Business Environment Report: Tesco Plc, Bestway Group, and Fair Ways

This report delves into the business environment, analyzing various organizational types and their purposes. It examines three companies: Tesco Plc, Bestway Group, and Fair Ways, exploring their size, scope, and legal structures. The report is structured into four tasks. Task 1 defines different types of organizations, including public, private, and not-for-profit entities. Task 2 describes the interrelationships between organizational functions such as marketing, finance, and human resources. Task 3 analyzes the impact of macro factors, such as political, economic, social, technological, legal, and environmental factors, on business operations through a PESTLE analysis of Tesco and Bestway. Finally, Task 4 explores internal and external factors, examining how strengths and weaknesses interrelate with external macro factors. The report aims to provide a comprehensive understanding of the business environment and its influence on organizational success.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1.Different types and purposes of organisations:......................................................................1
P2.Size and scope of different types of organisation:.................................................................2
TASK 2............................................................................................................................................3
P3.Relationship between different organisational functions:......................................................3
TASK 3............................................................................................................................................5
P4.Impact of macro factors on the business operations:.............................................................5
TASK 4............................................................................................................................................7
P5.Internal and external analysis of an organisation: .................................................................7
P6 Explain how strength and weaknesses interrelate with external macro factors ....................7
CONCLUSION................................................................................................................................9

INTRODUCTION
In business environment, there are various types of organisation exist which perform their
business functions according to their formation criteria (Otoo and Drechsel, 2018). In other
words, company may be established in various categories like public company, private company
or not for profit organisation etc. In this report, three companies namely, Tesco Plc, Bestway
Group and Fair Ways are selected to define their respective scope. This report is divided into
four tasks, first task defines the size and scope of different types of organisations. Second task
describes the interrelationship of various functions within a company and its relationship with its
organisational structure. Third task explains the macro factors effect on the business processes
whereas forth task defines the company's internal factors and their interrelationship with external
macro factors to determine the company’s strengths and weaknesses.
TASK 1
P1.Different types and purposes of organisations
In the business context, there are various enterprises that may be incorporated for
different purposes. In these different types of organisation some are for not profit purposes also,
which main aims to serve the general public. Some of these organisations are as follows:
Public Company:
Tesco Plc is selected, it is a British based multinational public company which engaged
in providing groceries and general merchandise in the various countries. It is third largest retailer
in the world measured by gross revenue. Purposes and its scope are as follows:
 Purpose: The purpose of Tesco Plc is to support the customers and to be a champion for
customers, providing them better quality products and enhancing the standard of living of
the customers. The main purpose and goal is to ensure that company will provides a little
better services on each visit as compared to its previous visit. The other purpose of Tesco
Plc is to diversifies its shop which include Tesco Extra, Tesco Metro and the normal
Tesco.
Private Company:
Bestway Group is London based company which is operated in United Kingdom and
Pakistan. It is serving about 125000 independent retailers and caterers form 64 warehouses
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nationwide. Bestway Group is also run UK's third largest pharmacy chain (Otoo and Drechsel,
2018).
 Purpose: The main purpose of this company is to meeting customers needs,
honest and frequent communication within the organisation, focusing on
achieving business objectives. Company has a goal motivate and encourage the
people in the organisation to give their best and helps in creating leadership
quality.
Not for profit organisation:
For this category, Fair Ways plc is selected, it delivers a comprehensive range of services
to children and young people including social care, support, training and education services. It
provides unique self service tools, workshop programmes and engagement experts that assist the
other organisation in building their potential strengths.
 Purpose: Its purpose includes never give up in any situations, give value or respect to
every individuals working within the organisation as well as give value to each
individual customer. The main purpose of these organisation to serve well to general
public by providing good quality products and services and not to work for profit
rather than work for satisfying the need of customers.
P2.Size and scope of different types of organisation:
The size and scope of different types of organisation is different according to their legal
structures and working of operations. The size, scope and legal structure of different companies
are as follows:
Tesco Plc:
 Size and scope: In size, Tesco Plc is the third largest British company in retailer
sector in international market as well as in domestic market after Wal-Mart of
US and Carrefour of France. There is wide scope with Tesco because in last two
or three decades, company's growth has involved a transformation in its strategy.
Scope of this company's operation are very high to extent of its market in which
it sales products and services and also it has a wide market share in Asia and
Europe.
 Legal structure: Tesco is a large company, therefore its legal structure is also
large to ensure that its business processes is properly operated. One of legal
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structure is corporate governance, to maintain this, management should operate
the company in best strategic way to achieve the shareholders and stakeholders
need.
Bestway Group:
 Size and scope: Size and scope of this company is big as Bestway Group is
second largest wholesaler and having 64 warehouses nationwide and also it has
operated in another business sector. As a result, it has a wide scope of
diversification in the countries in which it is operated (Burayidi, 2013).
 Legal Structure: In context of Bestway Plc, its legal structure is large and includes
various functions regarding its formation and other related matter. Legal
structures also include labour and employees related laws and regulation that
applicable to particular geographical location, these laws and regulations should
be required to comply for efficient and effective working of business operations.
Fairways plc:
 Size and scope: In context of Fairways Plc, there is big size of this organisation
because its network of independent food distributors is large that serves catering
industry in the UK. There is a tremendous growth scope in the market because it
works for general public not for profit margin. Consequently, demand of its
products and services is very high among the people of UK.
 Legal structures: In context of Fairways Plc, legal structure has a essential and
important functions to ensure that there is smooth functioning of its business
operations.
TASK 2
P3.Relationship between different organisational functions:
In any organisation, various functions are needed to be undertaken within an organisation
like Tesco Plc, this is necessary for achieving company's goals, objectives and other related
matters. Details about some of these functions and there interdependency are as follows:
 Marketing Function
 Finance Function
 Human Resource (HR) Function
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Marketing function:
A marketing function of large size organisation may includes the various interrelated sub-
function, which includes market research, product development as per market expectation,
knowing customers needs, marketing of its product and services and advertisement and
promotion etc. (Hacioglu, Dincer and Celik, 2012). This function needs to be separately
reviewed by some personnel in the organisation for ensuring that funds of shareholders are not
utilised in wrong way.
Finance function:
This function is a part of financial management of Tesco Plc and it includes searching
new sources of finance for raising funds for smooth functioning of its operations, optimum
utilisation of its funds in the best interest of the company and other related matters. It is the most
important function because finance function cannot be substituted or eliminated because in the
absence of this function, business will close down. Consequently, it can be said as backbone of
the organisation.
Human resource (HR) function:
This is the most important function of any business organisation because it is the brain of
an enterprise. This includes recruitment of right person at right place, maintaining a safe working
place for its personnel, good employer-employee relations, compliance with various labour
related laws and regulations and after selecting the personnel providing them training and
development programmes (Hussin and et. al., 2017).
The inter-relationship between different functions within an organisation like Tesco Plc
are as follows:
Interrelationship between Marketing and HR function:
In an organisation, HR function is considered as an very important function because it
focuses on providing good personnel. Marketing and HR are not separate as people think to
extent of some points. For example, in a company, marketing department wants attract more
potential customers to increase its profitability and it may be possible through the help of HR
department as this department is responsible for having good quality personnel which are
ultimately responsible for good quality products and services (Anıl and Ficici, 2017).
Interrelationship between Finance and HR function:
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In an organisation, employee are responsible for creating values, belief and other related
matters. In this, HR department should support the employees needs and requirement to build a
healthy and strong environment. Finance department is responsible for raising finance for the
functioning of the company and HR department is responsible for effective and efficient use of
funds of the company. Therefore there must be a some inter-relativity between these two
functions for satisfying use of funds in the interest of its stakeholders.
In other words, it can be said that HR is to make sure that organisation has
resources with requisite skills and competencies. So that, funds raised by the finance
department is used for enhancing profitability of the company.
TASK 3
P4.Impact of macro factors on the business operations:
In any organisation, the macro environment affects the business operations in both
positive and negative manner. Therefore, there is need to forecast the these impacts of macro
factors, so that, organisation may take advantages from changes in macro factors in positive
manner and provide action plan in case of negative impact. Macro factors include various
external factors such as political factors, economical factors, technological factors and so on
which influence the working of an organisation. This can be understandable by doing PESTLE
analysis on the two enterprises which are Tesco Plc and Bestway Group. PESTLE analysis is as
follows:
Tesco Plc:
 Political factors: As Tesco has operated its operation in around 12 countries,
It has exposed very high risk relating to political scenario in these countries
that may affect its workings. These macro factors include unemployment
rate, current and impending legislation, political instability, Tax rates,
economic condition of the countries where it is operating.
 Economic Factors: Tesco Plc is a multinational company, consequently, it
suffers from various different economic conditions at different countries
where it works. One of such economical factors is labour cost, it may be
possible that labour cost in some countries higher and in some countries
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low. Therefore, it should select the persons from such location where labour
cost is cheap and low.
 Social factors: In different counties, there are different social values. a
product is preferred at some countries but it may happen that same can not
be prefer in some other countries. Also Tesco rely on UK customers, hence,
it should consider the social factors of other countries rather than UK.
 Technological Factors: In last few years Tesco is facing poor customer
experience because of old technology used by the company. But now, due to
technological advancement, there are new opportunities with this companies
which can increase its profits.
 Legal factors: In 2016, some workers of this company took a legal action
against company on the basis of age and gender discrimination. Workers
were extremely frustrated after noticed low pay rates for night, weekend and
bank holidays shifts. Apart from this, Tesco also faced legal action related to
accounting fraud. It can be said that after observing above cases that legal
factors has a vital influences on the company' working.
 Environment factors: Due to this factors, Tesco encourages its customer to
buy online and motivate the customers to reduce the unwanted plastic bags.
Bestway Group:
 Political factors: As Bestway plc is engaged in cement business, UK government
is clearly pushing this industry to have more affordable houses. Therefore, this
macro factors affect the company in positive way (Charfeddine, 2016).
 Economic Factors: In UK, construction industry has more than £100 bn turnover
and as a result, there is a positive impact of such factor on the Bestways Plc.
 Social factors: There is shortage of some skilled personnel within the construction
industry hence an effort is being made by all companies to hire young, talented
people. This initiative may affected by the social factor of that geographical
location from where skilled staff is hired by the company.
 Technological Factors: In recent period, company has seen the requirement of
technology advancement, hence, there is need of investment in filed of continuous
research and development to make better quality product.
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 Legal factors: There should be need to comply with various laws and regulations
for smooth functioning of company. These legal factors affects company much
more if not complied by it.
 Environment factors: Bestways Group Plc focuses more on this factor, because it
non compliance with environment factors may affect the company's future
working.
TASK 4
P5. Internal and external analysis of an organisation
For conducting internal and external analysis to find out weaknesses, strengths, threats
and weaknesses, there is a requirement of conducting SWOT analysis. SWOT analysis of a
company are as follows:
 Strengths: In this analysis, company like Tesco Plc shall identify those key business
resources which provides positive impact on the profitability of the organisation. It
should identify its key completive strength which provide competitive advantages to the
company. A competitive advantage give right to company to make higher profits and
creates monopoly in the market because this competitive advantages has not available
with its competitors. A continuous investment should required in research and
development filed to make new innovations in the products and services which results in
having competitive advantages.
 Weaknesses: In this part of analysis, company has to identify its key weakness in
business operations and processes and take corrective action to mitigate these
weaknesses. For eliminating weaknesses, there is a requirement to provide requisite
training and support to employees and management staff (Sood and Sukthankar,
International Business Machines Corp, 2013).
 Opportunities: In this part of analysis, company should consider external environment
that has a huge impact on business processes and operations. It should identify the
opportunities that is exist on the external environment.
 Threats: In this part of analysis, Tesco Plc shall identify all threats that are exist on
external environment. Threats are the vulnerability in the environment that causes denial
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of functioning of the company's main operations. Therefore, there is requirement to take
appropriate measure to eliminate these threats.
P6 Explain how strength and weaknesses interrelate with external macro factors
Tesco is an organisation which is operating at a global level. It is important for this
company to have a successful business in all countries (Toedt, 2014). Moreover, Tesco is a
multinational company and it is important fro this company to analyse internal as well as
external factors before starting a new business in any country. This helps in estimating the level
of profit which a company can make while it is starting a new business in other country. From
the above analysis it has been seen that two external factors political factors and social factors
affects operations and functions of Tesco. The strength and weakness of this company are listed
below -
Political factors – These are those factors which includes the government rules and
regulations that affects the functioning of any business. There are several rules abide by
government of the country which every company has to adopt so that functions and operations
can take place smoothly. In case of Tesco, it is a retail sector company and thus it is important
for this to follow all rules like tax policies, licensing practices, direct trades, etc. and implement a
successful business in every country (Vasilcovschi and Georgescu, 2012). There are some
countries where strict rules and regulations are followed and thus a pre evaluation of a country
helps to know whether it is easy to establish successful business or not.
Strength Weakness
 Tesco follows and adopts all
government rules and regulations so
that this company do not have to face
political disputes or conflicts. This
helps in easily operating and
functioning of business around the
world.
 Tesco follows all rules related to tax
factors, industry laws, labour laws, etc.
 Political factors of different countries
are different and this also becomes
weakness for many companies to
operate.
 If a country is having Unstable political
condition then productivity and
efficiency of employees as well as the
organisation is declined.
 The decision making approach of the
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so that no political issues or challenges
occur in this company.
company depends upon political factors
and thus a bad political condition is not
good for any company.
Social factors - The social factors are important to be evaluated so that the needs and
demands of customers are achieved in less time. The analysis of the social factors will help in
achieving the requirements of customers and building good relationship with customers. The
various social factors that affects a company are latest fashion, trends, technologies, required by
customers. The social factors influence the lifestyle and different elements of an individual life
such as family, community, religion, socio-economic status, etc. These factors must be evaluated
and analysed before starting a new business in a country.
Strength Weakness
The main objective of Tesco is to provide good
products and services to people for making
their experience good with the company.
There are various changes in trends, fashion
and lifestyle of customers. Also customers are
more advanced nowadays and they need to use
latest technique and technology for meeting the
needs and demands of the customers
(Warkentin, Sugumaran and Sainsbury, 2012).
CONCLUSION
From the above report, it is conclude that purposes of various organisations differ when
there is change in its structure, type such as public company and private company has different
purposes, scope and legal structures. It is further concluded that there is interdependency in
different functions within an organisation and it should be take into consideration by the
organisation. Macro factors like political, economical, legal factors etc. has an influence on the
working of an organisation in either positive or negative manner. Therefore, it should be consider
by the company and accordingly, take corrective action in case of negative impact. It is further
concluded that there is a need to conduct SWOT/TOWS analysis for finding internal weaknesses
and strengths and to find out the external threats and opportunities. There is a interrelationship
between internal factors and external factors.
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