Business Strategy: Macro and Micro Environmental Factors

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P 1. Macro environmental factors................................................................................................3
M1 Critically analyses macro environment.................................................................................5
P 2. Micro environment ..............................................................................................................6
M2 Critically analyses internal factors........................................................................................8
P 3. Porter's Five Forces..............................................................................................................9
M3 Critically analyse.................................................................................................................10
P 4. strategic management plan.................................................................................................11
M4 strategic plan........................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy refers to the effective actions and practices which are used by business
to attract large number of customers which increases the sales and profits of business. This cans
help to increase the performance level and attain the goals and objectives of company. Business
strategy can explain that how business can reach company's specific goals and objectives. This
report explains different business strategies of Tesco which is the third largest retail company of
world. Its headquarter is located in the England, UK. This report describes macro environment
factors and their impact on the business operation of Tesco. There is analysis and evaluation of
internal environment which determine how these factors affect the strategies of business.
Company conducts porters five forces which helps to gain the advantages of competition in
different markets of world. In this report, there is a determination of strategic management plan
which helps to gain success and growth of company. Strategic management plan will help the
business to expand the business and increases the profits and sales of company.
TASK 1
Macro environmental factors
Macro environmental factors are defined as the factor which does not have any control over them
by organisation. Macro environmental factor can be defined as external factor which gives
impact on organisation performance and their operations. It includes GDP, inflation rate, and
employment, monetary and fiscal policy. There is a specific framework to understand external
factors i.e. Pestle analysis. Pestle analysis is a tool which analyses and monitors external factors
i.e. political, economic, socio-cultural, environmental, legal and technological factors. Tesco
applies pestle analysis for understanding impact of external factor on the company.
Political factors: Tesco is a British multinational company of the UK which is famous as
general merchandize retailer. The political factors include tax policy, labour law, trade
restrictions, tariffs, political stability, trade restriction etc. Tesco gets positive impact by political
stability because Tesco doesn't have to change their policies during trading products. It improves
working efficiency of the employees in the company. Second organization doesn't have to pay
high taxes during trading of products that leads economic benefits in the company (Cubas‐Díaz
and Martinez Sedano, 2018).

Economic factors: it includes foreign exchange rates, interest rates, unemployment law,
market conditions etc. are major economic factors. Economical factor of UK also gives impact
on organization. For example, when inflation rate becomes higher in UK market, then it gives
golden opportunity for Tesco to sell retails groceries on affordable price. Due to high inflation
rate, organization improves customers purchasing behaviours by offering required groceries. It
will help organisation to achieve high profits and competitive advantage. However, it can also
have negative impact on performance of the organisation.
Socio-cultural factors: Demographical changes, population density and lifestyle,
feelings, quality of living and trends are social factor. It gives positive and negative impact on
organization. For example, people in UK are health conscious therefore they require organic
groceries that leads positive impact on their health. Thus by focusing on this factor Tesco can
improve the range of products and can build new customer segments. Second organization
improves their purchasing power by offering varieties of the products like food-item, non-food
item. Thus, Tesco enhances demand of the products by the customers. On the other hand, it the
life style trends and feelings of people towards.
Technological factors: New emerging technologies like RFID, E-commerce, online
delivery etc. are current technologies which is famous in the UK. Tesco gets positive impact of
the new technologies. For example, RFID is the new technology which is adopted by Tesco. It is
effective technology because organisation can measure quantity of products which has sold and
other resting products which are remained (Anwar and Hasnu, 2016). It saves the time of
employees and improves their working efficiency during selling of the products to customer. At
the same time online shopping also helps organisation to sell their high quantity products to
customer. For example, organisation offers home online delivery services to customers. Even
customers also get opportunity to buy products low price rather than wasting time to go on store
and buy products. Tesco offers online payments services like Tesco payment app, mobile app
etc. to customer, so that large number of customers purchase large quantity products.
Environmental factors: Pollution, governmental law etc. are environmental factors of
the UK. Organisation gets impact by the environmental factors. For example, due to these
regulations Tesco offers sustainable products and follow effective waste management practices
which are promoted by the government. It alleviates public health and helps organisation to
build trust of the customers on organisation. It is also helpful in enhancing brand awareness and