Business Models and Public Enterprises

This assignment delves into the various business models adopted by public sector enterprises. It encourages students to critically evaluate these models, considering their influence on regional development and overall economic growth. The analysis should draw upon academic literature and real-world examples to provide a comprehensive understanding of the subject.

Business environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1.Explain the different types of organisation and their purposes..............................................1
P2.Explain the size and scope of range of different type of organisation...................................1
P3.Relationship between organisational functions and objectives.............................................1
TASK 2............................................................................................................................................4
P4. Macro environmental factors that have their impact on the business operations.................4
P5 Internal and external analysis of strength and weaknesses ...................................................6
P6 Explain how strengths and weaknesses interrelate with external macro factors...................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................11

INTRODUCTION
All internal and external factors that can influence decision making process of an
organisation come under the business environment. These elements play a crucial role in the
success and failure of an enterprise. Tesco is the leader in retail industry of UK and they are
doing their business across the globe. Their main market is Europe and Asia but they are also
expanding in other continents. This report will decision about various types of organisations and
their purposes. It will study about the functions of chosen company and its relationship with their
objectives. Internal and external analysis of firm will also become the part of this assignment. At
the end, this file will also state about the impact of external macro factors on strengths and
weaknesses of the firm.
TASK 1
P1.Explain the different types of organisation and their purposes
Covered in PPT.
P2.Explain the size and scope of range of different type of organisation
Covered in PPT.
P3.Relationship between organisational functions and objectives.
The company Tesco is established in various countries which is main problem that their
structure is complex in nature. This problem is existed for long duration of time so they worked
to making policies and procedures at store levels. They make short term, medium term, and long
term goal in order to accomplish vision and mission of organisation. This cited company
dividing in two parts that is to provide food and non food items like clothing, electronics,etc.
This company is powerful for deliver the food items but they are not so good in other sector of
department so they set some sort of short term and medium term goals and objectives to
improvement and development of this sector (Arasti and et.al., 2014). Their aim is that
before2020, they targeted approx 6.5% market share so this will help to achieve a goodwill in
the organisation. The human resource department of this cited company has to be appoint more
persons in workplace because more sales persons are needed to this company before end of
current year. The accounting department helps to HR department so they pay the payroll
emoluments on fixed time. This department also helps to provide extra funds to research and
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development department so this will helps to innovate the new technologies and software in
order to achieve the profit of organisation. The company want to increase their business to
allocate number of activities so they will recruit more persons at managerial hierarchy. They also
established the training and development programmes to their workers so leadership skills can be
enhanced (Boons and Lüdeke-Freund, 2013). This helps to cited organisation get knowledgeable
leader which can give great resource to the business in order to accomplish goals and objectives.
The main long term of objective of Tesco company is that to maintain the balance of worker
personnel and working life so worker can do their project effectively.
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Table1. The department of retail industry are mainly operated at store level. In tesco company
one regional manger are responsible for a ll the department that are present in regions. Top level
of management are made various strategies and procedures that the store manager is accountable
for execution. There are three types of managers working with him (Cantwell, Dunning and
Lundan, 2010). Firstly the food trading manager, secondly the non food trading manger, and
lastly is personnel manager. This company gain more profits from this food businesses. But in
early time this food segment was not providing better goods and services for the customer
satisfaction which result the company goodwill declines. So this was the time when company
take decision to expand their business in non food segments. Various kind of workers have
knowledge relate to this non food segment .
Today, various persons are getting more sincere about their health issues, so mainly this
reason the company can give their efforts to organic products or goods. The main goal of this
company is that they improve the sale of this organic products in next five years. They also
invested more resources in term of money in non food segment. The cited company food division
segment has worked according to satisfaction level of customers so this will help to earn more
profits in near future.
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This cited company entered in non food business which mainly contain the clothing,
electronic goods. So the company managers know that they can not much depend on food
segment because sometime this section gives the less return to company (Carroll and Shabana,
2010). This is the main reason of company to enter in non food segment and put more resources
in this areas so they get huge benefit in near future. Personal department play a very crucial role
in order to get profits.
TASK 2
P4. Macro environmental factors that have their impact on the business operations
Most of the organisations understand importance of external factors as they have power
to influence business operations of company. In case of positive environment, a firm who is not
operating their enterprise effectively can earn huge profit because they will get benefit of
favourable surrounding. But if outside environment is unfavourable, than a company who is
earning high revenue can face various kind of problems which can reduce their valuation.
PESTLE analysis of Tesco is as follows:
Political factor – Brexit makes a huge impact on the business of cited enterprise. If
relation between two governments is not healthy then the firms operating in these nations face
various problems. This firm did not need permission for expansion in European country before
Brexit, but now they have to follow many legal procedure and it will be very hard for them to get
approval for setting a manufacturing plant or opening a store in this region. This political change
will make a negative impact on their revenue in upcoming time. Tesco is a transnational
company, they are operating in more than 12 countries. Following rules and regulations of
different nations is very difficult and experience process. They have to change their accounting
method so they can fit in tax system of a country. Government in developing region are ready to
give some special deduction to the organisation like Tesco because they understand that these
enterprises has capacity to provide employment to a large number of people. Investing in these
states will be beneficial for cited firm in long run (Haidar, 2012).
Economic factor – Most of the enterprises want to expand their business in developing
economies as they know that if economic growth of nation is high then it will be easy for them to
earn higher revenue within short period of time. Tesco is highly depended on the European
market. Nations in this region are facing various types of economic challenges which is the main
reason that they do not have decent growth rate. This factor creates a negative impact on the
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business of Tesco. If they want to keep and increase their existing organisational growth then
they can adopt two effective strategies where the first is internationalisation and another is
diversification. If this firm invests in the growing economies like Asia, Africa, Australia, etc.
than they may earn huge amount of revenue in forthcoming time. Markets in some countries like
India, China and Brazil are unorganized and so, they can exploit favourable economic condition
of these nations.
Social factor – Tastes and preferences of public changes in regular intervals of time.
Cited organisation understood this idea and they make a policy for bulk shopping (Christopher
and Holweg, 2011). They are launching different variety of organic products as people are
getting health conscious in this era. This move played crucial role in enhancement of their brand
value. Couple of years ago, employees of this company went on strike as they were not satisfied
with the facilities they were getting in retail store as well as they also had some salary related
issues. This incident made a negative influence on firm's global image.
Technological factor – Tesco is investing a huge amount in technology because they
firmly believe that this factor will provide them some competitive edge over their competitors.
Now, their customers can buy all the available products online. They are also making self-service
checkout points. This concept is getting very popular in the public. These steps make a positive
impact on their business as their overall sale got enhanced by 1.2 times within short period of
time. But some industry veterans believe that Tesco will face negative impact of these major
technological changes as it will increase the cost of operation. Technology changes rapidly, the
money that they are investing in new software and system can become outdated in couple of
years (Chen, Chiang and Storey, 2012).
Legal factor – Government is going to change legal rules and regulations regarding the
financial assistance which they were providing to farmers. It will be very difficult for peasants to
maintain same quality without appropriate need of money. This move will make a negative
impact on the business of cited organisation because now it will they have to invest more
resources in maintaining high quality. Some developing economies like India, China, etc. are
trying to remove various types of legal complication so companies like Tesco can operate in
these nation. They will be beneficial for them in upcoming time.
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Environmental factor - Their was a time when most of the organisations were focusing on
selling quality goods and products, but now a days companies want to make better item without
doing any harm to society. Cited firm is planning to reduce their carbon footprint by 50% before
2020. They will cut down energy consumption and they are also making strategies to reduce
consumption of greenhouse gases. This move played crucial role in increasing their goodwill in
market. Tesco is harming environment by polluting atmosphere, incidents relating to these cases
are not good for their brand image (Haidar, 2012).
P5 Internal and external analysis of strength and weaknesses
Cited company is one of the leading firm in retail market of UK. It is does not matter how
an organisation is performing in market because they always want focus on increasing their sale
and reducing their cost of operation. Internal and external analyse will help cited enterprise in
determining their strength and weakness which will assist them in formation of effective policies
so they can achieve their objectives in set period of time.
Strengths:
 Tesco is holding maximum market share i.e. around 28%. Table leader in an industry
always get extra attention from media, they do not need to spend huge amount of money
on various types of promotion and advertisements. This provide them proper support
when they try to execute policies relating to cost reduction.
 Around 4,80,000 people are working in cited company. Human resources is considered as
one of the most important assets than an enterprise can have in their organisation.
Workers are recruited from different countries and states. This diversity provide help
Tesco in understanding business environment of different nations. This assistance help
them in choosing right economy to invest. Government also give some important to the
enterprise who is operating at such a large level (Harrison, 2011).
 Cited organisation is doing changes in technology rapidly so they can cope up with the
new technological challenges. Customers can buy their products online, they understand
that in upcoming time they do not need to invest huge amount retail store because most of
the customers are now giving orders online.
 Government in developing economies are providing special assistance to companies like
Tesco because they know that these firms has capacity to generate lot of employment.
They can invest huge amount in infrastructural development which is the basic need of
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most of the nations. They are ready to give extra deduction to these enterprises. Asian
and African region will play crucial role in success and failure of an organisation in
upcoming time. Cited firm is expanding their business in these nations, they will earn
high revenue in forthcoming time (Cavalcante, Kesting and Ulhøi, 2011).
Weaknesses :
 Tesco is dependent on their UK business. They are strong in Britain but they do not
have sound presence in other European countries. In developing economies like
China and India, people hardly know about their brand. They are in very weak
position in these countries.
 Cited company has to face negative impact of Brexit, it will reduce demand in
domestic economic which is the main source of revenue for Tesco. This external
factor will provide some extra edge to their competitors because in upcoming time
cited organisation has to take various kind of approvals from European countries.
This will increase their cost of operation which will make a negative impact on
their profit in upcoming time.
 Cited enterprise is operating in more than 12 countries. It is very difficult for them
to cope up with different kind of regulations and tax system. This point can be
considered as the main reason that their organisational structure is very complex.
They are failing to execute their set plans because of entangled business model.
Opportunities:
 Retail stores can be divided into two parts, first is food segment and other is non-food
segment. Their food sector is performing well but now they need to focus on other
departments like clothing, household products etc (Lee, Olson and Trimi, 2012). These
section have huge potential because they have not reached their optimum level.
 Most of the experts of this industry believe that Asian and African continents will play
crucial role in success and failure of business operations. Market in this region is
unorganized, cited enterprise can do early investment so they can exploit the favourable
condition of these economies.
Threats:
 UK can be considered as the main market of Tesco. They earn majority of
revenue from this country. After Brexit, companies cited organisation has a
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fear of uncertainty because they do not have any idea about market response.
They are failing to make effective policy and strategies because government
policies are changing in short period of time (Moutinho, 2011).
 Competitors of this company are getting more and more stronger because they
are earning high revenue from their domestic countries and they are also
expanding their business in developing economies effectively.
Internal and external factors play crucial role in decision making process. Earlier Tesco
was planning to invest more money in UK but after Brexit they change their decision and now
they are planning to expand their business in Asian countries because they are ready to give them
special deduction in tax. Cited company is aware of threats relating to rapid change in
technology. They are introducing new technology because other player in industry are also
adopting these alterations. External environment is forcing them to improve spend extra money
on some soft-wares which his not necessary for their organisations.
P6 Explain how strengths and weaknesses interrelate with external macro factors
External factors has potential to influence decision making process of an organisation.
Sometime they provide strength to the company other time they make a negative impact on their
business operation (Palo and Tähtinen, 2011). Government in Asian regions are inviting multi
national companies like Tesco, they are providing them some special assistance so they can
invest huge amount in these nations. They are ready to ease regulations relating to entry of
foreign enterprises. They are making special provisions so cited firm can get extra deduction in
taxes. They are ready to provide land and other facilities at subsidiaries rates. These amenities
will play crucial in expansion of this organisation because they do not need to invest much
resources in this region but they will generate huge amount of profit in upcoming time. This will
provide strength to their market position.
Incidents like Brexit made a negative impact on business of an organisation. This fear of
uncertain is creating problem in making key business decision. They are failing to make an
effective policy can be considered as the main reason that they debt is increasing and their
revenue is going down. Tesco took an important decision that they will not reduce their carbon
footprint, they are also working in order to reduce omission of ozone layer (Pikka, Iskanius and
Page, 2011). These judgement improves their goodwill in industry and in public.
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Strength of Tesco – This company has a unique brand name and they are number one
player in the retail market of UK. They have deep pockets and almost 480000 people were in this
organisation. They are known for rapidly adopting new technology, opening of online stores is
the perfect example of this point. Their are many countries in Asian and African region who are
making attractive scheme for attracting retail giants like Tesco. They are also providing them
special deductions in tax scheme. These nation need infrastructural development and Tesco can
help them in this work. Their are many companies who are failing to use new technology in their
business but this firm is getting some extra edge due to their fast adoption of latest technology.
Weaknesses of Tesco – This firm is mainly depend on their domestic market. The
economy of UK is in bad shape and this making various kind of negative impact on their
business. They are facing huge burden of debt which is revealing their poor financial
performance. They are failing to attaining their environmental goals and its is hampering their
goodwill. Regular strikes from the side of employees has shaken the image of mentioned
company in the society.
CONCLUSION
From the above report it can be concluded that external factors have power to influence
decision taken by an enterprise. Various types of organisations are present in business
environment. Their size and scope has either direct or indirect relation with their purpose and
objectives. Internal and external analyse help a company in determining their actual position.
These examination assist a firm in formation of their current and future strategies so they can
execute effective policy in given time period.
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REFERENCES
Books and Journals
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Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
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Cantwell, J., Dunning, J.H. and Lundan, S.M., 2010. An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional environment.
Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management reviews. 12(1).
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Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision, 49.(8). pp.1327-1342.
Chen, H., Chiang, R.H. and Storey, V.C., 2012. Business intelligence and analytics: From big
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Christopher, M. and Holweg, M., 2011. “Supply Chain 2.0”: managing supply chains in the era
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Haidar, J.I., 2012. The impact of business regulatory reforms on economic growth. Journal of the
Japanese and international economies, 26.(3).pp.285-307.
Harrison, R., 2011. Learning and development. Development and Learning in Organizations: An
International Journal. 26(1).
Kian Chong, W., Shafaghi, M. and Leing Tan, B., 2011. Development of a business-to-business
critical success factors (B2B CSFs) framework for Chinese SMEs. Marketing Intelligence &
Planning, 29.(5).pp.517-533.
Klapper, L.F. and Parker, S.C., 2011. Gender and the business environment for new firm
creation. The World Bank Research Observer, 26.(2). pp.237-257.
Lee, S.M., Olson, D.L. and Trimi, S., 2012. Co-innovation: convergenomics, collaboration, and
co-creation for organizational values. Management Decision, 50.(5).pp.817-831.
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Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Palo, T. and Tähtinen, J., 2011. A network perspective on business models for emerging
technology-based services. Journal of Business & Industrial Marketing, 26.(5). pp.377-388.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development. International Journal of Innovation and Regional Development, 3.(3-4). pp.324-
344.
Pingali, P.L. and Roger, P.A. Eds., 2012. Impact of pesticides on farmer health and the rice
environment (Vol. 7). Springer Science & Business Media.
Reed, O.L and et. Al ., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
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Online
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