Business Environment Analysis of Tesco

This report analyzes the business environment of Tesco, a leading multinational grocery company, by examining both the micro-environment (using SWOT analysis) and the macro-environment (using PESTLE analysis). It also explores ethical issues in the business environment and their importance for both individuals and organizations.

Environmental factors, Micro-environment, macro
environment, impact to influences of factors on the
business environment or challenges in the business

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Micro Environment factor...........................................................................................................1
Macro environmental factor........................................................................................................2
Change the modern business in global environment...................................................................3
Ethical issue in the business environment...................................................................................3
Importance of ethical issues.........................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business environment helps to analyse the external or internal environment of the business.
Environment factor includes the two types of factor micro or macro environment. Macro
environment is analysed the whole economy. And micro environment is help to identify the
business strength or weakness. And ethics in business is defined the business rules and
regulations which is followed by the individual and organization. In this report for better
understanding of business environment, Tesco limited is taken. Tesco is British multinational
grocery company that provide the retail service to the customer (Aithal, 2017). The report will
highlight the micro environment that identify the strength and weakness of company by the swot
analysis and Also, highlight the macro environment which identify the external environment of
company by the pestle analysis. Report will lay about the global environment that affect the
company. Also explain the ethical issues in business environment.
MAIN BODY
Micro Environment factor
Micro environmental factor is help to identify the strength or weakness of company
Through SWOT analysis. SWOT analysis is stand for strength, weakness, opportunity, threat. In
this factor company analysis the market conditions according to the business capabilities and
identify swot analysis for the future planning of company.
SWOT Analysis
The swot analysis is the Tesco group. The company is offer the food and non food items
in all over the world. Swot analysis is help to company for analysing the market and increase the
competitive advantage by male the strategic planning (Perloff, 2015).
Strength
 Tesco provide the varieties of product in all over the world which helm them to retain the
number one position supermarket in UK.
 Tesco have a good market shares due the consumer loyalty.
 Tesco have a many stores in all over the world. Now they have 69961 stores in the
world.
Weakness
 Tesco have many stores but some stores are not operating well. For example Tesco had
close the stores in japan and American markets in 2012 due to some issues.
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 Tesco face the financial liabilities they cannot pay their debts. So the burden of debts
and credit cards liabilities are affect the Tesco financial profits.
Opportunity
 Tesco have an opportunity to expand their market in online platform they provide the
online shopping as well as home delivery to their customers.
 There is an opportunity to rebuild their stores through joint venture.
Threat
 Increase the threat of labour. Further also increase the cost of wages that affect the
company pricing strategy (Aithal, 2017).
Macro environmental factor
This factor is help to analysis the whole economy by using the pestle analysis.
Pestle analysis
Political factor
Positive impact Tesco is give the charity to the political party so they influence the
government for reducing the tax. Negative impact due to increase the debt liabilities is affect the
financial position of the company.
Economical factor
In 2009 Tesco generate the profit Because of the financial crises. This is big example of
all over the world because company survive in this condition which is created the positive
impact. Negative impact In 2012 Tesco face the losses because in uk rising unemployment
affect the company So customer cannot purchase the product (Perloff, 2015).
Social factor
Positive impact Tesco have variety of product so customer are satisfied with their
products.
Negative impact now these days' customer are aware for their health and they want
health products. So changes of preference is affect the company positing in the market.
Technological factor
Tesco is use the online platform to increase their market that create a positive impact of
the company. Firm has investing huge amount in technology that generate high expenses and
create negative impact.
Environmental factor
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Tesco is give the employment of young people that creates positive environment friendly
attitude. Company take initiatives for environmental help but it is increases the cost of the
company.
Legal factor
Tesco does not provide the legal service to their employee for online shopping that creates
a negative impact. Positive impact Tesco provide the discount on the grocery items to the
customer they legally announced so that help to increase the customer loyalty.
Change the modern business in global environment
Tesco is take initiative for help the environment. They address the issue and adopt the new
strategy to protect the environment. Tesco has found that the shopping bags which harms the
environment that especially affect the birds and fish. So they immediately change the shopping
bags and making good for environmental friendly. Tesco also help to reducing the 50 % carbon
footprint that creates a positive impact on the company.
Ethical issue in the business environment
 Fundamental ethical issues
Fundamental ethical issues is defined the high level of trust between company and customers.
Means company should focus on the customer needs. Tesco is provided the varieties of product
to their customer for satisfy the customer needs. This is help to company for the success.
 Decision making issues
This method is very useful because it is help to identify the decisions related the business. It is
included the collecting of data, analyse the data and implemented which help to making a
decision (Indris, and Primiana, 2015). Tesco is followed this method to protect the employee and
customer rights and also make sure that individual or customer needs are fulfilled and their belief
and values are also protected.
 Diversity and the respectful work force
This method is very important to the company because employee fill good with their work so
they can produce more. Tesco is provided the benefits to their worker, provide the equal
opportunity, provided training, promotions, medical facilities, education facility etc. (Chernyaev,
2017).
Importance of ethical issues
For individual
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 help to increase the self confident increase the morale for giving the best on work place and enhance their living standard
For organization
 Help to increase the sale or profit by attracting the customer to fulfil their needs.
 Attract the employee by providing the opportunity that help to company for reduce the
cost of recruitment. And increase the pool of talent.
 Protecting the business for takeover through increase the market share and attract the
investor to investing in the company.
CONCLUSION
This report is concluded about the business environment of Tesco limited. The report was
started by defining the macro environment through pestle analysis. Then also defined the micro
environment through swot analysis. Then comes the ethical issues which was explained the
different methods that affect the business and also explain the importance of ethical issues for the
individual as well as company. The report was also concluded the changes of business by the
global environment.
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REFERENCES
Aithal, P.S. 2017. A critical study on Various Frameworks used to analyse International Business
and its Environment. International Journal of Applied Engineering and Management
Letters (IJAEML). 1(2). pp.78-97.
Chernyaev, M.V. 2017. Analysis of sustainable development factors in fuel and energy industry
and conditions for achievement energy efficiency and energy security.
Flouris, T.G. and Oswald, S.L. 2016. Designing and executing strategy in aviation management.
Routledge.
Indris, S. and Primiana, I. 2015. Internal and external environment analysis on the performance
of small and medium industries (SMEs) in Indonesia. International journal of scientific
& technology research. 4(4).pp.188-198.
Perloff, H.S. 2015. The quality of the urban environment: essays on" new resources" in an urban
age. Routledge.
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