Global Business Environment: SWOT Analysis and Impact on Tesco Functional Areas

This report discusses the global business environment and its impact on Tesco's functional areas. It includes a SWOT analysis and explores the effects of key drivers on marketing and HRM.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
SWOT Analysis .........................................................................................................................1
Impact of key drivers on Tesco functional areas .......................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment encompasses the role of internal and external factors based
on which an organisation need to utilises their resources and capabilities in order to make the
viable decision. As the existence of uncontrollable and unavoidable factors can hamper the
business operations so the better classification of market condition helps to maintain the
favourable conditions. To better define the global environment topic Tesco company has been
selected which is the multinational retailer and has strong chain of physical store. They deals in
wide varieties of the necessity products, grocery item, electronics, furniture and so on. This
report cover topic like preparation of Pestle and SWOT analysis. Based on which the impact on
diverse functional area like Marketing and Human resource management are covered in the
report.
MAIN BODY
SWOT Analysis
SWOT analysis is the internal framework that can assist Tesco company to anticipate its
strength and weakness based on which it can gain core competency. Further, it helps to exploit
the untapped or uncovered opportunity by mitigating the chances of threat gained from the
existence of competitive rivalry.
Strength
 Tesco has the strong position in terms
of retail store because it has
successfully build the competitive
position by offering viable and
excellent shopping experience to
customer where they can find wide
varieties of alternative under one roof.
 The advantage of the economies of
scale helps the company to offer high
discounts on the commodities. Further,
the result of high footfall helps the
manager to invest in latest technology
Opportunity
 Optimum presence of company in the
digital media act as an opportunity
because the dependence on the e-
commercial and online shopping sites
are constantly increasing. So in the
upcoming duration the customer will
remain more keen to explore such sites
and leverage the advantage of home
delivery of items (Tukundane and et.al.,
2015).
 Further, the company can focus to
widespread their operations in the
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to build better serving experience.
 It maintain the strong relation with its
supplier that assist company to
maintain the adequate reserve of
inventories and possible gain quality
product at reasonable prices.
developing market because there exist
numerous opportunity in terms to
establish the image and access the
advantage to gain additional revenue.
Weakness
 To overcome the competitive pressure
the company need to indulge into the
price wars that erode the expected
amount of profit margin.
 Other then UK, there are certain outlets
that are not equally contributing in
terms to mange the profitability. So the
inadequate investment in market
research can further disturb the success
of company in terms of portfolio
investment (Odeh, Warwick and
Garcia, 2015).
Threat
 Changing economic condition such as
recession or inflation threaten the
profitability as well as market share of
company because it affect the buying
pattern of consumer.
 Strong existence of both domestic and
global rivalries affect the market
operations and network of company
because Tesco needs to implement the
strategy to wipe out its the competitive
pressure.
 Constant change in the food prices
again affect the expected revenue
generation because the disposable
income of consumer is constant.
Henceforth, with the application of SWOT analysis, it aid Tesco to determine its
capability and also to identify the weakness which impact over its overall performance. Along
with this, SWOT analysis also enable Tesco to implement best strategic decision which lead
them to gain competitive advantage and also top create positive response among targeted
audience in an amended mode.
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Impact of key drivers on Tesco functional areas
Every organisation are categorised into different functional unit and each of them are
differ from each other in aspect of responsibilities, function and roles. However, all these
functional areas of establishment are empowered to achieve common goal in an effective and
expeditious manner. In regard of Tesco, the industry where it operates its business service is
highly competitive and challenging which directly impact over is potentiality in placing the
brand in an aggressive and competent position among competitor (Aguilera and Crespi, 2016).
On the basis of above explained content, it has been identified some internals and external
factors of business environment that influences Tesco's working culture and also over the
contribution of each functional unit towards an attainment of sustainable growth are explained
below:
Marketing: Under this business function of organisation , it is concern with promoting
the company's product and services as well as driving firm to provide increased level of customer
satisfaction in an improved manner. However, with the introduction of Brexit within UK it
effected negatively over firm's overall productivity ratio as it entirely modified the Tesco's
existing policies or procedures. Due to which, Tesco faced an issue in import or export goods,
maintaining fair practices in advertising the product, targetting suitable population for the
consumption of product and many more. However, being a global presence Tesco can make use
of different traditional and online marketing method such as direct selling, billboards, socila
media platfiorms, it enable Tesco to improve the overall sales performance in an impressive and
innovative style (Tameme, Hadi and Hameed, 2015).
HRM: In this functional area of company, it is relate with hiring suitable candidates and
placing them in a right position as per their interest or capability. However, to this context,
Tesco faced a lack of manpower with the implication of Brexit inside UK as major number of
population are migrating from UK. Due to which it impact organisation capability to earn
maximum level of profit margin ratio within prescribed time duration. On the other hand, the
employment rate of UK is high which can benefit Tesco to retain its existing employees and also
in capturing the attention of large number of new manpower towards the brand in an improved
manner. With the help of such initiation, it lead Tesco to gain competitive advantage inside UK
industry and also can enlarge market division in a positive way without any hindrances.
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From the preceding discussed content, it has been signified that Tesco has several
capabilities and weakness which empower organisation to deal with all current or emerging
market competition in an amended mode (Cadle, Paul and Turner, 2014).
CONCLUSION
It has been summarised from the above explained report that every establishment has
threat from internal and external business environment that effect organisation potentiality to
accomplish its pre determined goal in an improved manner. Along with this, with the application
of PESTLE and SWOT analysis, it assist company to identify its strength in order to take
corrective course of action with an aim of acquiring best position inside industry as well as to
attain sustainability among rivalries in an amended manner.
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REFERENCES
Books and Journals
Aguilera, R. V. and Crespi, R., 2016. Global corporate governance: On the relevance of firms’
ownership structure. Journal of World Business. 51(1). pp.50-57.
Cadle, J., Paul, D. and Turner, P., 2014. Business analysis techniques. ChartereOdeh, M.,
Warwick, K. and Garcia A., 2015.Tukundane, C and et.al., 2015.d Institute for IT.
Dilek, S. and Keskingöz, H., 2016. SWOT Analysis of Safranbolu City in Terms of Tourism.
International Journal of Research in Business and Social Science (2147-4478). 5(1).
pp.54-64.
Kremer, P. D. and Symmons, M. A., 2015. Mass timber construction as an alternative to
concrete and steel in the Australia building industry: a PESTEL evaluation of the
potential. International Wood Products Journal. 6(3). pp.138-147.
Ng, E. S. and Bloemraad, I., 2015. A SWOT analysis of multiculturalism in Canada, Europe,
Mauritius, and South Korea.
Odeh, M., Warwick, K. and Garcia A., 2015. The impacts of cloud computing adoption at
Higher Education institutions: a SWOT analysis. International Journal of Computer
Applications. 127(4). pp.15-21.
Tameme, H. J., Hadi, M. Y. and Hameed, I. H., 2015. Phytochemical analysis of Urtica dioica
leaves by fourier-transform infrared spectroscopy and gas chromatography-mass
spectrometry. Journal of Pharmacognosy and Phytotherapy. 7(10). pp.238-252.
Tukundane, C and et.al., 2015. Building vocational skills for marginalised youth in Uganda: A
SWOT analysis of four training programmes. International Journal of Educational
Development. 40. pp.134-144.
Online
SWOT Analysis of Tesco. 2019. [Online]. Available through:<https://bstrategyhub.com/tesco-
swot-analysis-2019swot-analysis-of-tesco/>
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