Global Business Environment

This report explores the global business environment and its impact on Tesco. It covers SWOT and PEST analysis, as well as Porter's five force model. Learn how these factors affect business operations and decision making.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Global business environment is described as distinguish external factor which surround
the company and impact it's operational and decision making process. Top level management of
the company study external factors in order to frame tactics to overcome them. This report is
based on Tesco which is a leading grocery retail store serving it's goods across the globe. It is
suited in Welwyn Garden City UK. This assignment covers SWOT and PEST analysis in order
to grow the business in cut throat competitive world. Porter's five model is studied in order better
understand the degree of power in each stage (Fabus, 2018).
MAIN BODY
SWOT analysis is conducted by Tesco in order to understand the strengths and weakness
of the business. As well as to grab the opportunities prevailing in the intense competitive world.
SWOT helps top ascertain threats which may affect business operation in the up-coming years.
The SWOT analysis of Tesco are explained below:
Strengths Weaknesses
 Tesco has captured huge market ratio in
the global market.
 The stores appeal to local and cultural
needs.
 Inventory is high compare to the
competitors.
 Not successful at integrating company
with various work culture.
Opportunity Threats
 Economic gradation raises consumers
spending on goods.
 Less supply of creative goods in the
market.
PEST analysis is done to understand the external environment and their impact on the
firm. The explantation of this is explained as beneath:
Political factor: UK has stable political conditions due to which this is the best place to
expand the business.
Economical factor: Interest rates, inflation rate etc. affect the business because Tesco
need to change the policies and regulations as per the economic conditions.
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Social factor: A large ratio of profit is contributed in the growth and development of the
society so that their living standard raises (Hamilton and Webster, 2018) .
Technological factor: 3D technology is adopted by Tesco in order to meet the emerging
needs of the customers.
Porter's five force model is framework through which firm's competitive environment can be
examined. The points are discussed below:
Bargaining power of customers: The power of customer is high when they are large
number of buyers for the product. As well as the switching cost does not incur high costs.
Bargaining power of suppliers: The power of high when there is less suppliers available
in the market. They charge more prices for the goods as suppliers are less in number.
Threat to new entrants: Firm financially stable has less threat for entrants they can
easily cope with the challenges prevailing in the market.
Threats to substitutes: Those products has high degree of threats when they have more
substitutes present in the market (Tallman and Buckley, 2018).
CONCLUSION
From the above it can be concluded that Swot and pest analysis should be conducted by
firm in order to better understand the external environment demand. By successfully conducting
this aspects in the market business can easily grow and develop in the market. Porter's five force
model is deeply studied in order to gain competitive advantages against rivalry in cut throat
competitive world.
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REFERENCES
Books and Journals
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE STUDY
SLOVAKIA. Journal of Security & Sustainability Issues. 7(4).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Tallman, S., Luo, Y. and Buckley, P. J., 2018. Business models in global competition. Global
Strategy Journal.8(4). pp.517-535.
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