Global Business Environment

This report explores the global business environment and its impact on the performance of businesses. It focuses on Tesco and discusses the use of PESTLE analysis to identify key factors that influence the organization's performance. The report covers political, economic, social, technological, legal, and environmental factors.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PESTLE Analysis........................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCE...................................................................................................................................5

INTRODUCTION
Business environment is the combination of all internal and external factors that helps in
controlling the productivity and performance of the business. Tesco is taken as the base company
and it specialises in selling of groceries and merchandise retail. It was found by Jack Cohen in
1919. In context to Tesco, this report covers PESTLE analysis which is used by the firm for
identifying the factors that affects its performance and they are mentioned below-
PESTLE Analysis
PESTLE analysis is a tool which is used to identify the macro-environmental factors that impact
the organisation's performance (Liu and Yang, 2019). In reference to Tesco, they use PESTLE
analysis to identify the factors that influence them and the key drivers of change that
deliberations for the future direction is mentioned below-
 Political factors: These are the political factors that affects the business such as
government policy, political stability, corruption and many more. Tesco can get affect by
the import duty on goods as they import inventory outside UK. Local council proposed
Tesco tax which was refused by the government because of price hike. In future, it can
affect Tesco negatively if any tax law are implemented on them.
 Economic factors: These factors are the determinants of economy's performance which
include factors such as economic growth, inflation rates, interest rate and so on (Morales,
Sosa-Fey and Farias, 2017). The economy of UK regulations can affects the price of the
commodities of Tesco. The sale of products decreases if price of commodities increases
which affects the profitability of the firm.
 Social factor: These factors are important as it helps in targeting the customers and it
include factors such as culture, demographics, attitude and many more. Keeping in mind
of belief and values, Tesco offers halal meat for their Muslim customers and also
manufacture their own labelled halal meat. Tesco has the opportunity for further growth
as the demand of vegan and vegetarian food and beverages are high in European market.

 Technological factors: These factors are the technological innovations and
developments that affects the market (Saleh and Watson, 2017). Tesco has launched “scan
as you shop” checkpoints which enables customers to shop and tag products. They are
looking to introduce more innovation for future growth of the firm.
 Legal factors: These are the factors that create impact on the business operation. In
includes factors such as consumer law, health and safety, employment legislation and
many more. Tesco should follow all the local and foreign law for smooth functions and
operations.
 Environment factors: These factors influences the surrounding environment and its
impact (Singh and Agrawal, 2017). It include factors such as climate, carbon footprint,
sustainability and so on. Tesco encourages their customers to shop online from their
websites which helps transportation using fuel saving routes and also pick plastic bags
from the customers to recycle them. They are also working to use renewable sources and
generate 100% electricity by 2030.
CONCLUSION
From the above discussion, it can be concluded that business environment helps in
improving performance of the firm. In this report, it include PESTLE analysis which helps in
identifying the key factors that influence the organisation's productivity and their deliberations
for the future directions of the organisation.

REFERENCE
Book & journals
Liu, H. M. and Yang, H. F., 2019. Managing network resource and organizational capabilities to create
competitive advantage for SMEs in a volatile environment. Journal of Small Business
Management, 57, pp.155-171.
Morales, K., Sosa-Fey, J. and Farias, J., 2017. Social media: are the benefits worth the risks for
business?. International Journal of Business & Public Administration, 14(1).
Saleh, A. and Watson, R., 2017. Business excellence in a volatile, uncertain, complex and ambiguous
environment (BEVUCA). The TQM Journal.
Singh, V. and Agrawal, A., 2017. Impact of business environment on balancing innovation process in
Indian SMEs. International Journal of Business Innovation and Research, 12(2), pp.224-239.