The Business Environment - Analysis of Tesco and Vodafone

This report analyzes the business environment of Tesco and Vodafone, including their purpose, ownership, liability, scope, size, sector, products and services. It also includes a comparison of the two companies and their organizational structures, as well as an external analysis using PESTEL analysis. The report concludes with a discussion of strategic planning and performance.

The Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
1. Introduction to companies........................................................................................................3
2. External analysis......................................................................................................................6
3. Organizational structure...........................................................................................................7
4. Organizational planning and performance ..............................................................................7
5. Comparison and conclusion ....................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment consists of all the aspects or elements of surroundings of the
business which might have an impact or effect on the business operations. It is the aggregate of
all the conditions, influences and events which surround a business and effects it (Cepel and
et.al., 2019).
Tesco is British multinational retailer dealing in groceries in the retail industry. Tesco's
products involve supermarket, hypermarkets, superstores and convenience stores. Vodafone is
British Multinational company who provide telephone services in telecom industry. Vodafone's
products include fixed telephony, mobile telephony, broadband and digital and intent television
etc. The report will discuss about the companies, analyse their environment, organizational
structure and compare them to contrast their overall differences.
1. Introduction to companies
Vodafone and Tesco both are British multinational companies which are dealing in
contrasting businesses. The key information regarding both the companies is as follows:
Current conditions Vodafone- Vodafone is running smooth recently but it has been facing some issues such
internet issues in various counties. In some countries demand has been declining due to
internet coverage issues. However, no official news about these issues has been provided
by the company. Tesco- Tesco is running successfully and is also planning for its global expansion.
However, the company is still facing some quality issues.
Purpose: The purpose describes the intention of aim of the firm i.e. reason for existence. Vodafone- The core purpose of Vodafone is to connect for a better future and expertise
and also to scale unique opportunity of driving positive changes in the society. Tesco- The core purpose of Tesco is serving the customers, planet and communities a
little better each day.
Ownership: Ownership describes the state of rights and control over a business or organization
(Light and Munk, 2018). Vodafone- The ownership of Vodafone is Partnership. It has 30 business partners all
across the globe. Tesco- The ownership of Tesco is Public Limited Company.

Liability: It describes the right of the owner to use their personal assets to pay off a debt in case
of insolvency of the company. Vodafone- Vodafone have limited liability which means the personal assets of the owners
cannot be used at the times of insolvency Tesco- Tesco have unlimited liability which means the personal assets of the owners can
be used at the times of insolvency to pay off debts.
Scope: Scope refers to the extent of opportunity an organisation has to do something in the
future.
 Vodafone- The scope of Vodafone is to provide new generation connectivity and digital
services Tesco- The scope of Tesco is extension of its exiting market into which it sells its
services and products
Size of business: Size of business descries the scale of business operations which determines the
volume of sales and level of production of a company (Fung, Grekou and Liu, 2019). Vodafone- Vodafone is a large company with 17.2 million users. (evidence) Tesco- Tesco is a large food retailer with 2318 stores across globe.
Sector Vodafone- Vodafone comes under Quaternary sector which deals in providing
information services such as information and communications Tesco- Tesco comes under Tertiary sector as it offers services. However, it also comes
under secondary sector as manufactures and sells its own products.
Products and services: It describes the pertai8ns of distinctions made between different
businesses. Vodafone- The products of Vodafone include Fixed telephony, mobile telephony,
Broadband, Digital television, internet television, IPTV and loT
 Tesco- The products and services of Tesco involves Supermarket, Hypermarket,
superstore and Convenience shops.
why does the choice of ownership, scope and purpose leads to success of company
It is important to choose the right ownership as it impacts upon far reaching objectives
and tax consequences. Scope is important as allows the companies to estimate the costs and time
required for finishing their projects. Purpose also leads to business success as it provides the

companies better growth rates and higher productivity with a highly satisfied work force which is
loyal to the company.
What will choices depend upon Choice of ownership: The choices of ownership depends upon the risk factors and
willingness to bear legality of business (Kerr and Moloney, 2018). Choice of scope: The choices of scope depends upon two things which are nature of the
objectives of the company and the durability of those objectives.
 Choice of purpose: The choices of purpose depends upon divisiveness and trust of
customer’s company want to have.
The most important factor to consider which leads to business success is the choice of purpose as
the customers are driven towards the company from its core purpose. It provides the company a
goal and gives the employees a motive to attain that objective. It allows the customers to know
what the company stands for and provides a connection.
SWOT
SWOT analysis refers to the analytical tools which is used to identify how the internal
factors of a company can be used to deal with external factors. SWOT analysis of Tesco and
Vodafone is as follows:
Vodafone Strengths: strengths are the factors in which companies excels in. Strengths of Vodafone
includes its huge market coverage, high number of revenues generation, its premium
costs due to differentiation it offers to the customers and its massive customer base in all
around the planet (Thompson, 2017). Weaknesses: Weaknesses are the factors in which the companies lack. The factors in
which Vodafone lacks or defeats are its dropping subscriber base and brand valuation due
to network coverage issues in some countries and its poor performance as compared with
the competitors Opportunities: Opportunities are the factors which companies can attain to get potential
advantages such as competitive advantage. Some rising opportunities for Vodafone
includes the opportunity to tap rural markets and emerging markets as the population is
moving towards urbanization. Another opportunity is dependency on cellular phones of
the population on a large scale.

 Threats: Threats are the factors which have the potential to harm or influence the
business and operations of the company. The company also faces the threats of intense
competition and low margins in telecommunication industry.
Tesla Strengths: It describe the factors which separates the company form other competitors.
The factors in which company excels and provides benefits to its business includes its
financial turnovers, market share and its strong performance during pandemic. The
company enjoys its high innovative culture (Aiello, and et.al., 2020). Weaknesses: It describes the factors which stops the company to perform at its optimum
levels. The company faces some challenges such quality control, leadership changes and
the shortage of products due to panic buying in the pandemic.
Illustrati
on 1: Vodafone
Source: About Vodafone Group. 2021.

 Opportunities: These are the favourable factors for the companies. The company have the
opportunities of growth of online grocery sales and the introduction of AI and machine
earnings.
 Threats: These are the unfavourable factors which can harm the company. The company
faces the threats such as Brexit policy, economic recession and the pandemic.
2. External analysis
PESTEL analysis
PESTEL analysis is an analytical tool which is used to gain a clear picture of external
factors which can harm the business of a company. PESTEL analysis of Tesco and Vodafone is
as follows:
Vodafone
Illustr
ation 2: Tesla
Source: TESCO. 2021

 Political factors: The political factors which impact Vodafone are political pressure and
data regulations. However, the company has successfully maintained its significant
growth Economic factors: The economic issue faced by Vodafone includes high spectrum costs,
economic recession and effects of Brexit. However, the company have attained the
advantages of digital era and cellular dependency. Social factors: Social factors affecting the company includes Technical SME culture
which promotes local growth and improved digital economy (Evans and Mason, 2018). Technical factors: Technical factors affecting Vodafone involves introduction of 5G and
AI. Environmental factors: Environmental factors affecting Vodafone are its vision of zero
environment harm and safety culture. Legal factors: Legal factors affecting Vodafone are low interest rates and longer payment
tenures.
Tesco Political factors: The political factors which impact Tesco are impact of Brexit policy
and FDI regulations by some countries. Economic factors: The economic issue faced by Tesco includes global exchange
fluctuations and high wage rates (Pan, Chen and Zhan, 2019). Social factors: Social factors affecting Tesco includes rising single person households
and digitization. Technical factors: Technical factors affecting Tesco involves popularity of mobile
payments and introduction of AI in payments. Environmental factors: Environmental factors affecting Tesco are reduced plastic use,
sustainability initiatives and commitment to environment protection.
 Legal factors: Legal factors affecting Tesco are data privacy rules and IP laws.
The key issues which affect both the companies include Brexit policy, competition, economic
instability and economic recession.

3. Organizational structure
Organizational structures refer to the framework which outlines how tasks are directed in
order to attain a goal (Soderstrom, and Weber, 2020). The organizational structures of Tesco and
Vodafone are as follows:
Vodafone
Vodafone uses Matrix structure. It is a type of organizational structure in which the
employees report to more than one person. Basically, the structure has more than one supervisor
at the same time. It focuses on commercial and financial priorities which are customers and
shareholders returns.
Organizational chart:
Tesco
Tesco have a hierarchical organizational structure. The hierarchical organizational
structure involves the framework in which obligations and positions are divided into any parts so
that work can be efficient and smooth (Dedahanov, Rhee and Yoon, 2017). The top of pyramid
has maximum responsibilities and responsibilities. However, in some stores of Tesco, slight
differences in structure can be seen.
Executive
Functional
manager 1
Functional
manager 2
Functional
manager 3
Staff staff staff

Organizational chart
4. Organizational planning and performance
Strategic planning and performance
5. Comparison and conclusion
Comparison of Tesco and Vodafone
Basis of difference Vodafone Tesco
Ownership It is a Partnership business It is a Company business
Industry Telecommunication Retail
Sector Quaternary Tertiary and secondary sector
Focus It is Customer-oriented It is Growth oriented
Size Large multinational Large multinational
Technology impacts It faces High impacts of
technology such as 5G.
It faces Low impacts of technology
Political impacts It have High political impacts as it It have High political impacts as it
Executive
manager manager manager
Foreman Foreman Foreman Foreman Foreman Foreman

works in many countries works in many countries
Competition It faces Intense competition It faces Mediocre competition
Economic impacts It faces high effects of economic
impacts
It faces low effects of economic
impacts
CONCLUSION
From the above discussion it can be concluded that Vodafone and Tesco are contrasting
businesses which have huge differences in their purpose, ownerships, liability and scopes etc.
However, the companies face some key issues which are same for both the companies such as
competition, economic instability and economic recession. The companies follow different
organizational structures and have Strategic planning and performance. The overall comparison
of companies describes the basic differences of companies such as impacts.

REFERENCES
Books and journals
Aiello, L.M. and et.al., 2020. Tesco Grocery 1.0, a large-scale dataset of grocery purchases in
London. Scientific data. 7(1). pp.1-11.
Cepel, M. and et.al., 2019. Selected economic factors of the quality of business
environment. Journal of International Studies.
Dedahanov, A.T., Rhee, C. and Yoon, J., 2017. Organizational structure and innovation
performance. Career Development International.
Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan
Page Publishers.
Fung, L., Grekou, D. and Liu, H., 2019. The impact of immigrant business ownership on
international trade. Ottawa: Statistics Canada.
Kerr, W.R. and Moloney, E., 2018. Vodafone: Managing advanced technologies and artificial
intelligence. Harvard business school. pp.9-318.
Light, A. and Munk, R., 2018. Business Ownership versus Self‐Employment. Industrial
Relations: A Journal of Economy and Society. 57(3). pp.435-468
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering. 35(1). p.05018013.
Soderstrom, S.B. and Weber, K., 2020. Organizational structure from interaction: Evidence from
corporate sustainability efforts. Administrative Science Quarterly. 65(1). pp.226-271.
Thompson, P., 2017. Pie in the sky? The political economy of the failed Vodafone-Sky
merger. MEDIANZ: Media Studies Journal of Aotearoa New Zealand. 17(1).
Online references
About Vodafone Group. 2021. [Online]. Available through https://www.vodafone.com/about-
vodafone>. [Accessed on 25 October 2021]
TESCO. 2021. [Online]. Available through <https://www.tescoplc.com/about/>. [Accessed on
25 October 2021]