Business and the Business Environment

This presentation discusses the impact of macro environment on business operations and the internal and external analysis of firms. It also explores the interrelations of strengths and weaknesses with macro factors. The case study of Tesco is used to illustrate these concepts.

BUSINESS AND THE BUSINESS
ENVIRONMENT

 Introduction
 Impact of macro environment on business operations
 Internal and external analysis of firm
 Interrelations of strengths and weakness with macro factor
 Conclusion
 References
TABLE OF CONTENT

Business Environment refers to the surroundings in
which business exists. It constitutes the sum total of
all the internal and external elements which affects
the business. To establish a business in not a difficult
task but to successfully sustain it in the competitive
market it is necessary to analyze all the external and
internal elements present in the business.
INTRODUCTION

In the modern world, it is required to identify the
factors present in the business which changes
according to the changing needs of customers or
dynamic environment. Every organization runs
business to attain profits but it is not easy to
survive in the competitive business world; it is
required to adapt changes as soon as possible.
IMPACT OF MACRO ENVIRONMENT ON BUSINESS
OPERATIONS

Tesco is a international food retailing company which was founded by Jack Cohen in the year 1919. The
company is headquartered Welwyn Garden City, UK. The company is well known for providing food and
non-food products and its prolonged services. It is ranked as the second biggest retailer in terms of profits
earned. Tesco has added its slogan ‘every little helps’ to its goals that includes customers satisfaction and
better relationships. Business environment of every organization consists of macro environment and
micro environment
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Internal and External analysis assists an organization to determine its strengths and weakness, in order to
analyze it SWOT analysis has been used by Tesco. It is a strategic management tool and a framework
which is used by managers of Tesco to evaluate the competitive position in the market.
INTERNAL AND EXTERNAL ANALYSIS OF FIRM

 Strengths: As one of the leading organization in its industry, Tesco has numerous strengths which
helped in penetrating brand-new markets.
 Weaknesses: These are the areas where the company needs to improve upon. In Tesco the inventory is
high in comparison of the competitors, so the company will be required to raise more capital to invest
which will impact the long-term growth of the business.
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 Opportunities: It refers to the chances which a company has to grow. Tesco has the opportunity to
grow its business by increasing the range of products.
 Threats: In Tesco, there is no regular supply of innovative products due to which the market share will
ultimately decline
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Every organization have different goals and objective, in order to maintain competitive position in the
market, but the main objective of every business is to satisfy the needs of its customers. Strengths and
weakness of a business organization are related with macro and micro environment factors
INTERRELATIONS OF STRENGTHS AND WEAKNESS WITH
MACRO FACTOR

Interrelatedness between macro environment factors with organizations strengths and weakness are as
follows:
 Political Factors: It refers to when government of the country intervenes in the functioning of an
organization. These are the activities related to government which might have affect on the
performance of the company.
 Economic Factors: It refers to the factors that impact the economy and includes wages, interest rate,
tax rate , policies, etc. These factors influences future investment value and are not in direct relation
with the business.
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 Social Factors: It is associated with the forces within the society which includes friends, family,
neighbors, colleagues, etc. To understand the customer it is necessary for Tesco to develop a
demographic profile of the customer so it can motivate them.
 Technological Factors: It refers to those innovations in the equipments and machinery that are being
used in an organization to promote business
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 Environmental Factors: It refers to the known
characteristics of the environments that impact
the growth, survival and operations of the
business.
 Legal Factors: It refers to all those restrictions
or rules and regulations which a company
should be followed by an organization in order
to trade successfully.
CONTINUE…..

From the above study, it has been analyzed that a proper evaluation of business environment must be
done in order to gain a detailed knbowledge about the factors present in the business organizations. The
study also identifies various objectives which business organizations have and also tries to fulfill the
demand of customers and measure the overall performance of Tesco with the help of SWOT Analysis and
PESTEL. The report has explained various strategies to sustain in the competitive market and has
explained tools which were used to determine the factors that affected the business both internally and
externally.
CONCLUSION

 Demil, B., and et.al., 2015. Introduction to the SEJ special issue on business models: business models
within the domain of strategic entrepreneurship. Strategic Entrepreneurship Journal. 9(1). pp.1-11.
 Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
 Hallward-Driemeier, M. and Pritchett, L., 2015. How business is done in the developing world: Deals
versus rules. Journal of Economic Perspectives. 29(3). pp.121-40.
REFERENCES

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