Business Strategy: Impact of Macro and Micro Environment on Tesco

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Using different frameworks examine the impact of macro environment..........................3
TASK 2............................................................................................................................................5
P2 Evaluate internal environment and capabilities of enterprises..........................................5
TASK 3............................................................................................................................................7
P3 Explain appropriate strategies to improve competitive edge and market position based
on evaluation of competitive market using the Porter Five Forces Model.............................7
TASK 4............................................................................................................................................9
P4 Using a range of theories, concepts and models deliver strategic management plan and
objectives of chosen enterprise...............................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
BOOKS & JOURNAL.........................................................................................................13

INTRODUCTION
Business strategy is considered as a process in which firm makes effective strategy for
accomplishing mission and vision in targeted period of time. Due to increase in level of
competition, it is necessary to make strategy related to bring innovative ideas at marketplace.
This report is undertaken upon company named as TESCO. It is the multinational chain of
supermarket which is located in UK. This organisation was funded by Jack Cohen in the year
of 1919. The main purpose of this company is to provide superior quality products and
services to its customer in order to satisfy them. In this assignment, PESTLE and SWOT is
used for assessing internal as well as external environment which is important to consider
while making effective strategy within organisation. Apart from this, the porter five force
models is used for gaining competitive benefits as well as Ansoff matrix is adopted for
providing strategic direction for future growth (Linder and Williander, 2017).
TASK 1
P1 Using different frameworks examine the impact of macro environment
Business strategy plays an important role for increasing productivity as well as
profitability of organisation. In this dynamic environment, it is necessary to change strategy
to cope up with it in an effective manner. It aid assistance to business to bring innovative
ideas, beliefs as well as thoughts to enhance activities and functions of organisation. There
are different external environment which imposes direct impact on performance level of
business which is given below:
PESTEL Analysis
PESTEL Analysis is the framework which is adopted for assessing different functions
and activities of market in an effective manner. In context of TESCO, they adopt this
framework for identifying different factors which influences success and growth of business.
It aid assistance to business to understand changing trends and fashions at marketplace.
Therefore, the business focuses on saving time, resources, time and manpower (Lai, Melloni
and Stacchezzini, 2016).
Political factors: Political factor includes taxation structure, environmental law as
well as government regulation and many more which imposes direct influence on growth of
business organisation. Due to political stability of UK, the company need not be changed in
their policies which impose positive impact on organisation. Due to Brexit, it influences
favourable influences on productivity as well as profitability of organisation. On the other
hand, due to increase in tax rate in order to control the issue related to obesity thus it
adversely affect the sales and level of profitability of business organisation.
Economic factor: It involves exchange rate, interest rate and inflation as well as
deflation rate and so on which enforce direct influences on productivity as well as
profitability of business organisation. Due to increase in unemployment rate, the income of

an individual person is lower down, thus results in decreasing the spending of money by
consumer and shifts their brand towards products which is sold at relatively less price.
Therefore, it downward sales as well as erode level of profit at marketplace. On the other
hand, the TESCO focuses on offering superior quality products and services to its customer
as per their changing need and wants in order to boost sales in future period of time.
Social Factor: It includes age, population, taste as well as preferences of customer
and so on which imposes direct influence on productivity as well as profitability of
organisation. Due to increase in online shopping by TESCO for product related to groceries.
Therefore, the issues related to elder person who do not use mobile app for this purpose. But
the people who earn more income accepts it positively, Thus, the change in customer opinion
as well as they attracted towards online shopping increases sales and profit of TESCO in
future period of time. On the other hand, due to scandal occurred in 2013 that they do not
provide superior quality burger to its customer who ruined the brand value and reputation of
company in front of customer at marketplace (Langabeer and Champagne, 2016).
Technological factor: Technology plays an important role for success and growth of
business organisation. Therefore, it is necessary for TESCO to implement advanced
technology for providing innovative products and services to its customer in order to satisfy
them. Due to strong supply chain management which is very cost effective for individual
person, thus they prefer to deal with product provided by TESCO. It helps company in
gaining competitive advantage over rival firm at marketplace. And also they focus on
technological advancement in order to provide innovative products and services to its
customer in order to satisfy changing need of them at marketplace. Whereas, the cost of
implementing advanced technology is very high that adds extra cost for the organisation
which decreases sales and profit in future period of time (Madhushree, Kumar, A. and Aithal,
2018).
Environmental factor: It includes weather, temperature as well as climatic condition
and many more which imposes direct impact on performance of company. In context of
TESCO, they provide eco-friendly products and services to its customer in order to increase
their standard of living of individual person in society. It increases experience level of
customer at marketplace. And also they emphasised on protecting environment which will be
effective in taking decision related to future success and growth of company. Whereas, due to
change in climatic condition very frequently, it is not easy for firm to implement new
strategies and policies within organisation. Therefore, it adversely affects productivity as well
as profitability of organisation.
Legal factor: Legal factor involves laws, legislations, antitrust laws and many more
which is important to consider by company for increasing success and growth in future period
of time. In context of TESCO, they emphasised on follow all laws and legislations which
increases brand image and reputation of company in front of customer at marketplace. On the
other hand, the change in these laws rapidly that adversely affect operations and activities of
business organisation in an effective manner.