Business Environment: Analysis of Internal and External Factors and Their Impact on a Business Entity

Business
environment

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO3..................................................................................................................................................3
A brief analysis of different internal and external environmental factors and their influence on
a business entity...........................................................................................................................3
LO4..................................................................................................................................................5
Several ways in which a business can impact on external environment that is present outside a
business organisation...................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is the composition of different elements and factors that are
associated with functioning of a business at the marketplace. It is very much important for the
management to analyse business environment in a precise manner to achieve different
organisational goals and objectives (Akhtar, 2018). It is necessary for a business entity to focus
on both external and internal environment for majorly dealing with different organisational
situation. The risk associated with the operations of a business is also determined with the help
of external and internal environment of a business. A business organisation must take help of
professional strategic management in order to predict impact of external business environment.
In this project there is a brief explanation given about external and internal environment of a
business. In this project example of Tesco is taken into consideration for better understanding
marketing operations. Tesco is a multinational retail company which was founded in the year
1919 and it deals in selling quality retail products in the global market.
MAIN BODY
LO3
A brief analysis of different internal and external environmental factors and their influence on a
business entity
External environment analysis
It is the major responsibility of management which is working for Tesco to analyse external
business environment with help of PEST analysis. The PEST analysis of Tesco is mentioned
below:
 Political factors- These factors are related to rules and regulations which are formulated
by the government of concerned country. Tesco is majorly impacted by stability and
instability of government in different countries. The company must take support of
human resource management for achieving professional employee management in order
to develop business operations (Gaganis, 2019).
 Economical factors- Tesco is mainly affected by different factors that are present in the
economy of economic nature. The monetary policy which is developed by the
government impact on several financial aspects of the business. It is the major