Impact of Business Environment on TESCO

This assignment examines the impact of the business environment on Tesco, a leading global supermarket chain. It analyzes Tesco's organizational structure and its framework for operating in dynamic markets, exploring how these factors contribute to the company's success. The analysis draws upon provided illustrations depicting Tesco's structure and framework, as well as relevant references.

BUSINESS
MANAGEMENT

INTRODUCTION
Business management is the process that helps managers as to manage their overall
working activities and operations. It includes many those process which are associated in running
a firm, such as- planning, controlling, directing and organising. Business management is helpful
in covering all areas of organisational procedures in which all people are get together in order to
achieve specific goals and objectives of the company. Apart from this, it is the moral obligation
of business managers is to maintain healthy and positive environment (Klapper, Lewin and
Delgado, 2011). It encompasses all internal and external factors which impact on organisational
performance and its productivity in target market. The present report is based upon NatWest
which is a largest commercial and retailer bank of UK. It was founded in 1968; basically it deals
in banking and insurance products. NatWest has 960 branches over the world. In this present
assignment there will a discussion on various types of business organisational sectors, i.e. public,
private and voluntary. It involves that, various types of functional unit of the company are
connected with each other. Readers will also get knowledge SWOT and PESTLE analysis of the
company and how their strength and weakness are interrelated with each other.
TASK 1
1.1 Types and purpose of business organisations
In this competitive market, there are various types of organisational sectors, such as –
public, private and voluntary. All these units have a great role in the country's economic
condition. Below mentioned a brief description of these business organisations are stated as
under: - Public sector – It involves all those business organisations which are owned and in under
control of the government of the nation. In addition, the government is liable to operate
their all functions and activities. Public sector organisations has put a huge impact on
economical condition of UK; it means that how government can deal with market failures
in order to achieve certain outcomes (Chow and et. al., 2012). The core management of
Public sector organisations are divided into these areas: - Central and local government,
NHS, Criminal justice etc. The main of this sector is to provide quality products and
services to people at average rates. TESCO is relevant example of public sector
organisations, it is a multinational chain of retail and grocery products. The company
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was established in 1919 and presently its is situated in 6573 locations across the globe.
These are the main competitors of the company: - WALMART, WAITROSE,
SAINSBURRY, MORRISONS, ALDI, LIDI, ASDA etc. but TESCO has covered 28.9%
share of overall market and its total revenue is £57, 986 million. There are almost 486560
employees are working the company because it provides them efficient and flexible
working environment. The prime vision of TESCO is to serve most valuable goods to
customers or communities in which they operates its business, the company wants to be
fully committed and loyal with its all clients. Private sector – In UK, there are many private sector organisations are implemented and
they are liable form its economic growth and development. Private sector encompasses
those companies which are directed by an individual or by a group of person with the aim
of earning profits. Along with this, in developed nations these private firms are able to
contribute a great percentage towards its GDP. In United Kingdom, there are 83.67%
private organisations which are helpful in increasing its gross domestic product rate
(Aterido, Hallward-Driemeier and Pagés, 2011). For example- Best-way Group is one of
the most popular private wholesale company, it deals in cement, banking and pharmacy
industry. The firm has 126000 retailers and 65 warehouses worldwide. It also runs the
third largest Pharmacy industry of UK, Well Pharmacy. Bestway group was founded in
1976 and currently it operates its function in 110 nations over the world. Along with this,
its number of employees are 34500 and annual sales revenue is £ 3.5 billion. The main
vision of the company is to create a Green living country by using powerful solutions of
natural resources. It says that, “our dream is to render clean and sustainable environment
to future generation. Whereas the main mission of the company is to promote green
resources and technology which is helpful in resolving the issue of power crisis in cost
effective manner.
 Voluntary sector – These types of business organisations are implemented in order to
enrich as well as improvise society. Voluntary sector organisations are existed for
creating social welfare and wealth. It referred, NGO's, charities, non-profitable
organisations, third party organisations etc. There main aim is to generate social service
among lower sector the society which are not able to fulfil their basic needs and wants.
Wellcome Trust is the example of such type of business organisations, that biomedical
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charity. It was founded in 1936 with an objective of developing animal as well as human
health. In addition, the prime vision of the company is to find extraordinary amendments
in health care industry. The charity has annual endowment of £3.4 billion.
Types of public, private and voluntary companies: - Sole proprietors – It involves those kind of businesses which has not any separated legal
existence from their owners. In other words, in sole proprietorship one can operates his or
her business and the person is wholly responsible for its all debts and funds. The business
only needs register only with his or her name and a secured legal license in order to
operate sole proprietor. Partnerships – In this, two or more persons are required to do any business who are
ready to share all profits and losses of the company with a divided ratio. There are two
types of partnership, such as- general and limited partnership (Hamilton and Webster,
2015). In general partnership, its members are able to manage all responsibilities of
company as per the partnership deed whereas in limited partnership the members are
serves as the investors; partners have overall control on all operations of the firm, they
are not involved in any activity of the company and have no control over its functions. Trade associates – It is known as a group, sector or association that is funded by further
businesses of specific industry. Basically, trade associations deals with several public
relation activities, like – education, advertisements, public donations, publishing etc.
along with this, trade associations are known as non-profit organisations that are
governed by some laws and legislations.
 Franchisee – This includes those types of business in which the owners sell their rights
to third party by taking some fee or amount. After that, the has right to use its logo,
symbols, name and products.
P2 Size and scope of various types of business organisations
There are given below size and scope of public, private and voluntary business
organisations, such are as stated as follow: - Public sectors – It is often responsible in order to provide all public services in UK. In
public sectors, funds are come through direct and indirect taxation by the activities of
revenue earnings. Along with this, ¼ of the overall population of UK is employed with
public services and it contributes 50% in order to increase GDP rate of the country.
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Education, health and social care are fields that is mainly covered by public sector
organisations. As TESCO is known as the public sector organisation UK, the company
famous for its good quality products and services. Its main aim is to provide best and
valuable services to people for their betterment and development. These are main
stakeholders of the company, i.e. customers, government and trade unions.
Customers is the person who buy all products and services of the company. These are
main stakeholders of the company, who are responsible in enhancing its sales and higher profits
so as the firm can accomplish its goals and objectives (Cuervo‐Cazurra, 2011). Customers wants
TESCO produce high quality trades which value of their money.
Government – It is another important stakeholder of public organisations. Government
concerns with a group of people which makes policies to communities for their growth and
development. It creates legal laws and regulates for in which a firm must operates its functions, it
is the moral duty of every firm is to follow all legislations of government.
Legal structure of public sectors – In UK, during the formulation of PLC there is
required one director and seceraty. In public sector companies, it is essential that all members
have to take some shares of the company and they are included in memorandum of association.
Such people are known as subscribes. Along with this, the firm has right as it can increase its
authorised share capital with the help of ordinary resolution. The company can pass it and send
it to the Companies House within the days of being passed. Public limited organisations also
have to fill form no. 122 at the time of registration. Private sectors – There are many companies are implemented in UK with the aim of
making money; these companies also provides more employment than public sector.
Commercial enterprises that are came in this category, drive down their product's prices
at the time of competition. Bestway Group is a private sector organisation, it deals in
many sectors. The company renders its trades and services at nationwide. LIoyds
pharmacy, Carlyle and Alliance Boots are the main competitors of the firm and it has
covered 35% market share of pharmacy industry over the world. Employees, customers,
society, stockholders etc. are the stakeholders of the company.
Employees are person who have a significant role in functioning activities of the
company. It is essential for private sector business organisations is to supply effective services to
their staff members as they can work in an effective manner (Siewiorek and et. al., 2012). In
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other words, employees performance helps a firm is to achieve its aims and targets in an
adequate manner.
Shareholders – Such persons plays a vital role as they raises capital of the company so
that it can grow in potential market. Stakeholders also participate in making strategic decisions to
the venture.
Legal structure – There is minimum capital required while starting a private limited
company but their managers have to show their accounts on Companies House. Private sector
companies has right to sell their shares in market in order to increases their share capital.
 Voluntary sectors – In UK, there are many voluntary sectors that serves their services for
social welfare and development. They emphasises upon public benefits and with the aim
of enhance their living standard (Blanchard, Tolbert and Mencken, 2011). Wellcome
trust is the best instance of these non-profitable business organisations. It is an ample
provider of non-governmental funding for its medical and scientific research. It follows
this slogan- “good health helps in serving better life”. In voluntary sectors, the broad of
directors are act as trustees, they manages overall working activities and operations.
Stakeholders of the charity are stated as under-
There are many funders of the firm who gives money in order to bear organisational
expenses, i.e. charitable trusts, corporate groups, individuals, government agencies are the prime
funders of the company.
Volunteers are the another stakeholders of the company which donate some money for
completing day to day activities of the organisation.
Trustees are the people who are responsible to take strategic decisions and provide
directors to these non-profitable organisations.
P3 Relationship between organisational functions and how they link to its structure and
objectives
In every business organisations, its all functional units are linked with each other. There
are various departments in the company, like- finance, human resource, marketing, production &
operations, research & development etc. In NatWest, it is necessary for managers as to follow an
effective or sufficient organisational structure in order to achieve its all goals and objectives.
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(Source: Organisational structure of NatWest, 2017)
Organisational structure of NarWest: -
The company is following Matrix organisational structure that is a combination of
functional and divisional organisational structures. It is followed by those business entities which
operates their operations at global level. Matrix structure helps them to run their business
smoothly (Harrison, 2011).
In that financial industry, all working activities are divided as per their tasks and needs.
In NatWest, all staff are managed effectively so as they can serve valuable services to their
clients. In that, all departments are interrelated with each other in order to perform their day to
day activities. CEO of the company is culpable in order to manage all functions and workforce of
all units. Senior managers are following all directions of CEO in order to achieve goals and
objectives of the company.
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Illustration 1: Organisational structure

(Source: Organisational structure of TESCO, 2017)
Organisational structure of TESCO -
In this above diagram, there are some committees which are involved in organisational
structure of TESCO, such as – audit, corporate social, remuneration, nomination and disclosure
committees. Apart from this, religion managers of the industry gives directions to store manager.
In addition, food trading manager, non-food trading and personnel managers are follows
all orders of stores managers. The picture shows that all senior managers divide duties and
responsibilities among their subordinates, i.e. fresh food section and ambient food section
managers, electronic and clothing section manager etc.
P4 Positive and negative impact of macro environment on NATWEST operation
External environment is define as a outside surrounding of an industry which can impact
the outer environment of the enterprise. These elements can be manageable and it is even not in
manage of company. For the workers it is very important to measure the effect of the micro
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Illustration 2: Framework of TESCO

environmental sources as that might effect it indirect and directly. The manager of such kind of
business is Netwest has to analysis the micro environment and to determine, it they have to
conduct PESTLE analysis which are as follows:
Political factor: Natwest is a banking sector and it is a powerful source. In this factors the
legislations and different rules and regulation which is made by legal authorities such as
government bodies and they can impact the industry there are several effects like interest rate,
and tax rates etc. they can impact industry in a same manner. So it is very important fore the
cited company to known regarding all the constitution regarding the national in which they are. If
the legislations which is made would be best advantages for the business, such as if the taxes of
sustaining services and products is made less. If the various norms which is made to different
from the businesses benefits.
Economical factor: These factor is interrelated with bank. According to this factors that person
income also impact the purchasing power of the person. If the company benefits as well as
revenue is better that the financial situation will not effect in their action.
Social factors: In this factor, different people's way of conviction, life and qualities etc. and they
can effect task either straightforwardly and by implication. In a positive way, different person
accept lawyer with respects to advance form various workers which are working in bank, so they
can provide better support to collecting social benefits.
Technology factors: As per the time modifications, in this way individuals are utilizing
innovative strategies and instruments into their company. As a present day, a person can pull
back amount through ATM and charge cards etc. Alongside this they can without few of a
motion exchange their store and utilising on the application of web.
Environment factors: By using these factor, in this way they can make difficult condition
regarding to conflict. As per the output and in this way paper work is decreasing in the high
ranges. It is very essentials to focus on the environment factors which could impact the enterprise
from any manner. The natural source can be ventilated but any of the interference can be taken
by the industry so that they can to acquire large impact.
Legal factors: As per the fundamental of Natwest to take any rules and regulation. In this way
goals as well as objectives can provide protection and security to their buyers.
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P5 Implement internal and external analysis of the company
Internal analysis of the company helps it to identifies those which will impact upon its
future growth and success. It can be done through SWOT analysis that involves strength,
weaknesses, opportunities and threats of the business enterprise.
SWOT analysis of NATWEST: -
STRENGTH
 It is one of the leading banks of UK
that is enable to boom at the
marketplace. NatWest has strong
network worldwide where it can
distributes its products and services.
With this, the organisation an easily
reach with its potential customers
(Nicolaidis and Katsaros, 2011).
 It has successful history of quality
products and services; NatWest also
focuses on new product innovations
that helps it to attain more clients in
competitive market.
 The company executes new projects to
investors in order to enhance its venture
capital. And it also gives good returns
by new revenue streams on its capital
expenditure. It has highly skilled workforce,
NatWest timely organise training and
development assistance for its
employees. It is assistive for them to
acquire new skills and innovations.
WEAKNESSES
 The company is not able to tackle all
challenges from new competitors.
 NatWest face many losses in loans that
direct affects its productivity and
capitalization.
 Declining operational efficiency
impacts its margins.

OPPORTUNITIES THREATS
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 The new taxation policy can open many
doors for opportunities and its impact
upon business activities of the
company. Lower inflation rate helps in attaining
market stability and provide low rate
products to customers which increases
its sales.
 There are many new competitors are
arises market with new technologies
and innovations.
 Rising raw material is also a threat for
the company in terms of its
profitability.
P6 Explain how strength and weakness interrelate with external macro factors
PESTLE and SWOT analysis both are investigation is an especially valuable and
compelling for cited company in light of the concept that is supports in distinguish small as well
as large scale situation which presume an exceeding famous in attaining goals and focus of an
enterprise within specific time period. Both outside and inside elements are linked with each
other because of their duty towards suggest endeavour.
There are different objectives of swot analysis is separate from pestle, which are mentioned as
below:
 Increasing the resent snags and issue presenting in an organisation.
 Interior elements required to identifying the internal problems of providers, clients and
representatives as well as external factor, so in this way various person conviction and
standard are set by legal authority such as government and making a domain charge from
any social system.
 Products cost is generally influenced due to progress in a concept.
 Fundamental allotment assets for assembling innovative and creative items.
 Precise collecting data and information by leading exploration events.
 Correct strategy for helping danger.
 Assessing potential such as future cost.
CONCLUSION
As per the above mentioned report, it can be concluded that there are various enterprise
which have several ways of functioning and different scope and size of the several economy. It is
very essential to know regarding the factors which are highly impacting the economic from
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external environment. In this report they have to determined by doing correct analysis. They can
be complete from pestle and swot analysis which is very important to identify company internal
and external position in the marketplace.
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REFERENCES
Books and Journal
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the business creation process. In Entrepreneurship and Economic Development. (pp.
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providing communication services between a broadband network and an enterprise
wireless communication platform within a residential or business environment. U.S.
Patent 8,155,155.
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Cuervo‐Cazurra, A., 2011. Global strategy and global business environment: the direct and
indirect influences of the home country on a firm's global strategy. Global Strategy
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Siewiorek, A., and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Blanchard, T. C., Tolbert, C. and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development.
Cambridge Journal of Regions, Economy and Society. 5(1). pp.149-162.
Harrison, R., 2011. Learning and development. Development and Learning in Organizations: An
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changing business environment: A case of Greek IT CEOs. Journal of Strategy and
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