Tesco's Business Environment Analysis

This assignment delves into an analysis of Tesco's business environment. It examines both internal factors (Strengths, Weaknesses, Opportunities, and Threats - SWOT) and external macro-environmental influences (Political, Economic, Social, Technological, Legal, and Environmental - PESTLE). The report explores how these factors impact Tesco's operations, highlighting the importance of management's role in navigating these influences for successful business outcomes.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 & P2 Covered in PPT........................................................................................................1
TASK 2............................................................................................................................................7
P3 Relationship between various functions of Tesco............................................................7
TASK 3............................................................................................................................................8
P4 Negative and positive affects of macro environment........................................................8
TASK 4..........................................................................................................................................11
P5 External and internal environment of Tesco and its weaknesses and strengths..............11
P6 Weaknesses and Strengths of Tesco interrelate with its external macro components....13
CONCLUSION..............................................................................................................................14

INTRODUCTION
In business environment mostly there are two main elements are included internal and external .
An internal factors consist of customers, government, employees, shareholders, government, etc.
On the other hand, external factors include political, economic, social, legal, environmental, etc.
The internal factors are easily controllable by company but it is not so in case of external factors.
In the present report, Tesco has been chosen that is the biggest retail business firm in United
Kingdom. In this report, various types of organisations and their objectives as well as legal
structures are explained. The size and the scope of these all types of business firms are also
stated here (Bovee, 2010). Along with that, relationship between organisational functions like
production, Human Resource, marketing, Information Technology (IT) etc. and their link with
firm’s objectives and structure discussed in this report. Further, internal and external analysis is
conducted to assess the positive and negative impacts of macro environment on Tesco.
TASK 1
P1 & P2 Covered in PPT

P3 Relationship between various functions of Tesco
The Tesco is a large scale retail business firm that provides better quality products to its
customers. The main purpose of this business firm is to expand its business in to new markets
and also in to new fields. In this organisation, there are many departments and all are working for
accomplishing the common aims and mission of business organisation. Work of every
department is different from each other (Bryman and Bell, 2015). Every department work with
coordination and help to each other and all the departments are communicated with each other in
a well behaved manner. In this organisation, there are production, human resource, marketing,
sales, finance, research and development, Information Technology (IT) Department etc. all are
working very effectively and efficiently. The activities of every sector are different but all are
working together and from this they do not face any kind of problems and issues. They are
working for increasing the productivity and development of Tesco company. There are some
some departments which are working for growth and development of Tesco organisation:
Human Resource- It is the backbone of every business organisation. The main objective
of this department supply the manpower on vacant positions and also provide training to existing
employees as well as the current employees to increasing their skills, knowledge and abilities.
The Human Resource Mange recruit employees on the demand of job or positions. It is the duty
and responsibility of a HR manager is to provide benefits, motivate employees, performance
appraisal, compensation etc. It maintains all records reacted to employees and work for achieving
the goals and objectives of Tesco organisation.
Marketing department- The main role of this marketing department is to promoting the
products and services with the help of effective promotion. It renders the research for developing
the target customers. This department works on increasing the efficiency of business. In this
business firm, this sector uses many new strategies or some campaigns and with the help of
these, it promote its products and services and also aware people about its goods (Buckley and
Casson, 2010). The marketing sector works on maximising the productivity of company and also
work with coordination of every department. The main responsibilities of Marketing manager is
product development, to developing design and packaging of products attractive, conduct market
research to know about the marketing strategies, making effective strategies and policies.
Research and development- The main work of this department is to analyse the market
strategies, to know about the other competitors and their marketing policies, to know about the

existing products and services at the market place. The researcher also conducts the research on
internal environment as well as the external environment. With the help of Research company
can make make changes in its products by identifying the tastes, preferences and demands of
customers.
Finance Department- It is that part of company which mange the finance for operations.
The main functions of this department is to planning, organising, accounting, auditing and also
works on controlling the funds for company (Craig and Campbell, 2012). This function has to
work on controlling and managing the affairs which can impact on the financial position of
company. The Tesco business organisation provides various products through stores and through
online, so manufacturing the products, the finance department arrange and then provide funds to
producing the goods. For effective business operations, this finance sector manage funds
facilities.
Production Department- The main function of this department is to producing or
manufacturing the good quality of products and services on the basis of customers demand. The
Tesco business enterprise adopts or uses new and advanced technology and machineries for
improving the production process and increasing the efficiency of business. With the help of
technology, the cost of manufacturing will be reduced and process will be completed on time.
Production manager is responsible for converting raw materials in to finished goods.
Information Technology (IT)- The main focus of IT department is on improving the
operation and the process to maximising the growth of company and it is the main part of
company. This department handles all the important technical affairs (Elliot, 2011). In Tesco
organisation, there are many technological factors that can help in hiring the candidates with the
help of various mediums. This business firm conducts its personal interviews with the help of
online channels. From this, company can recruit the right person at the right position.
TASK 3
P4 Negative and positive affects of macro environment
An organisation's success is impacted by various factors and issues, it is very essential to
identify and analyse them with the help of smart techniques and methods. Mainly organisation
environment is divided into two parts internal and external. A successful company will not only
understand and identify current factors and causes but also forecast changes in working

environment. It includes two type of environmental elements which influencing on organisation
which can be negative and positive in nature which are stated under following:
 Macro environment
 Micro environment
For effectively analysing major factors which all are included in macro environment there
can be use PESTEL analysis method, which assists to determine major effects on working
environment of company (Gebauer, Paiola and Edvardsson, 2010). Basically it involves political,
environmental, social, technological, economical and legal.
Illustration 1: PESTEL analysis, 2017
(Source: PEST & PESTEL Analysis,
2017)
 Political: The first element of PESTEL method is political. Political factors refers
to, it can creates advantages and various opportunities for organisation. There are
consider legal rules and regulations which are decided and regulated by
government of country that should be followed by all members as well as
organisations. Some legislations such as minimum wage rates and anti
discrimination nature form company's internal working environment. Sometimes
most of the enterprises are develop bias and discrimination nature among all
employees as their religion, colour, background, education, age and so more. It
negatively impacts on them also their motivation and confidence level decrease.
For controlling all theses things and activities government of the nation enacted
some basic rules and laws that helps to maintain all working activities and

employees as well. This factor also includes tax rates, different marketing
policies, government regulations etc.
 Economical: This is the second largest factor of macro environment. All business
firms are affected by national and international economical issues (Halbert and
Ingulli, 2011). It includes fiscal police, inflation rate, interest, currency
fluctuation, share market and so more. All these elements are impacting on
company which can be negative and positive in nature that's why all these are
should be effectively consider.
 Social: Sometimes social factors and causes are impacting on company's working
environment. It includes family, culture, friends, colleagues, neighbours etc., all
these things are impacting on a person's attitudes, opinion and interest of a person
because an individual person is learn from their society as well as things level also
based on this, that's why it is very important to analyse and determine them.
 Technological: At this current time period technology is one of the fastest
growing in nature (Hamilton and Webster, 2015). That's why most of the
companies are using smart techniques and equipments in their working
environment for effectively completing decided task. Along with this, fastest
changes and innovation in technology department so it is not easy to understand
their features by employees sometimes it creates some difficulties for them.
 Legal: these are external factors and issues which related to how the law affects
way of businesses and customers behaves. Mainly it includes consumers law,
discrimination law, copyright, health and safety, employment law, fraudulent
activities and import/export law. All these laws are decided by the government of
nation which are have to followed by all organisation in appropriate manner by
which systematically develop healthy environment in company with the help of
them employees can complete their works with confidence and proper motivation.
 Environmental: environment factors is one of the most important which
influence on transport services. It is very important to determine climate changes
because environmental changes are directly impacting on working performance.
Along with this, climates changes also positively impacting on some companies
as well as it helps to enhance productivity and profit level.

TASK 4
P5 External and internal environment of Tesco and its weaknesses and strengths
The SWOT analysis helps in know about the internal and external strength, weaknesses,
opportunities and threats of Tesco business organisation (Iskanius, Page and Anbuudayasankar,
2010). In the internal environment of Tesco includes employees, enantiomers, suppliers,
government, shareholders etc. These all the factors are controllable by the company but some
times, these all factors can impact on the operation and also on the decision making process of
this company. Business firm can not control all the external elements and it includes political,
social, economic, environmental, legal and technological.
Strengths (Internal environment)
The Tesco is a large size business firm and in United Kingdom and this company
provides or render good quality products or services to its buyers. This business firm deals in
clothing, food products, telecom services, internet service provider etc. Tesco company uses a
wide range of area to conduct its business operations and also want to expand its business in to
new sectors or new market places.
 The main strengths and capability of this business firm is that the total market
share of Tesco is enhancing and and now it holds total 13 percent share in retail
market of United Kingdom country. Its brand name is very popular in UK and it
provides its goods online at reasonable price rate.
Illustration 2: SWOT analysis
(Source:What is SWOT Analysis, 2017)

 Employees of this company is very talented and expert in their field and they all
are contributed their skills, knowledge and abilities in making the business
process effective and also achieving the objectives of company (Kang, Lee, and
Kim, 2010). To increase the skills and capabilities of employees, the Human
Resource Manager is providing the training and development for improving and
increasing their knowledge and skills.
 The top management of Tesco company makes the effective policies and plans
and also with with their employees on common goal. This business organisation
adopts new technology to improving the production process and to reducing its
costs.
Weaknesses (Internal)
 The financial performance of this company is very weak. The bad debts of this
firm impacted on the profit of Tesco.
 The presence of this business organisation is less or absence in the other
countries.
 It does not take maximum part in the promotional activities and also does not
conduct the promotional campaigns to aware the people about the new products.
 The management of Tesco company does not use the effective tools and
techniques which help in making the business process effective and flexible (Kian
Chong, Shafaghi and Leing Tan, 2011).
 They do not upgrade their website and also not upgraded the procedural manuals.
 Sometimes, the management change the environment which is not according to
the employees and all workers are unable to adopt it.
 The main weakness is that in Tesco business organisation, there are many old
employees and they are not able to give his full efforts in the business process.
 This company does not provide time to time training to their employees.
Opportunities (External)
 This company has to focus on the developing the private level.
 It has to entry in the rising market place by getting of joint ventures and small
chain.
 It has to focus on increasing the sales of non- food.

 The senior employees can encourage the newly appointing and also motivating
them (Klapper, Lewin and Delgado, 2011).
 The adoption of technology can provide the strengths and it will be helps in
sharing the data and information among the different departments and other
business firms.
 It has the opportunity to expand its business firm in the new cities and new
countries.
 Tesco has the opportunity that it can share the job opportunities and the business
with the another business.
Threats (External)
 The main threat of this company is that the profitability or the market share is
threatened by the credit crunches and through the economic recessions.
 The costs of food are increases day by day, from which the consumers can not
purchase more (Klapper and Love, 2010).
 Because of the currency fluctuations the business development or operations of
this company is affected.
 There is a problem of rising the new ethics.
 The budget of this organisation is impacts.
 At this present time period, there is a need of skilled, capable and the knowledge
people.
P6 Weaknesses and Strengths of Tesco interrelate with its external macro components
Management of Tesco can not control macro factors. It can affect on process related to
decision making , strategies, policies and business organisation's performance. In macro factors
include political, technological changes, legal, economic, environmental and social (Machuki
and Aosa, 2011). So, there is a necessity to business firm to understand these all factors and to
save the business activities and operations from it. There is an external analysis of micro
environment that is PESTLE and the internal analysis that are SWOT (Strengths, weaknesses,
opportunities and the threats). Both external and internal factors are interrelated with the each
other and it is the responsibility of management or company to manage both factors other wise it
can generate some issues for business. The SWOT and the PESTLE both are related with each

other. The technology can be impacted on the business operations. If company will not adopt the
new and advanced technology, then company does not improve its business operations and also
does not manufacturing the good quality products and services. From using the new technology,
many new opportunities can be created. To improve the production process, it is necessary to
company is to remove the obsolete technology and adopt the new technology and machineries.
To work with the people of society, it will be the strength and through this many new
opportunities will be introduced in future. These all are the external factors that can impact on
the business operations.
The political factor can also be affected on the business operations but some times, it can
be beneficial for the company (Mahmood and Hanafi, 2013). The policies of company impacted
with changing in the political parties. The society impacts a lot on the business process to reduce
this impact, Tesco company has to work for the welfare of the society and also give some
contribution towards the society. This business organisation should conduct the programmes for
the benefit of society and also should be coordinated with the societal people.
CONCLUSION
It has been concluded from above mentioned business report that Tesco is a big retail
business firm and it manufacturing products on the basis of customers tastes and preferences.
There are different types of organisational sectors and the objective or purpose of every sector is
different from each other. In this report mentioned about the scope and the size of different types
of organisations. In Tesco company, there are many departments are working and both are
interrelated with each other and work for achieving the common goal. Sometimes, the operations
of company is affected by the internal and external environment. This business enterprise
conducts SWOT (Strengths Weaknesses Opportunities and Threats ) analysis to know about the
effectiveness or efficiency of internal and external environment. In this present report mentioned
about the negative and positive affects of the macro environment on the business process and
also on operations of company. The strengths and weaknesses both are related with external
macro factors such as political, social and technological.