Understanding the Business Environment - TESCO and HSBC Analysis

Understanding the
Business Environment

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Introduction to the business organization....................................................................................3
Types of business organizations (Legal Structure)..................................................................3
Main objectives and operations of the organization................................................................4
Market Structure......................................................................................................................5
TASK 2............................................................................................................................................5
Stakeholder Analysis of TESCO.................................................................................................5
Meaning of Stakeholder...........................................................................................................5
Meaning of Shareholder..........................................................................................................6
Stakeholder Analysis...............................................................................................................6
TASK 3............................................................................................................................................8
Business Environment Analysis of HSBC..................................................................................8
Importance of analysing the Business environment for HSBC...............................................8
PESTEL Analysis....................................................................................................................8
Porter's 5 forces competitive analysis......................................................................................9
Evaluation of the development of HSBC business with reference to short-term and long-term
performance...............................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business organization is an entity formed for the commercial purpose so as to earn profit
by engaging in commercial activities. An organization can be any company, public or private, a
partnership firm, an LLP (Limited Liability Partnership), or any sole proprietorship dealing in
the purchase or sale of goods or services (Bryson, 2022). It is imperative for every business
organization to analyse the external environment to measure its positive or negative impact on
the business and take corrective measures to improve the performance of business. It will
facilitate the company in getting competitive advantage in the respective industry it operates in.
This report is based on two business organizations i.e. TESCO and HSBC. TESCO is a UK
based multinational public limited company headquartered in England and dealing in the
products like clothing, grocery, home and food products. The report will describe the
organizational types , market structure and stakeholder analysis of TESCO. Further, it will also
cover the PESTEL analysis and Porter's competitive analysis of HSBC. It is a UK based
multinational universal bank and a public limited company headquartered in London, England
engaging in providing financial services i.e. banking commodities , insurance and investment
banking etc. The report will also describe the development of HSBC according to its KPIs.
TASK 1
Introduction to the business organization
Types of business organizations (Legal Structure)
Business organizations can be classified on the basis of their different legal structures.
The main types of business organizations on this basis are sole proprietorship, partnership,
company, LLP (limited liability partnership). Sole proprietorship is the simplest form of
organization that entirely depends on owners' decisions in which all the profits are of owner and
he is liable for 100 % debts of business (Geetha and et. al.,2022). For example, a local clothes
store, an IT consultant etc. Partnership consists of two or more individuals who invest in the
business and integrate the resources and execute the agreement to share the profits, losses and
risks in the agreed ratio. In this, each partner shares the total profits of business and partnership
gets end when any of the partners decide to end it. Example of partnership can be Red Bull & Go
Pro, Louis Vuitton & BMW etc.

Corporation or company is a separate entity and considered as a legal person that is
formed by a group of individuals to engage in the commercial activities of business. It can be of
two types public or private company. Public company is traded publicly on the stock exchange
and can invite general public to subscribe to its shares. Private company cannot invite general
public to subscribe to its shares and is owned privately (Rani and Narang, 2022). Examples of
public company are Amazon, Walmart, Marks and Spencer , Unilever etc. and that of private
company include Virgin Atlantic, Dyson, JCB etc. LLP is a partnership in which some or all
partners have limited liabilities, it has the elements of partnership as well as company. In this ,
each partner is not liable for other partner's misconduct. Example of LLP include auditing firms,
law firms, financial advising services etc.
The chosen organization is TESCO plc. which is a Public limited company and is
traded on London Stock Exchange. It is a multinational company operating in the retail industry
and dealing in grocery, clothing, home and food products. It is the third-largest retailer in the
world in terms of its gross revenues. The company has five shops in the Europe and is considered
as the market leader of groceries in the entire UK. TESCO has a market share of around 28.4%.
The company has a expanded business since 1990 on a global basis. It has operations in 11 other
countries worldwide. Since the year 1960, TESCO has diversified its operations in retailing of
clothing, books, electronics, petrol, financial services, telecoms, and internet services etc.
Main objectives and operations of the organization
TESCO is operating in the retail industry with major operations in UK in hypermarkets,
supermarkets, having TESCO express, Fuel operations and online operations as well. TESCO
extra shops are larger that can store all the wide variety of products of the company. Its largest
shop is in England i.e. TESCO extra in Walikden that has a floor space of 17230 square metres.
The company's supermarkets are standard large supermarkets that stock groceries and some non-
food products as well. The company also operates in various in-shop cafes and had also
introduces new restaurants in its shops from the year 2013. TESCO express are the convenience
shops that stock mainly the eatables such as chocolate, biscuits, sweets, processed food etc.
The main objectives of TESCO plc. include maximising the sales by ensuring increment
in the profits. Another objective is to ensure reduction in products prices to make shopping
cheaper for the average households. The main purposes of TESCO include to serve the