Business Environmental Analysis

Business
Environmental
Analysis

INTRODUCTION
Business environment also known as market environment where analysis of both external
and internal factors are included which is required by to conduct business operations in a more
effective and efficient manner. It has became necessary for the management team of the
company to examine all these factors before operating their business operations at the
marketplace. In this report, TESCO has been selected that is a well known retail organisation
(Abushova, Burova and Suloeva, 2016). This is the company which mainly deals in households
and grocery items. Under this report, PESTLE as well as SWOT analysis are going to be
conducted which help in examining different factors available at the market which might
influence the business functions of the company.
TASK 3
P4. Positive & negative impacts the macro environment has upon business operations, supported
by specific examples
It is said that TESCO is considered as one of the fastest leading business company that is
dealing in groceries as well as general merchandise. It is a British multinational corporation
which deals in all over the world where business functions are majorly affected by internal and
external factors. Both micro & macro factors are going to be discussed as follows where
PESTLE analysis are as follows:
Political factor: It that component which consist of governmental policies, labor laws,
foreign trade policy, environmental laws and many more. All these factors have their own
positive & negative impact which might create affect on the business operations. In reference to
TESCO, it has been said that the company deals & operates across the world which includes
Japan, USA, Germany and many more. Changes in governmental policies highly affect the
profit margin of the organization (Eigner and et. al., 2019). This is considered as one of the most
significant and essential element which affects the functionality of TESCO. Positive impact: It has been evaluated that political condition of United Kingdom is quite
stable & it also support investments which creates positive impact on the business
functions of TESCO. Therefore, it is beneficial for the organization in order to conduct
there business operations in an effective manner.

 Negative impact: There are high number of international wars and terrorist attacks which
influences the whole political condition, which leads to impact negatively on the business
functions of TESCO. This as a result affect the overall business functionality in a
negative manner and reduce the overall outcome of the organization.
Economical factor: Another factor which affects the business functions is economic
method of a country. Some of the factors consist of inflation rate, interest rate, employment rate
and so on. In the present context of TESCO, it has been said that economic condition of UK have
strong economic position. Which highly affects the profitability and revenue of the company and
help them in gaining various opportunities. With the help of developing large number of job
opportunities, living standard of individuals will be enhanced (Gupta, Gupta and Gupta, 2019). Positive impact: Strong economic condition of United Kingdom help TESCO for
generating more profit and revenue at the competitive marketplace. Therefore, it will
assist in generating employment opportunities which leads to increase the standard of
living. With the help of this factor, individuals will be able to improve there living
standard in an effective manner which as a result improves the goodwill of the country. Negative impact: Due to rise in labor cost as well as increase in tax rates might affect the
reputation and profitability in an adverse way. This might affect the whole profit margin
of the organization at the competitive marketplace which limited the economic system of
the country.
Social factor: Another essential element is social factor which includes values, beliefs,
perception, tradition as well as culture. This factor can have a negative influence and effect on
the business operation. Therefore, it is required by the management team of TESCO to identify
the needs and wants of individuals before producing goods and services. In reference to TESCO,
it has been said that this factor if adopted by the company enhance the brand image and goodwill
at the competitive marketplace. Positive impact : With the help of this element, an organization will be able to satisfy the
needs and wants of customers in an impressive manner. This as a result increase the
brand image of the company (Muhammad Siddique, 2015). Therefore, it plays very
positive work in order to improve the living standard of people. Negative impact: Whereas, due to continuous change in requirements of customers needs
might affect the profitability of the company. Whereas, many times government force