Environmental Analysis for Business Strategy

This assignment delves into the critical relationship between environmental analysis, strategic decision-making, and organizational structure. Students are tasked with analyzing various factors using PESTLE and SWOT frameworks to understand their influence on business strategies. The assignment also explores different organizational structures and their impact on performance, drawing upon classic theories and contemporary examples.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P3 Departmental Functions for Tesco....................................................................................1
TASK 2............................................................................................................................................3
P4) PESTLE analysis of Tesco...............................................................................................3
P5 Internal and external analysis for Tesco............................................................................5
P6 Interrelationship with macro environment based on SWOT analysis...............................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

Illustration Index
Illustration 1: Organizational chart..................................................................................................2
Illustration 2: PESTLE analysis.......................................................................................................3
Illustration 3: SWOT analysis..........................................................................................................6

INTRODUCTION
Business environment is the important factor to achieve the objective in the company.
Business environment is the group of inner and outer component that influence the industry.
There are different types of organization and each have different growth in the market. This
report includes types of firms, analysis of SWOT and PESTLE to make a good business
environment and it also includes how the macro environment affect the company performance.
TASK 1
P1 and P2 attached with PPT
P3 Departmental Functions for Tesco
The functions of each department in the firm is the main factor to achieve the desired
objective. This all departments are necessary to work together in the organization. Company
manager gives the different task to the various departments. All these departments of the firm is
interrelated to the growth of the company. Company has different departments like HR,
production, finance, sales and marketing, administration and research and development.
1.) Finance functions: The function of this section is manage the records of the money
accepted and paid out by the firm. This data is used to produce the different financial
statements for the tax and follow with the legitimate requirements (Hill and Westbrook,
1997). If the financial functions is not well managed by the firm then it will be negative
impact for getting the desire goal.
2.) Human resource functions: The main responsibilities of this department is to manage
the recruitment and selection of the new employees in the firm and also provide the
tanning and development (Kolios and Read, 2013.). HR also need to comply with
legalisation applicable to the country that which they are belonged. For example in UK
employee will need to manage personal records in a manner i.e. compliant with the help
of data protection act that is implemented in 1984.
3.) Marketing and sales functions: Main responsibilities of marketing is that after
production of the product they need to package, promote and sale the product for the
customers. Tesco was applied various strategies for advertise the product in the market
and that will give more advantages to the firm. Sales are responsible for the influence the
consumer to buy end product that is manufactured through marketing research.
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4.) Administrative: This involves all the administrative work like computer services,
dealing, mail handling etc. They also provide the documents for the firm and manage and
maintain the machinery (Brașoveanu and Bălu, 2014). Without this department in the
firm the problems of the customer will not be resolved and the workforce may not have
the machinery, tools and techniques to produce the product. Tesco has efficient
administration in the firm to produce a good quality product.
5.) Research and development function: The main objective is that improve the existing
product with the innovative strategies, invent new product and make processes effective.
This firm always apply the innovative idea in the product for more profit. This is the main
reason for this entity to achieving the brand recognition in the world (Haufler, 2013).
Interrelationship between functions of organisations:
These all the functions discussed above are interrelated to each other. The finance
departments are very help full for all the departments. Finance function of the company is to
make available finance to all the departments of company so all of them can perform their
functions effectively. Then the human resources function of organisation is also performed for all
the departments of organisation. In this function the organisation organises interviews to recruit
the employees, they organise trainings and development program for them. Then the marketing
functions are connected to sales functions. Sales is increased when there is good marketing
strategies used in marketing functions. The administration in of all the organisation must be
effective. Research and development help in the development of plans and policies for future
which is also used by all the functions to make plans and policies related to their functions.
Organisational structure in relation to functions
Organisational structure is used in organisation for the directing the activities of
organisation towards achieving the goals of Tesco. The finance is made available for all the
organisation for making plans and policies. Human resource is employed in the organisation for
different functions of organisation on the basis of skills and development. Marketing sales and
administration takes place in organisation for achieving their objectives. The research and
development is used for the development of organisation. All the activities are directed towards
the achievement of organisational goals. This all functions generate the structure of organisation
which have different departments for different functions.
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Organisational structure and functions help in achieving goals
The structure in organisation is formed and different functions are directed towards the
achievements of goals of Tesco. The finance functions provide finance to make plans and
policies for the employing effective human resource for performing operations. The sales and
marketing functions help in promoting and selling the products in the market. The research and
development help in understanding market and customers which help in satisfying the needs of
customers in better manner. The marketing functions help in promoting products in most
efficient manner so the new customers attract to purchase the products which is the goals of
Tesco. Efficiency level rises in organisation help in achieving the goals and objectives
effectively.
All the departments of the company are interrelated with each other such as marketing
department are link with the finance department such as for the innovative product company
needs promotion so they need additional finance so that if they are able to provide money to
them then only marketing department promote their products in the market. if departments are
not able perform their task and responsibilities then it will directly affects an organization
performance in the world. At the every level each member of the firm has a responsibility to
give more contribution to the work and it help to get higher performance and fixed target in the
world.
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TASK 2
P4 and M3) PESTLE analysis of Tesco
Tesco is super market chain that is UK based. Having many super market chain. This is
the second big organization in UK after walts mart, This selling all food & non food items in
country also having option of online purchase store in U K. Tesco having second position in UK
in terms of profit earning, tax paying & number of retail stores (Picazo-Vela, Gutiérrez-Martínez
and Luna-Reyes, 2012). The macro factors that effects the business of tesco up to the pestle
analysis is as follows, The very first factor of pestle is the political conditions of country & their
relationship with their company's government.
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Illustration 1: Organizational chart
source: Organizational Chart example

Political factors
Recently UK government has increased the tax rate that is directly effecting the profit of
the company & putting impact on it, especially VAT is been increased by the government by
20% due to this the consumer spending power is also been decreased. New tax measurement
have been introduced by UK government, Fat tax have been introduced by the government of
UK, Their main aim was to control the obesity problem, People and government both had
concern about it, due to this the sales were getting down after these conditions tesco have come
up with healthy and wide range of products(stride and higgs 2014). Come up with increase in
sales, this step can bring change in the problem of obesity and this is to be considered as the right
step to over come with the problem in population.
Government provides different types of policies to the companies but sometimes firms are not
able to adopt all the policies so it has negative impact in the firm and their performance.
Economic factors
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Illustration 2: PESTLE analysis
source: Definition of PESTLE Analysis

The economic factors are totally different from other factors, New plan and strategy have
been made by UK government to solve the financial crises. There estimated a higher growth in
economy and 2.7% increase in GDP was estimated There are lot many ways of growth and
number of opportunities in business like super marketing, Financial crises are opposition to the
economy that is the reason of increasing the unemployment, disposable income was also reduced
Due to consumers were not spending on the purchasing of the products. Recession was the main
reason behind the decrease in revenue of tesco.
To increase a productivity Tesco needs to reduce the product price and produce innovative item
to the client it help to increase a level of economic and also helps to open multiple stores in
different countries.
Social factors
Experts says the change in consumers perception is directly proportional to the change in
quality and price of the products, online and shopping services are made for customers
convenience and also to stand hard in competition.(connolly, hyndaman, and mcconville2013)
year 2013 tesco was captured in a horse meat scandals, this phase put a bad impact on image of
tesco. The sales were also effected by this condition, And put a negative impact on the image of
the company.
Technological factors
In the term of Technology, scenario is different who is in retail business in terms of
supply chain & logistics in the distribution of the product they must start mobile app to reach the
product to the customers fast & quickly. Other wise in terms of technologies these type of
company are not good in performance.(chen and et.al 2014)
Environment factor
tesco is starting new step to reduce carbon footprint and it will reduce 50% by the year
2020, Tesco is also minimizing waste products that they found in their stores.just to increasing
social values in customer, tesco keep all the record of environment factors at time of store
adjustment, this is done for the sustainable development (brammer and pavelin 2008).
Legal factors
Tesco reducing the prices of their products for the customers,tesco is coming with new
policies where the prices of product are less that can increase in the sale of the company.They
also introduced promotional offers where less prices may charge from the customer, This leads to
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the revenue generation to company, tesco is also giving financial services of credit card, loans,
saving and mortgage in year 2014, legalisation action is putting direct impact on the performance
of tesco.
Company must need to use legal laws such as employment and legal policies in a firm so that it
helps to maintain employee relation and also help to give protection to an employee.
The internal analysis include:
l Competitors
TASCO is a large u.k. Firm and retailer who's main competitors are ASDA both are very good
in retailer. If ASDA profit increases or ASDA customers increases than TASCO are suffer from
losses.
l Suppliers
This is an internal analyses of the company TASCO . TASCO increasing the no. of suppliers. So
TASCO run so well in comparison to their suppliers .
l Customers
TASCO is 28.4% market share and there competitors ASDA is only 17% to increasing now of
customer by TASCO run well.
Tesco manager need to identify the consumer needs and then manufacture the products in a
market. All the consumers have various behaviour and preferences so they need to analysis that
and then give appropriate item to the client.
l Employees
This is an internal analysis of the company TASCO encourage there employees or motivated
there employees they doing well and company will earn more profit and market growth other
than there competitors.
Management need to provide free environment to the worker so that they can easily work
together for the higher performance. Employee relation directly affects the overall firm
productivity so the manger needs to maintain their relation by applying different types of
strategies and approaches.
l Market intermediaries
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In the internal analysis there are middlemen play a crucial role. Marketing intermediaries are
agents, wholesalers, distributors all the part of market intermediaries so to earn more profit
focused on market intermediaries.
D2
All macro factor affect the overall company performance such as some has the positive
impact and some of them have the negative impact on the business. In technology they introduce
the new technology with efficient feature then if the company is able to adopt the technique then
it is good for the company for enhance the performance of the company. These macro
environment help to achieve the desired goal when there are some changes in the factors then
company need to adopt them as Tesco did in recent year. This gives the more efficiency to the
company in the market.
P5 and M4 Internal and extraneous reasoning for Tesco
Analysis by SWOT
Internal and external environment affect the company performance where strength and
weakness comes in internal and opportunities and threats comes under the external environment.
By SWOT analysis easily get the performance of the company in the industry and level of
competition. These all factors affect the overall performance of the company.
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 Strength: The strength of the Tesco is it has large brand identification in the world. It
has 6,784 shops in the world and the range is increased day by day. It utilize the different
methods of the business like inventation of new stores which are little shops in local
community to make purchasing more accessible for the client (Peng and Nunes, 2007).
Another strength is in the worldwide dealing include online shopping, associated task like
in china and localized starter.
 Weaknesses: In Tesco, there is an issues like the organization has lack of occurrence in
some kind of market such as its own brans tablets, smartphones (Child, 1972). This firm
needs to invest much in the IT market as well as in the store renovation because this will
affect the sale in the industry.
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Illustratio
n 3: SWOT analysis
source: SWOT Analysis

 Opportunities: There are many possibilities for firm including enlargement into the
industry such as digital diversion through their 80% assets in reflex box. Online shopping
can give the higher flexibility to the client who is engaged in the family or have quality
issues so this firm is trying to understand the customer needs by expand the operations in
the market (Miles and et.al., 1978).
 Threats: There are many treats like many companies has the brand identification like
Tesco has. In global market there is many competitor of this organization. By applying
the new strategies in the production of the product this will give the more profit to the
firm and also increased the company performance.
P6 Interrelationship with macro environment based on SWOT analysis
 Strength: The main strength is that it has a large brand identification in the world. To
maintain the recognition update the strategies of the product and give the appropriate
services to the customers. The economic factor gives the positive impact on this firm
because it will help in growth in the grocery market and this is the main market which
Tesco run. The economical factor is helpful for the company to produce a good quality
product and maintain the brand identification (Bourgeois, McAllister and Mitchell, 1978).
 Weaknesses: This organization has many issues like lack of knowledge and lack of
direction. This will give the negative impact on the company. The technology macro
environment is affect the company performance because Tesco has lack of knowledge in
IT market. It has their own tablets and phones but those has not good and efficient
techniques. Tesco needs to advance and enhance the mobile technology in the industry.
 Opportunities: They have many opportunities to grow in the market like online shopping
and digital entertainment. The economic and political macro environment factor gives the
positive sign because this firm have many opportunities to improve the performance in
the business (Oldham and Hackman, 1981).
 Threats: There are many threats found like many companies are challenging with the
Tesco. So company needs to maintain the brand recognition by apply new styles in the
existing product. Social macro environment has positive impact on the company by
applying new strategies and different approaches to achieve the desired goal (Fiol and
Lyles, 1985).
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These all are the factor affect the decision making system because the strength can help to
take decision in the company. And also improve the efficiency of the firm. There are many
opportunities for this company like online shopping etc. so that the company can easily take the
decision based on the opportunities and threats.
CONCLUSION
The business environment affects the overall company performance. Every organization
has different business environment for working together. Private, public and charity these all are
the different types of organization. All these have different strategies and approaches to maintain
the brand recognition. Each department has different function in firm that would be helpful to
maintain the brand recognition. By applying and analysing the threats and weaknesses through
models in the company easily get the problems and resolved them for enhancement of
performance in the firm.
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REFERENCES
Books and journals
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Kolios, A. and Read, G., 2013. A political, economic, social, technology, legal and
environmental (PESTLE) approach for risk identification of the tidal industry in the
United Kingdom. Energies. 6(10). pp.5023-5045.
Brașoveanu, I.V. and Bălu, P.E., 2014. The Influence of the Business Environment on Small and
Medium Enterprises. Journal of knowledge Management, Economics and information
Technology. 4(2). pp.1-13.
Haufler, V., 2013. A public role for the private sector: Industry self-regulation in a global
economy. Carnegie Endowment.
Picazo-Vela, S., Gutiérrez-Martínez, I. and Luna-Reyes, L. F., 2012. Understanding risks,
benefits, and strategic alternatives of social media applications in the public sector.
Government information quarterly. 29(4). pp.504-511.
Stride, H. and Higgs, M., 2014. An investigation into the relationship between values and
commitment: A study of staff in the UK charity sector. Nonprofit and Voluntary Sector
Quarterly. 43(3). pp.455-479.
Connolly, C., Hyndman, N. and McConville, D., 2013. UK charity accounting: An exercise in
widening stakeholder engagement. The British Accounting Review. 45(1). pp.58-69.
Buurman, M. and et.al., 2012. Public sector employees: Risk averse and altruistic?. Journal of
Economic Behavior & Organization. 83(3). pp.279-291.
Chen, Y. and et.al., 2014. IT capability and organizational performance: the roles of business
process agility and environmental factors. European Journal of Information Systems.
23(3). pp.326-342.
Brammer, S. and Pavelin, S., 2008. Factors influencing the quality of corporate environmental
disclosure. Business Strategy and the Environment. 17(2). pp.120-136.
Ebers, G. C., 2008. Environmental factors and multiple sclerosis. The Lancet Neurology. 7(3).
pp.268-277.
Peng, G. C. A. and Nunes, M. B., 2007. Using PEST analysis as a tool for refining and focusing
contexts for information systems research.
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Child, J., 1972. Organizational structure, environment and performance: The role of strategic
choice. Sociology. 6(1). pp.1-22.
Miles, R. E. and et.al., 1978. Organizational strategy, structure, and process. Academy of
management review. 3(3). pp.546-562.
Bourgeois, L. J., McAllister, D. W. and Mitchell, T. R., 1978. The effects of different
organizational environments upon decisions about organizational structure. Academy of
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Oldham, G. R. and Hackman, J. R., 1981. Relationships between organizational structure and
employee reactions: Comparing alternative frameworks. Administrative science
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Nutt, P.C., 1984. Types of organizational decision processes. Administrative Science Quarterly.
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Fiol, C. M. and Lyles, M. A., 1985. Organizational learning. Academy of management review.
10(4). pp.803-813.
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