-Tesco-shut-43-
stores-country-including-head-office-sales-slump-M-S-posts-massive-5-8-slump-sales-
disastrous-Christmas.html>. [Accessed on 4th August 2017].
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