HND Business Environment Report: Tesco Supermarket Analysis

This report provides a comprehensive analysis of Tesco's business environment, encompassing various aspects of its operations and strategies. It begins with an introduction to the business environment and its impact on organizations, setting the stage for a detailed examination of Tesco. The report delves into the organizational functions within Tesco, highlighting planning, organizing, leading, and controlling processes and their interrelationships. Furthermore, it employs a PESTLE analysis to evaluate the political, economic, social, technological, legal, and environmental factors influencing Tesco's performance. The report also conducts an internal and external analysis using Porter's Five Forces to assess the competitive landscape. Through these analyses, the report identifies Tesco's strengths and weaknesses, providing a holistic view of the company's position within the market and its ability to adapt to various challenges. The report concludes by summarizing the key findings and insights gained from the analysis.

BUSINESS ENVIRONMENT
Table of Contents
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Table of Contents..................................................................................................................................2
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
P1 and P2.........................................................................................................................................3
P 3 Functions of the organisation with organisation goals and objectives......................................3
TASK 2.................................................................................................................................................4
P 4 PESTLE analysis.......................................................................................................................4
P5 Internal and external analysis of the chosen organisation..........................................................6
P6 SWOT or TOWS to identify strength and weaknesses of the chosen business.........................8
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................11
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INTRODUCTION
Business environment depends on the demand of their products and services which categories
in different manner. In this way, several types of elements need to be carry for developing outcomes
and results in successful manner (Dima, Grabara and Modrak, 2014). Business environment
affected by number of elements which impact either positively or negatively to the operations and
functions. Therefore, it can be stated that it includes number of activities which performed by the
environment which can be create impact on the organisation performance.
In this context, present report based on the Tesco supermarket which provide different types of
retail products in the market. Furthermore, they are also providing different category in same
products to enhance their profits and revenue within the market. For gaining insight knowledge of
the company, present report covers different types of organisations and their purposes within the
market. Furthermore, it includes background details, products size and many other activities which
could be impact on the selected firm. In addition to this, it also determines functions which carry in
business to produce effective results in it. At last, report based on the scenario which includes
PESTLE analysis that impact on the organisation.
TASK 1
P1 and P2
Covered in ppt
P 3 Functions of the organisation with organisation goals and objectives
In the Tesco, there are different operations done with performing several functions at
workplace. All functions are interrelated in the business because it done with goals and objectives
that are previously address by the firm (De Villa, Rajwani and Lawton, 2015). In this way,
following are different functions performed by the chosen organisation to accomplish outcomes.
Planning: Planning is the main function, which need to be deal in significant manner.
Managers plan their objectives and goals to accomplish targets. Leaders mainly decide to plan their
process so that competition can be performs in positive aspect (Kozubíková, Belás and Virglerová,
2015). A division can be enhances entire company to increase customer loyalty in market. In the
Tesco, retail manager can make loyalty program 15% increasing to decide the goals.
Organising: In this aspect, the management functions entails with gathering the resources
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which require at workplace. In this way, manager of the Tesco need to demonstrate their operations
with structuring arrangement of human and material through they can plan objectives (De Villa,
Rajwani and Lawton, 2015). When objectives are continue enhancing, job satisfaction increasing
and turnover decreasing. Manager can also take help from the outsider’s consultant. They are
scheduling the all activities according to time and plan is related with ascertain effective results. In
this way, roles and responsibilities can be delivered according to interest area of qualification as
well.
Leading: Leading is all about the communicating the plan to employees and also advising
them to develop their performances towards Tesco objectives. In this way, managers try to motivate
people to perform several tasks that are required to accomplish goals and objectives (Dima, Grabara
and Modrak, 2014). Leading ability require to people to telling employees what need to be done in
significant manner. Leaders carry their several functions and operations which needed for
addressing concern and showing positive enthusiasm. Employees of the chosen organisation can ask
about what are they performing in significant manner. Leaders often cannot carry with planned
objectives to develop teamwork (Ji-fan Re, Fosso Wamba and Childe, 2017).
Controlling: It is all about the measurement of the performances results against the planned
objectives and goals of Tesco. Actual performances of the business carry with management goals
which need to be corrected in significant manner (De Villa, Rajwani and Lawton, 2015).
Controlling is always reactive action in which managers intervene to carry their plans and goals to
accomplish goals and objectives. They can also perform results as the reactive action which done
with carrying the plan in business unit. Intervention also necessary when actual performances will
be fallen. With developing goals and objectives, targets can be achieve easily (Kozubíková, Belás
and Virglerová, 2015).
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From the above organisational chart, it can be stated that there are several functions perform
by Tesco for accomplish their goals and objectives. With this aspect, board of direct frame several
rules and regulations to perform several activities in the business. It assists to gather relevant
information which need to place in business. After this, president and general manager divide work
among several employees to accomplish their goals and objectives. In this way, administrative
management, finance management, engineer management, marketing and H&R management
demonstrate their work among their subordinates to develop effective functioning.
TASK 2
P 4 PESTLE analysis
Tesco is the multinational food retailing organisation. It has many stores in all over the
world because it is the second largest retailer business (Ji-fan Re, Fosso Wamba and Childe, 2017).
Their main motive is to earn profits so that they are continuing establish new branches in many
other areas in the world. They are selling food and non food items as well. Therefore, they have
largest customer base which create effective results in the organisation. Beside this, Tesco now also
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Illustration 1: Organisational chart

deals in providing finance, mobile, insurance, hardware services, etc. (De Villa, Rajwani and
Lawton, 2015). In order to get better understanding, towards the chosen business, following
PESTLE analysis can be implemented at workplace:
Political factors: In order to operate functions and operations in the world wide, global
political greatly influence to the performances of the TESCO. There are many elements which
create impact on the performances of the company such as tax rate, legislation, stability of
government, etc. (Rossi, Vrontis and Thrassou, 2014). Due to ongoing of the financial stability,
many government sector businesses always encourage to retail sector business to operate their
functions and operations in the country. This is because, it also create opportunities towards the
local people. Therefore, it can be stated that political factors has positive impact on the business
performances to create employment opportunities. However, when tax rate is high, it creates
negative impact on the Tesco performances because they have to pay more taxes and reduce profits
as well (Ji-fan Re, Fosso Wamba and Childe, 2017).
Economic factors: Economic factors are main point of the concern towards the chosen
organisation. This is because, they are most likely leverage costs, demand, profits and price as well.
As results, the organisation need to aware towards the policies which change and create impact on
the business performances. Sometimes these policies are favour and sometimes it is not in favour
towards the organisation. Therefore, it impact to access the finance part in Tesco. Beside this, it is
also important to show that business is growing in global market or not. In addition to this,
internationalisation and globalisation is the most two important key strategies which pursued by the
firm to make successful results. Because of the declining in the disposable income, the chosen
enterprise shifted to focus on the advertisement that create value brand of the products (Dima,
Grabara and Modrak, 2014).
Social factors: Because of the changes in variety of social changes, trends, customer moved
towards the other business. In addition to this, they are also preferred to purchase bulk amount of
the products. As results, Tesco implement sales in their food items so that they are able to attract so
many customers towards the organisation (Ji-fan Re, Fosso Wamba and Childe, 2017). It creates
positive impact on the performances and objectives of the organisation. Different types of goods
and services in the company demanded by the consumers are mostly influence by the belief and
attitude towards the business. It influence to social condition of the market which create positive
impact on the business outcomes and results. Due to increasing of customer awareness, the
company also change their quality and effective results at workplace (De Villa, Rajwani and
Lawton, 2015). Tesco adopt this changes through determines demand of organic products.
Technological factors: The advancement of technology also creates several opportunities
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for the Tesco. There are two elements which could be develop effective results for ascertain more
profits and revenue (Rossi, Vrontis and Thrassou, 2014). In this way, first include development of
online shopping with facilitating at customer home. Beside this, secondly services provide
convenience and ease for the customers. It assists to reduce labour cost so that it creates positive
impact on the performances of the business. In addition to this, the chosen organisation also
invested significant amount on the energy efficiency projects for long term objectives. As results, it
is also reduce carbon footprint within the business unit (Kozubíková, Belás and Virglerová, 2015).
Legal factors: Government policies and legislations also directly influence to the
performances of the chosen organisation. In this aspect, food retailing commission 2004 suggest
code of the practice which introduce to ban many current practices such as changes in price without
notice demand payment from suppliers. To facilitate these policies, Tesco provide customer price
reduction on the fuel which company used (PESTLE analysis for Tesco discusses its business
environment, 2017).
Environmental factors: Due to increase pressure on the company to address the
environmental issues. In this way, several benefits can be created to operate effective results at
workplace. It would be benefit to the society. Tesco continuously trying to reduce their carbon print
from the environment so that it impact positively to the business to operate their functions and
operations in effective manner (De Villa, Rajwani and Lawton, 2015). Tesco also minimize waste
produces in their industry with increasing social conscience in the customers.
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Figure 1 PESTLE analysis
Source: (ZHANG, J., 2017)
P5 Internal and external analysis of the chosen organisation
In order to assess internal and external analysis of the chosen organisation, following
elements are implemented at workplace of Tesco:
Porter five force analyses: In order to assess the external environment analysis, following
elements implemented at workplace of the chosen organisation:
 Threat of net entrance (Moderate): This force indicates primary dominated by the few
competitors which impact to the existing firm performances. There are several businesses
can be exist in the market who can provide same products and services as the Tesco. For
example, Somerfield, Waitrose, etc. Therefore. The chosen organisation has impact negative
to attract their customers (Mahmood and Hanafi, 2013). Grocery market is transformed into
the supermarket dominated business. As results, it creates operating efficiency with major
marketing mix in the business unit.
 Bargaining power of suppliers (High): This force represent that supplier can be influence
by the major grocery chains so that they have fear to losing their business of supermarket
(Carrió-Pastor and Calderón, 2015). According to changes in the products raw material
prices, it creates impact to the Tesco as they have also change their prices for particular
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products and services. It reduce profit margin of the company which negatively impact on
the performances.
 Bargaining power of customers (High): Porter five forces model include more products
that become standardisation or undifferentiated (Kozubíková, Belás and Virglerová, 2015).
Tesco mainly famous for loyalty card which make successful results in the business. There
are so many customer who made their cards to continue enhance their profitability and
outcomes in significant manner. Consumer also aware about issues which take place all over
the environment and create negative impact on the business performances. As results, the
chosen business needs to implement their outcomes in significant manner to enhance their
outcomes (Dima, Grabara and Modrak, 2014).
 Threat of substitute (Less): In UK, there are so many other businesses that provide same
utility products at low cost. Therefore, it impact negative on the performances and
objectives of the organisation (Rossi, Vrontis and Thrassou, 2014). However, this
organisation not considered effective quality in products raw material so that it is important
to determine effective quality to enhance their utility in market. Tesco implement effective
results in those products to increase their quality and outcomes. As result, this force creates
less impact on the performances and outcomes of the enterprise (Brixiova, 2013).
 Competitive rivalry (Moderate): Due to increasing growth in the grocery retailer products.
There are so many businesses are existing in the market that creates impact on the business
performances. For example, Asda, Sainsbury, and so many other businesses that creates
impact on the performances of the organisation. However, loyalty of customer towards the
Tesco is very strong so that it creates positive impact on the business performances
(Wheelen and Hunger, 2017).
Beside this, in the internal environment analysis, following elements are included in the
business operations of Tesco that impact on their operations and functions:
SWOT analysis: SWOT analysis includes strength, weaknesses, opportunities and threats. It
includes following elements within the selected business unit to enhance opportunities in internal
business of Tesco.
Strengths Weaknesses
 Tesco perform their functions and
operations as leader because they have
leadership position in UK.
 Online operations of the selected
business are very effective (Schaltegger
 Financial performances of the chosen
organisation are very weak (Ji-fan Re,
Fosso Wamba and Childe, 2017).
 Brand image of Tesco is damaged due to
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and Wagner, 2017).
 Club card is the effective tool to enhance
customer base and their loyalty program
as well.
income scandal in 2015.
 Employee morality reducing
continuously.
Opportunities Threats
 International marketing expansion is the
best opportunity towards the chosen
business (Isik, Jones and Sidorova,
2013).
 In the industry, financial services are the
effective elements to develop functions
and operations.
 Increasing in non food retail range is
the best opportunity to the selected
business unit.
 Inability to implement new leadership in
the business.
 Tesco has no ability to sustain cost
leadership competitive advantages.
 High currency fluctuation creates impact
on the business outcomes and goals
(Khanagha, Volberda and Oshri, 2014).
P6 SWOT or TOWS to identify strength and weaknesses of the chosen business.
In the selected enterprise, following SWOT analysis included which create impact on its
performances and outcomes of Tesco:
Strength:
 Tesco is the largest grocery retailer in UK market which create high profits and revenue in
business unit. They have 27.9% grocery market share in all over the UK market (Upward
and Jones, 2016). Closest competitor of the selected business is Sainsbury which has 16.6%
market share in the UK market. Due to the largest grocery market share, the company
generates effective results.
 The selected business also using effective online channel of sales which create effective
development of efficiency. Tesco is the first retailer in UK who implement successful online
sales channel and currently enhance revenue through online sales (De Villa, Rajwani and
Lawton, 2015).
 In addition to this, the company has strong property portfolio which enhance overall value
of the company. In all over the world, there are more than 7500 stores in all over the world
which create positive impact on the business outcomes. Almost 53% retail space of Tesco
has that create effective functions.
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Weaknesses:
 In 2015, Tesco face high loss and it create negative impact on the business performances and
outcomes of the business unit (Weiss, 2014). Total leverage debt of the company is now
reached GBP billion. Therefore, volume of profit also enhances that impact positively on the
business unit.
 At chosen workplace, there is high accounting miss-declaration including overstatement of
commercial income by supplier mistreatment. Retailer also creates impact on the brand
image which leading to the coverage scandal caused massive blow (Vahlne and Johanson,
2013).
 In addition to this, Tesco has lack of experience in some markets. Therefore, the company
has to invest lot of cash amount in business unit. Therefore, it impact negatively on the
business operations in business unit.
Opportunities:
 Tesco grown as the large market so that it is the best opportunity to them to enhance their
market share in significant manner (Linnenluecke, Griffiths and Mumby, 2015). In this
aspect, online sales in the best strategy which can be implemented at workplace to deliver
goals and objectives.
 Customer has the greatest opportunity to develop expansion in large market share in
significant manner. In this way, implementing advance features in products and services in
the best strategy to develop their operations and functions at workplace (Zhu, 2014).
 In addition to this, the company has opportunity to enhance their market share in Australia
market because there is high demand of retail and grocery products. It creates positive
impact on the business operations to deals with large market base.
Threats:
 Tesco has many threats because it deals in the large market share and big brand of UK.
Current position of the UK grocery is consisting competitive which create negative impact
on the firm (Stacey, 2016).
 Due to high competition with Asda, Sainsbury, Wal mart, there is threat to the Tesco which
reduce their efficiency.
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Figure 2 SWOT analysis
Source: (Haughey, D., 2017)
CONCLUSION
From the above report, it can be sum up that Tesco is the largest retail sector business of UK
which deals in many different types of food and non food items. In this context, report concluded
about their mission, vision, objectives, and many other activities which impact on the performances
of the company. Furthermore, report articulated about the internal and external environment
analysis which shows strength, weaknesses, opportunities and threats within the business unit.
Moreover, report discussed about PESTLE analysis through it can be identified that in international
market, there is high opportunities to the company to enhance their market share and objectives in
significant manner. In addition to this, it also includes market share of the company which can be
determines in significant aspect of the business results.
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