Global Business Environment

This report explores the global business environment and its impact on decision making. It focuses on the PESTLE analysis of Tesco, a multinational British company, to identify its influencing factors.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
PESTLE analysis.........................................................................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
The global business environment refers to the environment of different countries where
the company operates. The factors of global environment are exogenous to home country's
environment which influences its decision making on use of resources and capabilities
(Bedianashvili, 2016). The organisation chosen for this report is Tesco, a multinational British
company dealing in groceries and retail of general merchandise. This report shall cover the
PESTLE analysis of the organisation to identify its influencing factors to make future decisions.
TASK 1
PESTLE analysis
Tesco is a leading market leader of supermarket industry in UK. PESTLE analysis is a
tool which helps in analysing the external factors of the company. There are six factors which
affect the organisation's decision making. The following factors are-
 Political- This factor refers to the influence of government on the company. Tesco
operates globally all over the world. Its home country is UK whose political environment
is stable. But there are many countries whose political stability is a question which makes
the operation of the company difficult. The political instability may lead to fluctuating tax
rates, impact on global trading, etc. which can affect the working of the company.
 Economical- It refers to the performance of economy in which the company operates. As
Tesco operates worldwide and the world is already affected by the pandemic of Covid-19
due to which the purchasing power of the people has declined. This may affect the
earnings of the company in many parts of the world where it functions. This recession has
affected the company's profit.
 Social- It refers to the general environment within which the factors like customs, values,
demographic characteristics affects the organisation. Tesco works towards taking
initiative to accept the changing demands and needs of the people. It introduces products
according to the demand prevailing in the market which helps the company to capture
larger market share. This opens the scope for the company to grab opportunities for the
further growth (Wei, Thurasamy and Popa, 2018).
 Technological- It refers to the factors which pertain to innovations which may affect the
working of the company. Tesco is a successful global company due to its timely

adaptation of new technologies. This helps in giving convenient service to the customers.
For instance the organisation introduced a loyalty card for customers which contributed
to the success of the company.
 Environmental- It refers to the factors which include environmental and ecological
aspects which may affect the companies. Tesco has taken several initiatives to address the
issues of environment so that it can build a environmental friendly organisation for the
people. For instance, the company has promised to remove the plastic packaging by the
end of 2020.
 Legal- It refers to the rules, regulations and laws which regulate the business. Every
country has different rules and laws which affect the global organisation like Tesco. The
company has to comply with every country's law to make sure it runs smoothly. It has to
comply with employment law, contract law, competition law so that no legal
consequences are faced by it (Xie and Redding, 2018).
CONCLUSION
It is concluded from the above report that Tesco operates at global level which is affected
by the macro environment of the world which affects its operations. PESTLE analysis helped to
analyse the external factors within which the company is operating so that it can take future
decisions easily.

REFERENCES
Books and Journals
Bedianashvili, G., 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
Business.
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
Global Business Services industry. Management Decision.
Xie, E. and Redding, K.S., 2018. State-owned enterprises in the contemporary global business
scenario: introduction. International Journal of Public Sector Management.