Tesco: Business Functions, Environmental Impact, and Strategy Report

This report provides a comprehensive analysis of Tesco's business functions and its operating environment. It begins with an introduction to business integration and its importance, followed by an examination of the internal and external environmental factors impacting Tesco, using the STEEP model. The report then presents a SWOT analysis, evaluating Tesco's strengths, weaknesses, opportunities, and threats. Furthermore, it applies Porter's Five Forces model to assess the competitive landscape of the retail industry. The study then delves into how various business functions, such as marketing, contribute to Tesco's organizational success. The report concludes by synthesizing the complexities and uncertainties facing Tesco, offering insights into its strategic positioning and adaptation to a changing business environment, specifically in response to challenges like the COVID-19 pandemic and evolving consumer preferences. The report utilizes academic resources to provide a detailed and well-supported analysis of Tesco's business operations and strategic responses.

Integration of business
functions
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Demonstrate a analysis of the internal and external environmental context within which
businesses operate in order to exhibit knowledge and analyse the impact of changing and
challenging environments on businesses and business functions in different sectors................3
Business Functions and its Contribution to organisational Success...........................................7
Create the density and vagueness of other aspects which impose on companies and business
functions including structure, culture, stakeholders and ethics...................................................9
CONCLUSION..............................................................................................................................12
Bibliography..................................................................................................................................13
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INTRODUCTION
Business integration is termed to be a plan of action that is developed to regulate
information technology, organisation structure or culture along with stakeholder and ethics
analysis. Business integration is termed to be the thinking of ways to coordinate and absorbed
different business function. The aim of the integration of business function relates to analysing
the various business practices like marketing, finance, HRM and operations etc. Integration is
termed to be the mix-up or mixture of the various practices, process and system with each other.
When a business integrates its business function they are creating a business entity to raise
competitiveness and earn a competitive advantage within the targeted market segment (Kumar
Meena and Difrancesco, 2021). The purpose of this study was to examine the internal and
external environment to predict the influence of the factor over the business function or
performance of Tesco which is the largest retail industry in Europe and the largest supermarket
chain in the UK. Therefore, the following report discusses the impact of changing and
challenging contemporary business environment and how they impact the business function in
different sectors. Also, report outline how different business function contributes to
organisational success. Additionally, the following essay is also synthesising the complexity and
uncertainty of other nature that impose on occupation and different set of occupation of Tesco.
MAIN BODY
Demonstrate a analysis of the internal and external environmental context within which
businesses operate in order to exhibit knowledge and analyse the impact of changing and
challenging environments on businesses and business functions in different sectors
STEEP model
Social factor: -
The social factor is all about the change in the demographic segment of the target market
where a company is trading. Due to the fast-paced life, people in the UK are more moving one
time stop’ shopping or mass purchasing which leads to the changes in social changes such as this
COVID situation in which people can’t go much out for shopping. Tesco, therefore, has raised
the sale of non-food items nature’s changes such as increasing population and ladies’ workers. In
Tesco, there is a reduction in homemade food and the UK shopkeepers also work towards the
increased values of products and services (Johnson and et. al., 2018) Customers became more
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focused on the physical condition problem, and attitude regarding the meal is changing on the
regular basis. There is one example regarding Tesco it is having goods and the product mix to set
for the rise in the value of the natural products. The company was the first-mover inbuilt auto-
pay-out system to avoid hassle-free payment system and to manage queue in the store. Initiation
is taken to avoid the crowd during COVID-19 crises so that company can minimise the risk of
direct customer pay by the monetary and the negotiable instrument. Often when company try to
Technological factor: -
Technology is driven force of globalisation and this is the major instrument which
business needs to be updated and innovated to gain a competitive advantage in this contemporary
business environment. Trends have to maintain themselves at the changing time to remain to
sustain in today time, which is essential for Tesco to maintain up with changing technology.
Technology is a major macro-environmental variable that has influenced the development of
many Tesco products. The new technology benefits both customers and the company (Brian and
Çalıyurt, 2018). There are many technology valorisations has made in the supermarket stores one
of the favourite technology is smart mirrors which act as the changing role and deliver a
remarkable experience to the customers.
Economical factor: -
Tesco encompasses a range of products and economic factors play a major role in the
consumption of this wide array of products. For this the company keeps a keen eye on the
economic changes across the countries, it operates in since these are some of the points that will
impact the sales and profit growth and the turnover in the case company have to deal in the
company have the set the price as per the daily needs products, with a lower rise in the disposal
income will cause a reduction the sales of a product.
Environmental factors: -
Companies in the UK, the European Union and many of the countries around the globe
facing various stress from the government. To respond to this pressure Tesco has taken
initiatives to assist the recovery nature initially Tesco has launched it's second initial destroy save
and reuse plan. The company has taken the initiative of reducing all the non-recyclable plastic to
fewer manners (Bevan, Wolfe and Werhane, 2019). This will lead to a reduction in wastage in
might merged fields. Last year company has changed 800 items which had substantially reduced
the amount of non-recyclable plastic waste.
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Political Factor: -
This company is operating in 12 nations having Asia and Europe. It is therefore
expressed in many politics. These factors include the tax rates and tax provision pending
legislation, the economic condition of countries where it is operating. Therefore, Tesco has
proved over the years that it is capable to respond according to the current and future political
factors and adjust business accordingly. So the stable political environment management has
brought a better opportunity to carry out trade.
SWOT analysis of Tesco: -
Strength
 Tesco has achieved many rewards
regarding the retailing perfection and
the consumer satisfaction and
complete shopping experience.
 Tesco has the biggest grocery store in
Britain with this sense Tesco has
raised its revenue by 11%
 Its many store outlets help to local and
the cultured one to be more
personalized with it and best service
experience
 By the best use of technology, they
improved by the operating and greater
cost efficiency (Rattan and Jones,
2020)
 Tesco has the highest market shares as
leading supermarket and grocery retail
store it holds 27.8 market shares
 The largest private employer in
Europe
Weakness
 Some of the Tesco auxiliaries are not
working properly as they are not
existence to certain factor.
 Competition pressure leads to price
defensive that results in a lesser
margin and Tesco have to focus on
various ways to achieve this way
 Not achieve success in japan and our
market in 2012, Tesco extended the
business and tried to take it to the US
and Japan which had to shut down
later because export operations could
not execute its plan properly.
 As per the fraud scandal in 2017 court
find Tesco guilty for showing a lesser
amount of profit in the books of
accounts for the evasion of tax
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Opportunity
 Extension of jack’s store Tesco starts
their new discount store. Named jacks,
and it is performing well.
 New emerging markets like Turkey,
Indonesia, and South Korea. These
markets have a great potential to grow
 There is a significant opportunity to
grow online shopping for TESCO as
well as offer its home delivery
services to more areas.
 There are opportunities in the private
label market
 Joint ventures if the non-performing
Tesco’s stores' partners up with the
local market then its performance can
move up the graph (Fuller, 2018).
Threats
 Christmas scam 2017 Tesco market
launched a Christmas as; it was
supposed to be funny. But it offended
many people; they said that it was
disrespectful and a direct attack on the
Christmas faith.TV ads should be free
from criticism (Fayziev, 2020).
 Competitive threats are coming from
other global retailer’s giants who may
be able to offer lower prices.
 Food prices are increasing around the
globe which also reduce the
consuming power of the consumer
they can spend on their fixed income.
 Greater stake holder’s pressures
related to the environment and social
responsibilities also adversely impact
TESCO’s cost basis
 Supermarket competitors like wall
mart, Carrefour, and Aldi are the main
competitor of Tesco they are also
reaching a high growth level.
Porter’s five forces
The competitiveness of Tesco’s business environment was examined with the help of
porter’s five force model. The analysis findings are summarized as followed
Industry Rivalry:
The United Kingdom retailed market is very competitive since many competitions
operate in this segment. There are having large no of rivals, prices and promotions, marketing the
level of their similarity are quite high (Woodward and Veal, 2019). The slow growth of the
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market means essentially that these quotas of very time major market of the companies there has
been intensified the rivalry of the market, which is threatening the position of the leadership on
market of Tesco.
Bargaining power of the buyers: -
The power of negotiation of the buyer is quite high. In that case, the price of the product
varies from one place to another, the price of a product can be low as compared to other place
and the buyers can change from one mark to another. It’s been proposed that people are more
attracted towards low prices, with the availability of the retailers in line, the price of the product
is easy to compare and select this way (Fuller, 2018). Hence buyers can easily switch a million
consumers weekly that terms of lesser customer bargaining power the customer. to another
retailer if they are not happy with Tesco’s products, Neither Tesco offers more than 80 million
consumers on weekly basis.
Bargaining power of suppliers: -
The bargaining power of supplier is low since Tesco offers food and no food items from
more than 1000 suppliers all around the world. Thus, Tesco can easily reduce products access
and while select limited suppliers that offer products of high quality.
The threat of substitution: -
The threat of alteration in the retail industry is moderate. On the other hand, the major
substitutes of large no of the retail chain are small and convince and organic shop that does not
pose t any serious threat to Tesco financial sustainability customers in the addition to the large no
of production Tesco offer good product n lower prices and make them proper attractive. (Mayer,
2018). On the other hand, consumers can purchase non-food products from other well-known
retailers.
The threat of New Entrants: -
The threat of new entrant is low since companies have invested more in adjusting
financial resources to set up the availability in the retail market high level of market rises in the
factor that prevents the new prospectus.
Business Functions and its Contribution to organisational Success
Tesco is the largest retail brand in the world and one of the renewed brands with several
supermarket-chain stores in which they are offering a variety of products under one roof to
render convenience in the shopping experience to the buyer. For that company need to perform
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the number of business function which directly have an impact on organisational success and
performance. Following are the functions which Tesco are performing
Marketing:
Marketing is a type of business function which under core focus is on product promotion to
acquire and retain the targeted prospectus to increase both brand awareness and revenue at the
same time. Marketing is a function or a way present product to target customer, Tesco marketing
team are focusing on to gain a competitive edge (Samusenko, Plaskova and Prodanova, 2020).
Tesco marketing strategy also makes extensive use of print and media advertising systematically
as a tested channel to send marketing to communicate the message to the current and potential
customer. The marketing strategy of Tesco also promotes sales through various forms such as Club card. Costumers collect 1 point for each 1 GBP spent in Tesco. Several times a year
customers receive statement and vouchers equal to the value of points they saved. Gifts. The supermarket chain offers gifts e.g. buy-one-get-one-free, promotions frequently to
boost the sales range of products.
Accounting and Finance:
A finance function is to increases enough capital to afford the business also the cost and
the price of the product now Tesco is a big company its functions are carried out. Department
where the finance directors are responsible for taking financial and investments decisions at a
time (Hongcheng and Junchao, 2020). The finance department based at Tesco is now the central
office. Now the financial functions of Tesco are divided into two Ares; which are: The management accounting department is where they decide their finance for future
periods; Tesco also plans to set and provide the budget to their department. Tesco plans to
make assumptions about what should happen in the coming periods. The financial accounting department is where Tesco needs to produce real database
documents Tesco looks back on their cash flow statement, how much profit they’ve made
and what they’ve lost, balance sheet.
Human resource management:
Without superior Human Resources, an administration can’t make a high-quality team of
effective experts. The major purpose of the Human Resource Management team embraces
recruiting persons, guiding them and, make them assist to the proper motivation and the guidance
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and a large extent more (Cubric, 2020). Therefore, Human Resource Management at Tesco
involves many activities such as recruitment talent analysis, provision of a good working
environment, programmers aimed at retaining employee with good performance and the
treatment equally. These divergent trends within HRM are all important as, without them, the
employee may not feel valued. Increasing employee self-worth is a valuable tool. Considering
that ensuring quality in the firm is an important legal consideration given the right of all people
to work in a safe environment that is free from bullying and respect human rights.
Operation:
Employee engagement and defines the roles and responsibilities in the organisation with the
help of an effective organisation. Tesco operates different store formats, each distinguished by
size and range of products. Tesco runs two operations Global operations and online operations. Global operations: - Tesco boasts a global store portfolio of over 1,800 stores. Besides the
UK company operates stores in France, china US, Poland, Republic of Ireland, Japan,
Malaysia, Czech Republic, South Korea, Slovakia, Thailand and turkey here Tesco operates
manually with help of professional operation managers at each branch of every country Online operations. Tesco run’s the world’s largest grocery home-shopping services,
Tesco.com (Tsyganov, 2019). The site started in 2000 six years after Tesco began operations
on the internet consumer goods, telecommunications and financial services are also provided
via the internet. Therefore, Tesco implies both onboard and online operation management.
Create the density and vagueness of other aspects which impose on companies and business
functions including structure, culture, stakeholders and ethics
Organisational structure: -
An organisational structure is a system that outlines how certain activities are directed to certain
to achieve the goal. Tesco’s governance structure comprises five committees reporting to Tesco
PLC board which makes Tesco’s business structure highly ordinal reflection the large size
business, even in the store level, there are as many as four layers of management is some large
companies are not same some operates slightly different structure depending upon their location,
size, range of product and some other factors (Bidmon and Knab, 2018). It can be debated that
three or four management layers within a single store may create unwanted officialdom with a
negative implication on the chain of communication across the managerial layers. Therefore, the
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higher-level management needs to consider late opportunities that are increasingly changing
operations via reducing layers of management.
Organizational Culture:
Cultural management is the process of making and clarifying work culture inside an
organization. This includes keeping motivation on the performance of the organisation’s culture
while measuring the impact of the culture on motivation and efficiency. Tesco is having a high
no of market sharing that have to maintain the position across the market and they have to work
accordingly Tesco have to set the innovations and modifications for the market for the new
market leader the competitiveness. Though Tesco is a global brand of grocery retail it has several
consumers with different beliefs and culture. The pattern of culture affects behaviour, need and
demand . The management of Tesco needs to focus on its consumer wants to analyse their
culture too. To identify customer buying pattern company have to set the survey method within a
common community, are of society. Organizational culture also affects the pattern of Tesco to
manage the work and nature and actions. Culture is important to make an environment in the
workplace more comfortable for the employees.
Ethics:
Ethical management is the practice of being honest and virtuous in a role as a manager.
Management training will help you with this and there are several responsibilities and
obligations of an ethical manager, including settings a good example, holding everyone to the
same standards, and making expectations clear. As a founder member of the Ethical Trading
Initiative (ETI) Tesco use the Ethics base code which includes employment is freely chosen,
freedom of association and the right to collective bargaining are respected, working conditions
are safe and hygienic, child labour shall not be used, living wages are paid, working hours are
not exclusive, no discrimination is practised, regular employment is provided and no harsh or
inhuman treatment is allowed (Hai and Hung, 2020). Moreover, they have accomplished fair
trade commitment for their farmers.
There are different types of ethical issues of information system to create an
understanding of IS ethical issue. Tesco has approximately 472000 employees and they hold lots
of their personal and financial information. Tesco is following the data protection act 1998 and
strongly committed to keeping the information private and should not sell to another third party.
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Stakeholders: - High power, highly interested people- Customers and the government falls under this
category because the bargaining power of the customer is damn high so they have more
power of influence. High power, less interested people- This may include government and investor which
can influence the operations working of the market but are less interested in the business. Low power, highly interested people- It consists of suppliers and employee who can be
more helpful for the market although they do not have enough power to influence the market Low power, less interested- These people need to be monitored, but don’t need much
effort to waste to satisfy them they include contractor and commission agent
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CONCLUSION
Therefore, from the above carried out study, it has been concluded that a business performs
several functions in their daily routine to get the expected results from their efforts. It has been
discussed that the various business functions are integrated to get the best effective results, but
certain internal and external factors can disrupt business functions which are discussed to
acknowledge the company’s competitiveness in the targeted market segment.
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