This assignment explores the global business environment and its impact on TESCO plc. It includes a SWOT analysis and discusses the influence of key drivers on the functional areas of the organization. Discover study material at Desklib.
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Global Business Environment
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Table of Contents INTRODUCTION...........................................................................................................................1 SWOT analysis..........................................................................................................................1 Impact of key drivers of business environment on firms functional areas.................................3 CONCLUSION...............................................................................................................................4 REFERENCES................................................................................................................................5 .........................................................................................................................................................5
INTRODUCTION Global business environment is mainly associated with uncontrollable and exogenous factors of an international market that have influence on decision making and other capabilities and operations of an organization(Stanković and Novaković, 2019). This part of assignment is based on TESCO plc which is a leading and well known British multinational retailer having its headquarter in England, UK. This assignment consists a SWOT analysis together with impact of key drivers on functional areas of a firm. SWOT analysis SWOT analysis is basically a matrix that provide information regarding the internal strengths and weakness of an organisation that makes it able to grab the opportunity and reduce the negative consequences of threat. TESCO is among one of the leading retailer which deals in groceries, F&F Clothing, and other associated items across various regions of world that includes UK, Europe, Asia, Ireland, Hungary, Thailand, etc(Andresen and Bergdolt, 2019). Following is the SWOT analysis of TESCO organization reflecting its internal capabilities and weakness together with the existing business opportunity and threats: StrengthsWeakness The biggest strength of TESCO is long standing history in UK which is the reason behind having a credibility and loyalty among customers and accounts for 28.1% of total market share of UK which makes it a leading retailer across the UK (Tesco SWOT Analysis 2019, 2019). StrongandwiderangeofProduct portfolioespeciallyintopdriving sectors that includesgroceries, clothing, electronics, furniture etc. enhance its capabilities. TESCOisalsoamongoneofthe Failed operations and business project in US and Japanese market thus, have to close many stores and faced a lot of loss in these markets. AftertheBrexitreferendumthe TESCO is facing a worst performance thathasleadtoreductioninits operating profit by 9% after 2018. Brexit issues has also lead to a decline in share price of TESCO which are at below peak in October 2019. Maximumamountofspendingsare made in markets of UK and Europe which hinder performance of TESCO at 1
largestandmostprofitable supermarkets of world and also having a strong financial positions which is reflected through its listing on London Stock exchange and FTSE index. Beside this, use of superior technology like RFID – enabled barcode system and other new and advance packaging techniquesprovideauniqueand differentiatedpositioninbusiness market together with enhancement in customers experience. Apart from this, the effective marketing strategy together with efficient online operationsarealsoastrengthof TESCO plc. otherdevelopingmarketthus,have limited presence in emerging counties as compared with other competitors. OpportunitiesThreats TESCOcangoforfurther diversificationinitsproductand strategies and have an opportunity of expansion of operations in many other sectorlikeTESCOBank(Özcan, 2019). TESCOishavinganopportunityto growitsbusinessandenhancedits position as a low cost rival thus, has announced the introduction of a Jacks a low cost rival to Aldi and Lidl. TESCO can purse international market expansion strategy to improve its global Its brand image get damaged due to manycommercialincomescandal, financialfraudsandinfringement controversies which has created a threat on loyalty on customers. After the Brexit issue a high level of currencyfluctuationisseenandthe valueofpoundisalsodiminishing whichiscausingathreatforprofit margin of TESCO. Globaleconomicenvironmentand insatiably in business environment is cresting a threaton overallbusiness 2
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presenceandexpandintooversea market through having effective online business and transaction together with more better marketing and promotional strategy with the help of digital and social media. operations and demand of products of TESCO. Impact of key drivers of business environment on firms functional areas Theheydriversofbusinessenvironmentincludesvariousfactorsassociatedwith political, economical, social, technological, legal and many other factors that create significant effects on functional units and operations of an organisation(Gawin and Marcinkowski, 2019). Following impacts are created by key factors of business environment on functional areas of TESCO: HRM function This functional area of TESCO is associated with the recruitment and procurement of talented and skilled employees for the performing various tasks and jobs within the organisation (Rao, 2019). It has been that the, Brexit issue is affecting labour supply and has created a high level of employees turnover thus negatively affecting the operations of TESCO. Therefore to meet theses consequences and to retain itstalented employees some effective HRM strategies should be adopted by TESCO. Beside this, increasing competition and chaining technology has also impacted the HRM policies of TESCO and more emphasis is provided to training and timely development programmes for employees to enhance their performance and sharpen their skills to face the competition and also makes adoption of new technology relative more easy. Marketing Function Marketing function of TESCO is having a responsibility of developing effective relation with customers together with better understanding of business environment and ongoing changes so that effective promotional strategy can be made to create an awareness about the product and brand in the target market with the aim of enhancing its customer base and global presence (Stanković and Novaković, 2019). The various existing opportunity in the market to have an expansion in emerging market of world has lead to an impact on marketing function of TESCO and effective policies and strategies are needed to have better interaction with its customers at 3
global level. Changes in Technology has created an impact and has enhanced the opportunity for marketing function of TESCO through facilitating use of social media, like Facebook, Instagram, twitter and other digital technology like online websites and digital advertisement to have better promotion of its product at developing and emerging markets. Effective marketing strategy also reduce the threat of high level of competition and yield a better market position for TESCO across the world. CONCLUSION On the basis of above assignment it can be concluded that use of SWOT analysis is made toevaluateandanalysistheinternalcapabilities,strengthsandweaknesstogetherwith knowledge about opportunity and threat. It has been also summarised that various key factors of a business environment exert significant affect on functional areas of an organisation. 4
REFERENCES Books and journals Andresen, M. and Bergdolt, F., 2019. Individual and job-related antecedents of a global mindset: Ananalysisofinternationalbusinesstravelers’characteristicsandexperiences abroad.The International Journal of Human Resource Management, pp.1-33. Gawin, B. and Marcinkowski, B., 2019. Making IT global–what facility management brings to the table?.Information Technology for Development.25(1). pp.151-169. Özcan, A., 2019. The Role of Human Resource Accounting in the Business Environment. InGlobal Perspectives on Human Capital-Intensive Firms(pp. 99-120). IGI Global. Rao, I., 2019. Competing values in Asian business: evidence from India and Dubai.Journal of Asia Business Studies.13(1). pp.97-107. Stanković, J. and Novaković, I., 2019. Impact of Local Self-Government Institutions on Creating aBusiness-FriendlyEnvironment:Multi-CriteriaAnalysis.InSocio-Economic Development: Concepts, Methodologies, Tools, and Applications(pp. 1466-1488). IGI Global. Online : TescoSWOTAnalysis2019.2019.[Online].AvailableThrough: <https://www.learnmarketing.net/SWOTTesco.html> 5