Business Environment Assignment PDF - Tesco

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BUSINESSENVIRONMENT1
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INTRODUCTIONBusiness environment is a marketing term used for analysing internal as well as externalfactors that influence a business (Andersson, Forsgren, and Holm, 2015). A businessenvironment is defined as the sum of all external and internal factors that affects the functioningand decision making of a business. When a successful business has to be sustained then there is aneed of effective utilisation of resources. Business environment is defined as the sum of total ofdifferent internal and external factors that affects the business of an organisation. A businessenvironment is an essential aspect of any business and it helps the managers and leaders toestimate the success of company in new markets. There are different forces which constitute thebusiness environment such as media, government, economic conditions, investigators etc. Thedifferent forms of business organisation depends upon nature of business and size of operations.There are different kind of organisations including public sector organisation, private sectororganisation and voluntary organisation. All these organisations have different scope, size andmission and vision. All these kinds of organisations uses different type of organisationalstructure like matrix, lean and hierarchical organisational structure. A business environment willpresent opportunities as well as threats of a business. The business environment should be easilyunderstood. The company which is considered in this report is Tesco. This is a multinationalcompany that deals in groceries and it is a merchandise retailer. The headquarters of Tesco arelocated in England, UK. Tesco is a multinational retail company that is their largest retailindustry of the world. Tesco was founded by Jack Cohen in the year 1924. Tesco has asuccessful expansion at global level since the day it started business. This company is listed onthe London stock exchange it has a market capitalization of around£18.1billion.This reportconsists of explanation of different types and purposes of organisations. It also describes the sizeand scope of different types of organisations. In this report, relationship between differentorganisational functions and organisational structure has been discussed. This report includes thepositive and negative impacts of macro environment on the business environment. In addition tothis, the report consists of internal and external analysis of the organisation for determining itsstrengths and weaknesses.3
TASK 1P1 Explain the different types and purposes of organisationsThere are different types of organisation that are present in business environment. Theseinclude private, public and voluntary. There are some goals and objectives of each and everyorganisation which helps it to work effectively and perform all functions of the company. Thedifferent kind of organisations are described below-Private limitedThis is a kind of organisation that is a small enterprise which has someliabilities for shareholders of the organisation (Bah, and Fang, 2015). The private limitedcompanies are restricted for selling shares to public. Tesco is a private sector company that dealsin retail sector in UK.Sole traders– These are people who are responsible for managing different activities ofbusiness by their own and having separate identity from their organisation in legal term.The owner of organisation is liable for losses, debt as well as for profit generated.Partnership– This is known as the best way for introduction to private organisation ifthere are less funds present. The partnership companies are basically of two people orpartners who invest money in starting same business. The amount invested by both ofthem in business is known as capital and every partner is responsible for profit and lossesaccording to contribution made by themPLC (public limited company)PLCis the company which is ruled by government ofany country. The main objective of these companies is to provide quality products to customersfor increasing economy of the country (Belás, and et. al., 2015). Some example of these arehealth care companies, fertilizer companies, oil and gas companies, etc. The main objective ofthese companies is to enhance the profitability of whole economy of the country.Central government department– Organisations of particular state run by the centralgovernment bodies.Local authorities– In particular nation, local authorities are those who control andmanage working of specific city organisations.Voluntary Sector:These are those organisations which are known as non profitcompanies and these do not get any profit for doing business. The main objective of thesecompanies is to do work for welfare of society (Botha, Kourie, and Snyman, 2014). For example4
Wellcome Trust is the voluntary sector organisation of UK that was founded in year 1936 by SirHenry Wellcome which has main objective of Biomedical Research.Trust-There are few trustees who provide funds to voluntary sector organisation day today operations.Unincorporated association-they are the management committees of an organisation ormay be also named as council. Although, unincorporated association don't have theiridentity distinct from trustees.Others- Royal charter bodies, community and several others.P2 Explain size and scope of a range of different types of organisationsThere are different organisation present in business environment and all of them havedifferent scope, size, offerings, vision, mission, stakeholders and structure. The scope and size ofdifferent organisations is described below-Private limitedThoseOrganisation which have an objective for earning money and profit by providingproducts and services to customers according to their needs and requirements are known asprivate limited companies. Tesco is a private firm which is dealing in retail sector. The privatelimited company is a kind of business enterprise which is owned privately and this ownership isused in many jurisdictions. There are basically following advantages of private limitedcompanies -Limited liability -The main advantage of owing a private limited company is that thefinancial liability of shareholders is limited to the shares. Thus if the company is in financialtrouble, then stakeholders will nor get affected.Restricted trade of shares– There are restrictions placed on the sale of transfer of sharesis considered as a limitation or advantage depending upon outlook of the entrepreneur. Someshareholders want to sell the shares but cannot share them outside so this becomes an advantage.On the other hand, in case where shareholders agree to the sale or transfer of share, the risk of5
hostile is low. This restriction on the sales of share is a disadvantage as shareholders have limitedoption for liquidation of shares.Continued Existence– This is an advantage of private limited company for continuingexistence after the owner dies or leaves business. When a business is incorporates, it becomes anindependent legal entity which is able to sue assets which are separated from the owner ofcompany. A private limited company is different from sole proprietorship as it is owned bysingle person.Background:Tesco is a British retail sector industry that is one of the largest foodretailer around the world which was established by jack Cohen in the year 1919.Vision and Mission:To be an organisation which is wanted and needed around theworld.Objectives:Objectives is to contribute in sustainable development of society by theirbusiness model.Products :This company is dealing with groceries and food chain, clothing and bank.Size:Tesco has around 6,569 stores at worldwide level and having revenueapproximately £57,491 million per annum.Structure:Lean organisational structure is adopted by Tesco for attracting more numberof Tesco. A lean organisational structure is designed for creating more customer valueby utilising the available resources. The main objective of all members of a leanorganisational structure is to find different ways for improving processes of theorganisational and for making the companies efficient and productive.PLC (public limited company)A public limited company is one which is a type of public company under the UnitedKingdom law, common jurisdictions and the Republic of Ireland. A public limited company islegal designation of a limited liability company (LLC). These kind of organisations are offered tothe general public and it has limited liability. These companies are generally used in UK andsome commonwealth countries which follow norms of UK. The main advantage of publiclimited company is the ability of increasing capital by issue of public shares. The selling ofshare to public means that anyone can invest in the organisation. Companies which are listed onLondon Stock Exchange(LSE) are known as public limited companies. The example of publiclimited company is BBC i.e. British Broadcasting corporation.6
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