Impact of Global Business Environment on Tesco: A Case Study

This report explores the impact of the global business environment on Tesco, a British multinational company. It covers internal and external factors, key drivers of change, and their impact on HRM, Marketing, Finance, Operations, and R&D. The report also includes a SWOT analysis of Tesco.

global business environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Internal and external factors within business environment and key Drivers of change..............3
Ways in which key driver impact on HRM, Marketing, Finance, operation and R&D..............5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The global business environment can be defined as the environment within the different
resign or countries that directly affect to the companies operation and their business strategies.
Some of the internal and external forces impact on company so it is necessary for the business to
be aware of those forces.
This report will cover case study of Tesco plc which is British multinational company
who are operating their business in more than 6500 location globally. It is second largest
company in terms of collecting gross revenue every year, and they are selling products such as
grocery, financial services, assessors etc.
MAIN BODY
Internal and external factors within business environment and key Drivers of change
There are some internal and external factors within the business environment that has
huge impact on the strategies and operations of the Tesco company (Amankwah-Amoah., 2016).
It is necessary for the Tesco company leaders to be aware of those factors, so they can identify
the negative factors and convert them, into the opportunities for the Tesco.
SWOT Analysis
Strength
 This company has won many awards for their retail business, customer care services and
overall shopping experiences by the customers.
 Tesco has various store formats that appeal to the local culture of the country which
create positive impact on customers.
 Company is known for providing quality services and products in lower prices which is
helping them to grow and creating strength for them.
 Decreasing the prices of raw material is creating postpositive impact on the Tesco
company because company can add some value for their customers, and they can provide
product and services in lower prices.
 Tesco is having all the legal licence to operate their business global, and they are paying
all the taxes and tariffs by the other countries.
Weakness
 product sell by the Tesco are costly for the customers during the Covid Crises so
customers prefer to by from the cheap stores.

 Tesco was mostly depended on the European countries but after the Brexit, they has seen
decrease in their revenue.
 Value chain management of the Tesco is weak And most of the time their products Are
not available on their stores. On the other side technology used at the workplace of Tesco company is old and other
companies can take competitive advantages if they adopt new technology. It is Necessary
for the leaders of Tesco to Understand the importance of technology.
Opportunities
 Online business can be good opportunity for the Tesco company and it can help them to
take competitive advantages (Hooper., 2016).
 There are opportunities for strategic alliances with other brands and admired companies
to offer more products or attract more consumers in certain target markets.
 Expansion of business within Emerging economies like China, Indonesia, Brazil can be a
good opportunity for the Tesco to expand their business and take competitive advantages.
 Environmental factors can also be Key drivers of the change for the Tesco because
support and encourage their customers toward the environment can help them top create
good reputation within the market. They should work toward the environment and also
encourage people to give their support as well. Tesco company also sell some other brands product within the United Kingdom for the
Jewish Customers, The rising a demand in the specific type of the food and chicken and
meat and demand for the Vegetarian vegan foods and drinks are also rising very high in
the European markets that offer Tesco good opportunities for further growth.
Threat
 Increase in the composition is creating threat for the Tesco company and this pressure is
leading the companies including Tesco toward the price war.
 Christmas ad controversy- Tesco faced social media black lash when the launch at
Christmas add in 2017. people started by cutting their product and stores claiming that
they are showing disrespectful act against Christmas faith.
 Covid 19 which is not affect the companies but it also affect on the salaries of the people
and many people lose their jobs. Due to the lower wages and salaries most of the Tesco
customers shifted to the cheaper brand

Ways in which key driver impact on HRM, Marketing, Finance, operation and R&D
Key drivers of Change
Key drivers within the business environment has huge impact as mentioned above but not only
impact on the companies strategies but also impact ion the marketing, HRM, Finance and R&D.
Marketing
Social factors and Change in demand of the customs impact on the marketing function of
Tesco because Marketer are responsible to identify needs and demand of the customers and
provide Information to production department. It is necessary for the marketers of Tesco to be
aware of change in customer demand and needs. It is helpful for the Tesco production
Department because they can use the information to develop new product and services for the
customers.
HRM
Human resource management is responsible to create polices and political changes affect
the companies polices where Hrm have to bring changes in polices accordingly (Kasemsap.,
2016). It is necessary for the HR manager to be aware of new policies of the government.
Operations
Implementation of new technology within the workplace of Tesco affect von the
operational department and help them to increase production and operation team can work more
effectively. economical change like increasing prices of raw material can also affect companies
operations. It increase the product prices and also affect the operational Department of the Tesco
company.
Finance
It is necessary for the finance manager of the company to ensure the proper use of
financial resource otherwise it can directly affect on the companies' profitability. changes in
economical factors like increase in interest rate can create thread up on finance . and affect their
functions.
R&D
Shortage of the finance can affect the Research and Development department of the
Tesco company. It is necessary for the leaders and managers of the Tesco to ensure that research
and development Department of the company should have enough budget and resources to run
there functions. lack of finance can be region of financial crisis within the country.

CONCLUSION
This report has been covered PESTEL Analysis to identify factors that are creating
positive and negative impact on Tesco. it also has been find out key drivers of change and in the
end of this report has been concluded SWOT analysis to identify the strength and weakness of
the Tesco company.

REFERENCES
Books and journals
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new
perspective on the effects of e-waste. Technological Forecasting and Social Change.105.
pp.20-26.
Brenkert, G. G., 2019. Mind the gap! The challenges and limits of (Global) business
ethics. Journal of Business Ethics.155(4). pp.917-930.
Hooper, M. J., 2016. The global business handbook: The eight dimensions of international
management. CRC Press.
Kasemsap, K., 2016. The roles of lean and green supply chain management strategies in the
global business environments. In Designing and implementing global supply chain
management (pp. 152-173). IGI Global.