Global Business Environment

This report discusses the global business environment and its impact on Tesco through SWOT analysis. It explores the strengths, weaknesses, opportunities, and threats faced by the company. The report also examines the impact of key drivers on functional areas and discusses the opportunities and threats faced by Tesco. The report concludes with recommendations for addressing these challenges.

Global Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAINBODY ...................................................................................................................................3
SWOT analysis............................................................................................................................3
Impacts of Key drivers of SWOT analysis on functional areas..................................................5
CONCLUSION ...............................................................................................................................6
REFERENCE...................................................................................................................................7

INTRODUCTION
The term “global business environment” refers to all internal and external factors which
have potential to influence the function or operation of that company which run their business at
international level (Cherunilam, 2020). In order to understand the impact of all these macro and
micro factors on business, an organisation is selected which is Tesco. It is a multinational retailer
firm which deals with grocery products. The following report consist the discussion about
SWOT analysis and the impact of key drivers of PESTLE on functional areas of company.
MAINBODY
SWOT analysis
SWOT analysis is a framework that is used by company for the determination of internal
strength and weakness along with external opportunity and threat. After analysis company will
able to make effective strategies that aids them to attaining their goal in effective manner.
Analysis of SWOT in context of Tesco company is underneath:
Strength
 The biggest strength of Tesco company is that, it captured entire British market of UK in
real sense related to revenue. In year 2018-2019 the annual revenue of this firm was
around 63,911 million pounds in both UK and Ireland due to this annual profit was raised
by 11 % approximate (Amponsah and Ahmed, 2017).
 Tesco have the highest market shares in UK along with Ireland due to their leadenness in
supermarket and grocery retail store. The shares that they holds is about 27 %.

 The performance of Tesco is not limited with their fans and statistics but also won so
many awards such as British Favourite supermarket, grocer label award, drink etc.
 Diversified in various nations around 14 countries throughout the Europe and Asia where
it has the strongest market as well as approximately 6800 stores of retail and supermarket
across globally (Adekola and Sergi, 2016).
Weakness
 Along with huge success this company faces a failure in the US and Japanese market due
to this they wind up their business stores of UK and Japan as they could not be able to
exports operations and execute its plan effectively offshore.
 The Brexit votes influence the operation and function of company performance and due
to this Tesco company makes less profit. Hence the market shares of company reduces by
9%. this is not a good news for company as they wouldn't be able to grab more new
investors.
Opportunity
 Tesco company launched a new discount stores with the name of Jacks in which they
perform well. So the company need to invest more in it as it has potential to grow and
compete with the low cost rivals like Lidl and Aldi.
 Tesco company, expands it business operations in many countries but there are many
other company such as Turkey, Indonesia and so on where they can emerges for growing
potential.
 There are various stores of Tesco company which are not performing well, so if they
partners up with others local business and get knowledge about local markets by which
they can increase the performance so Tesco have opportunity to partners up with local
business unit.
Threats
 The biggest threat of this company is with the supermarket competitors such as Walmart,
Carrefour etc. as these firms are growing too at marketplace.
 Tesco company promotes its food products by “Woodside” farms in which there was no
farms at all under its assets lists so by this court found that Tesco company is misleading
its consumers by using fake farms as a brand name.

 After Brexit the company would not be able to exports their products in European
countries and this puts major impacts on business operation of Tesco company (Tuleja,
2016).
Impacts of Key drivers of SWOT analysis on functional areas.
Impact of key drivers of SWOT on operational and R&D Department : The main
important function that perform by the operational department is to manufacture the goods or
services according to preferences and demands of consumers. So that they will able to get
satisfaction after consuming services (Hamilton and Webster, 2018). But in UK and Japan they
would be able to satisfied their end users and due to this they need to closed their stores and
faces so many loss. Additionally, the operational performance of company related to stores of
Tesco in some countries has been low, which represents the marketing department is not doing
appropriate ground research before opening the stores. Which means they possess a weak team
in R&D sector. So by this company will not be able to accomplish it goal of success. Along with
this after Brexit they would not able to exports their products in EU nations which affects the
sales and operational activity of company as it reduces the sales. Due to competitors of Tesco
company which are present at market, the entities need to adopt some innovative technologies
which needs to be combat with other players of market that can be Walmart, Carrefour and many
other players by which there is huge investment in research of new trends and preferences as
well as the strategies of other competitors as well as there is requirement of strong and effective
team of R& D so that they will able to compete with competitors.
Finance: Impact of Brexit on function of company decreases the performance that
directly affects the profitability of company and by which the market shares of company will
reduces by 9 %. due to this company would be able to attracts more number of investors for
company and that affects the function of finance department (Ferraro and Briody, 2017). As well
as the due to the competitors of Tesco company they wont be able to attracts consumers towards
their services and its affects sales and profit of company. Along with this the taxation rate,
government policies affects the business operation & growth of Tesco company in many areas of
nations and all these can be overcome by launching innovative and unique products at
marketplace. Tesco company have threat of taxation, credit, government rules and regulations.
All these affects the growth and performance of company in some parts of nations. In order to
combat with all theses threats company needs to become very creative and innovative. As well as

there is major impact on forexr rate of Tesco company as they would not be able to export and
import their product to European nations due to Brexit. Additional, due to failure in US and
Japanese market they wind up there business and this puts a huge impact on finance of company.
In order to combat with all threats and weakness of company entities need to adhere some
effective strategies and need to addresses all these threat before penetrating in new market by
gaining advantage of opportunity and threats.
CONCLUSION
From above discussed report it has been analysed that it become vital for firm to analyse
all external and internal factors for the smoothing running of operations so that company will
able to accomplish its organisational goal within stipulated time framework. For assessment of
these macro factors company can use SWOT analysis along with PESTLE model.

REFERENCE
Books & Journal
Adekola, A. and Sergi, B. S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Amponsah, C. T. and Ahmed, G., 2017. New global dimensions of business
excellence. International Journal of Business Excellence. 13(1). pp.60-78.
Cherunilam, F., 2020. International business. PHI Learning Pvt. Ltd..
Ferraro, G. P. and Briody, E. K., 2017. The cultural dimension of global business. Taylor &
Francis.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Tuleja, E. A., 2016. Intercultural Communication for Global Business: How leaders
communicate for success. Taylor & Francis.