Global Business Environment: Internal and External Factors Impacting Growth

This report explores the internal and external factors that impact the growth and smooth operation of businesses in the global business environment. It discusses the importance of SWOT analysis, the role of different departments like marketing and human resources, and includes a case study on Tesco.

GLOBAL BUSINESS
ENVIRONMENT
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Executive summary
Global business environment has numerous changes so company have to accept external
changes in order to enjoy huge profitability. The report has included key information related to
internal and external factors of business that impact on growth and smooth operation of business.
There are different departments like Human resources, marketing that work effectively so that
end outcome can be achieved in minimum cost and time.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
PART- 2...........................................................................................................................................4
1. Internal environment................................................................................................................4
2. Core competency and capabilities...........................................................................................5
3. SWOT Analysis.......................................................................................................................5
4. Importance of SWOT..............................................................................................................5
5. TOWS......................................................................................................................................5
PART- 3...........................................................................................................................................6
Operation impact analysis............................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
Appendix......................................................................................................................................8
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INTRODUCTION
Global business environment is dynamic or ever changing in nature as several factors
keeps on changing like taste and preference of people, policies of government, economic
condition and technology. Company in order to grow and sustain its business in competitive
environment have to adapt its strategies as per recent changes. This report is about Tesco which
is one of the leading firms in retail sector of United Kingdom that offers products like clothes,
home care, personal care and financial services etc. It has covered information related to SWOT
and impact of operation on growth and success of enterprise.
PART- 2
1. Internal environment
Internal environment is composed of elements within organisation like culture,
management, employees, technology, goodwill, plan and policies and informational resources of
firm that can ability to influence overall decision making of firm (Internal Environment Factors,
2020).
Figure 1: Component of internal environment
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(Source: Internal Environment Factors, 2020)
2. Core competency and capabilities
Tesco core competency and capabilities lies in several areas like design of products,
innovative technology and research and development that helps in delivering extreme qualitative
services to customers.
Distinctive competencies and distinctive capabilities
Distinctive competencies are organisation qualities or strength or unique method of
business like resources, skills and technology that helps in fulfilling needs of maximum number
of customers.
3. SWOT Analysis
SWOT analysis is strategic planning tool that helps in understanding strength, weakness,
threat and opportunities of business that helps in gaining competitive advantages. SWOT stand
form strength, weakness, opportunities and threat. Like strength of Tesco is its qualitative
products, global market presences, maximum market share and revenue. On the other hand, their
weaknesses are limited global presences and use of fraudulent practices or misrepresentation of
profit of organisation. Threat is increasing competition level and every changing external
environment while opportunities are expansion into new market and more use of digital platform
to meet customers needs
4. Importance of SWOT
It can be stated that SWOT analysis is an effective model that helps in understand key
areas in which company have its strength and weakness. Thus manager can find appropriate
action to remove weakness and make best use of strength in order to utilise available
opportunities for growth of firm (Peng, 2016). SWOT is an tool that helps company in planning
in advance the way it can cope up with external environment of business i.e, threat and
opportunities in order to grow sales, market share and profitability.
5. TOWS
Strength Weakness
Opportunities  Like brand image is
strength of Tesco that
it can use to enter into
emerging market in
 Tesco by working on
its weakness that is
limited global
presences can easily
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order to earn more
profitability.
 It can also make use of
its existing products
range to meet needs of
new individuals.
grow and diversified
its business operation.
Threat  Company is facing
threat of increasing
competition so it can
make use of its
differentiate products
range to retained its
market share and
competitive
advantages (Gooris
and Peeters, 2016).
Brexit is also threat of Tesco
as it resulted in decrease in
overall sales volume of firm.
So company by expanding its
business operation in
international market can easily
remove threat of enterprise.
PART- 3
Operation impact analysis
Marketing department
1. It is department that is responsible for promoting products and services or brand image of
enterprise to number of customers so that firm can enjoy maximum sales and profitability.
Marketing department conduct market research in order to know existing taste and preferences of
customers and find best possible way they can be influence to select Tesco rather than other
competitors. Marketing department have make use of strength i.e, maximum market share and
brand image to add new and new customers within organisation. Marketing manager through
effective understanding needs and preferences of customers is able to build strength in terms of
qualitative products and services of firm (Tallman, Luo and Buckley, 2018). Through increase in
competition level, Tesco marketing manager strategies that is low price has become ineffective
that lead ASDA in taking competitive advantages. Weakness of marketing and sales of Tesco
lies that it is facing difficulty in changing strategies as changed in external environment. So,
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marketing manager needs to conduct proper market research in order to decide right course of
action that company can take to enjoy high profitability. Marketing strength of Tesco lies in its
strategies like firm have make use of low pricing strategies to retained differentiate position and
give tough competition to others. Therefore, marketing plays important roles in influencing or
creating awareness among customers why they should prefer it for satisfaction of their respective
needs.
Human resource department: It main function is to recruit, select, hire and retained or trained
employees so that they can put maximum efforts for growth and success of firm. It also manages
performance, reward, punish and ensure strong relationship between employees so that they are
motivated to work as team for common goals. Tesco is able to get maximum market share due to
hard efforts made by employees to deliver services that are beyond their expectancy. Strong
brand image and reputation have motivated maximum individuals or employees to work for
benefits of organisation. HR has played important role in managing highly talented and
knowledgeable employees within firm thus able to helps in expansion of organisation (Nayak
and Mohanty, 2017). HR manager by making use of strength of company have motivated
employees to adapt to external changes so that Tesco can easily sustain in retail industry of UK.
HR through organising several training and development program can enhance knowledge and
skills of employees regarding the way different individuals can be managed thus grow business
in global environment. Firm by making use of different motivational techniques can influence
individuals to adapt external changes so that negative impact of increase competition can be
reduced or minimised.
CONCLUSION
It can be concluded from above research that SWOT is tool that helps company to
overcome its weakness and make best use of its strength to take competitive advantages. At last
it can also be summarised that internal and external factors have directly or indirectly impact on
several operation of business.
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REFERENCES
Books and journals
Gooris, J. and Peeters, C., 2016. Fragmenting global business processes: A protection for
proprietary information. Journal of International Business Studies, 47(5). pp.535-562.
Nayak, S. and Mohanty, V., 2017. Green HRM for business sustainability. Indian Journal of
Scientific Research, pp.102-106.
Peng, M. W., 2016. Global business. Cengage learning.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
Strategy Journal, 8(4). pp.517-535.
Online
Internal Environment Factors, 2020, [Online]. Available
Through:<https://www.marketingstudyguide.com/internal-environment-factors/ >.
Appendix
Strength
1. Strong brand image
2. Wide product portfolio
3. Efficient network of supply
4. Largest private employers
5. Highest market share
6. Multiple award holder
7. Diversified retail stores
8. Effective marketing strategies
Weakness
1. More dependence on UK
2. Use of fraudulent practices
3. Failure in japan and US
4. Sudden club card switching
5. Less operational profit
6. Low-cost technique
7. Financial errors
8. Lack of innovation
Opportunities
1. Online stores
2. Expanding operation into
Threat
1. Increase competition
2. Changing taste and preferences of
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emerging market
3. Jack Stores
4. Joint venture
5. Alliance with other companies
6. Digital marketing
7. Launch of new product
8. Sustainability management
9. Diversify its business operation
10. Use of innovative technology
people
3. Brexit
4. Impact of covid-19
5. Development in technology
6. Economic crises
7. Fake Farm
8. Christmas scandal
9. Changes in policies of government
10. Legal liabilities
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