Understanding Business Environment Analysis

This assignment delves into the significance of studying the business environment. It emphasizes how understanding external and internal factors can help managers and enterprises effectively achieve their objectives. The document includes references to relevant books and journals, highlighting key concepts and theories related to business strategy, sustainability, and entrepreneurial orientation.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Covered in Ppt.............................................................................................................................1
TASK 2 .........................................................................................................................................1
P3 Relationship of different organisational functions and its link to objectives.........................1
TASK 3 ...........................................................................................................................................2
P4) Evaluating negative and positive impact of Macro environment on business operations....2
TASK 4 ...........................................................................................................................................3
P5 Internal and external analysis of TESCO to identify its strengths and weakness..................3
P6 Interrelation of strengths and weakness with external macro factors....................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
A business can be considered as the firm, company, organisation or industry, who works
for attaining success and growth at market place. The major aim of each small as well as large
business organisation to gaining attention of large number of customers through offering high
quality goods and services at market place. Market consist as the most effective factor which
plays essential role in transferring goods and services in terms of money. Business environment
describes as different activities and operations which are helpful in achieving organisational
desired goals and objectives in most appropriate manner (Al-Swidi and Al-Hosam, 2012).
Business environment has some positive as well as negative influence on organisational
performance. In this research Tesco Plc is choose organisation, who deals in high quality
grocery, general, electronic, home and food products. Tesco Plc is worlds largest British
multinational retail company, who is focused on establishing an effective business environment
in order to providing fast and effective services and products to their customers. This report
contents the study about different type and purpose of organisation, the size, range and scope of
firm. The relationship between different organisational culture and its objectives will also
discussed in detailed manner.
TASK 1
Covered in Ppt.
TASK 2
P3 Relationship of different organisational functions and its link to objectives
In this modern era each business organisation is focused on exploring their business
activities at wide scale in order to gaining high growth and success at market place. Tesco Plc is
a large business enterprises who deals in public sector and very much focused on providing high
quality products and services to their potential customers in respect to sustain them for long time.
Tesco Plc has categorised there business activities among various departments, which are
contributing their best in order to gaining desired goals and objective in limited period of time.
Each business organisation plays different function which are highly linked with firms goals and
objectives because the major purpose of business firms are attaining their objectives in desired
period of time (Avramenko, 2012). Each business firm follows different organisational structure
at work place in respect to implementing all business activities in right direction. It is required
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for all business firm to follow an effective and simple structure in which operations can be
executed in effective manner. Some essential organisational functions are described as under:
Human resource development: Human resource can be considered as the most essential assets
of firm who are significantly contributing their efforts at work place for generating high growth
and revenue. As a large business enterprises Tesco Plc has large number of employees who are
performing different business activities as per the skill and knowledge (Bansal and Hoffman,
2012). In order to manage human resource Tesco divide their operations in different segments
and this cause high productivity and profitability for firm.
Finance: Capital and funds are most essential element of firm which helps in implementing all
business activities in right manner. It is the major responsibility of organisation manager and
higher authority to manage proper funds and capital at work place so that operations can be done
in efficient manner. As a large business enterprises Tesco Plc needs to have huge amount of
capital and funds for implementing business operations in efficient manner.
Marketing and sales: This is one of the important function of each business enterprises which
has a huge influence of organisational performance as well as productivity. Tesco Plc is widely
focused on increasing their sales and revenue through offering high quality goods and services to
their potential customers.
TASK 3
P4) Evaluating negative and positive impact of Macro environment on business operations
Business environment can be influenced through internal or external factors. Internal
factors are considered as the factors which are available within the firm and managed by
managers. External factors are those are arises through outside of any business organisation and
there is not any control of business or its higher authority (Bill Pasmore PhD and CMC, 2010).
PESTLE analysis is most effective in analysing the positive as well as negative impact of macro
environmental factors, which is evaluated as under: Political factor: This can be considered as the most effective term which is based on
rules and regulations that are created by government and its bodies. It is required for each
business organisation is to follow the rules which are implemented by government of
United Kingdom (Ullah and Lai, 2011). Tesco Plc focused on implementing these rules
and regulation in proper action in order to conducting business activities in right manner.
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 Economical factors: In this factor various elements are involved such as deflation,
interest and loan, rate of inflation. Any kind of changes and variation affects the
operations of firm. Tesco plc is concern on managing economical resources in
appropriate manner in order to implementing all business operations in effective and
efficient manner. Social factors: There is vast change arises is market trend as the taste and preference of
customers are rapidly changed due to change arises in social trend (Boons and Lüdeke-
Freund, 2013). The manager and research departments of Tesco Plc are concern on
identifying the changing needs and wants of customers in order to introducing new and
innovative product which helps in satisfying the needs and wants of customers at market
place. Technological factor: In this modern era technological factors plays most effective role
in retail market. In this innovation is involved as it helps in producing more effective and
innovative goods which are more beneficial for satisfying the needs and wants of
customers at market place. Tesco widely concern on adopting highly innovative tools and
techniques at work place in respect to developing their performance and productivity
(Teece, 2012). Legal factor: These re implemented by government and if there are any kind of change
arises in the policies than organisation needs to follow them in order to carry out their
business operations in systematic ways, thus achieving growth and success in their
business activities. As a large business enterprises Tesco Plc follows legal legislations
which are generated by government and its authorities.
 Environment factor: The products which are manufactured by firm should not harm the
environment and company should use quality raw material in order to develops standard
products (Turban, Sharda and Delen, 2011). Tesco Plc is focused on implementing
various measures which are helpful in saving environment.
TASK 4
P5 Internal and external analysis of TESCO to identify its strengths and weakness
Internal analysis is a process which is carry out by manager in order to identify factor
which affects the operation of business in positive or negative way. Elements which positive
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affect the business activities are known as strengths and the factor which negatively affect the
business operations are known as weakness (Reinhardt and Stavins, 2010). Main factor which
give direction or affect strengths and weakness of company include business polices, plans,
management and structure. In order to collect detail information about strengths, weakness,
opportunities and threats of enterprise. A tool called SWOT can be used by managers of TESCO.
Strengths and weakness are internal factors while opportunities and threats are external elements.
One of the main feature of this analysis is that it guide manager during formulation of business
strategies which ensure effective utilisation of all business resources. All this help enterprise in
get competitive advantage. Main strengths, weakness, opportunities and threats of TESCO can
be better undertone by following points: Strengths: TESCO is one of the leading grocery retail brand in UK. Today firm come
under top ten 100 brand of United Kingdom and this is one of the biggest strength of firm
which attracts large number of customers. Firm offer quality products and services to its
customers. As compare to its rivals such as Sainbury and Asda firm has good financial
position. Further, company offer variety of feature products to its customers which
enhance profitability of enterprise. Global diversification of company is very effective
which decrease risk related with business activities. Company focus on production of
quality products and ensure production as per the specific requirements of different
customers which increase profitability of enterprise. Weakness: At present the company is operating at a large scale and offer variety of
products to its target market such as food, clothes, grocery products, home products and
many more (Saleem, 2017). Due to increase number of business operation it become
complex and difficult for management to manage all activities in an effective way.
Increase number of competitors of company is one of the biggest weakness for firm
which decrease profitability of enterprise. Introduction of various new brand from its
competitors decline current market share of TESCO which directly affect the profitability
of company. Opportunities: In today's business environment where needs of customers frequently and
due to number of technology development firm has opportunity to expand its business
activities in new areas. With this enterprise can increase number of its profits and market
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share (Olawale and Garwe, 2010). Further, with the help of market segmentation TESCO
can produce and offer better quality products to its customers.
 Threats: TESCO face a big threat from its competitor such as Sainsburry and Asda.
Increase competition is one of the biggest threat in retail industry. Competitors of
enterprise are expanding business activities so in this situation it is advisable to TESCO
to increase number of its stores in uncovered areas in order to maintain its current market
share.
P6 Interrelation of strengths and weakness with external macro factors.
The environment of organisation refer to the surroundings of company including several
elements that affects the development and growth. This is essential for a company to manage and
analyse these factors for proper balance of operations of a company. The external and internal
working environment affect each other kin various ways and are interlinked. These factors
shapes the weaknesses and strengths of Tesco. Plc. Here are the macro environment study of
organisation along with interrelation with micro factors:
Political Factors
The elements of political factors of United Kingdom is not positive as the nation has just
overcome with the situation of crisis (Bryman and Bell, 2015). Taxation policies have impacted
on the large organisation like Tesco negatively which is creating weakness of organisation. Also
the crisis have enlarged the rate of unemployment in country that led to reliance of company on
more larger companies. Hence, the state is supporting such businesses which is increasing
company strengths.
Economical Factors
The worse condition of economical factors have directed Tesco toward loss in rates of
sales and overall revenues. Less buying power of consumer lead to less sales amount that is
causing the company drawback of the organisation in United Kingdom. The company have a
wide range of products and services as well as great financial power which is one the strengths of
Tesco. Plc.
Social Factors
Social factors includes the interest, perceptions,opinions and likeliness of people in
regard of organisation. UK have more senior and old people as per their census that indicate
more untraditional choice of people. This is one of drawbacks of company. But as people of
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United Kingdom is more inclined toward modern technologies and advancements which is
leading the condition of alternative choice which is building organisation more strengthen.
Technological Factors
Technologies advancement lead to more conveniences to clients and consumers which is
one of the strengths of company. Tesco use latest technology and modifies system for their
operations and activities which build organisation more strengthen everyday as well as avail
larger consumer base.
Environmental Factor
People of United Kingdom are getting more ecological so as the organisations. Tesco. Plc
have been committing to operate more ecological system of production and distribution for
saving the situation of pollution. This have successfully gaining the attention of consumer toward
them.
Legal Factor
Acts and legislation of the country in which the company is generating and growing their
business affects the development of company (Cantwell, Dunning and Lundan, 2010). New
taxation policy and financial policies have barrier the growth of company despite development.
The organisation have to make the desirable change in their system according to those laws.
Internal Environment(SWOT Analysis)
Strength  Largest grocery supermarket firm
 Powerful condition of finance
 Wide range of commodities
Weakness  Complex administration process
 Powerful competitors
 Financial Loss
Opportunities  Globalisation & industrialisation
 Known for rendering new development possibility
 Franchisee & expansions
Threat  United Kingdom crisis situation
 Competitors are processing furiously
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CONCLUSION
From the above project report, it can be summarised that it is very essential for manager
of every business enterprise to identify and study various factors exist in business environment as
this largely affect the activities of business. One of the main feature of this study is that its help
manager in formulate better policies for business and help in achieve end results of company.
Managers of TESCO can conduct internal and external analysis of business in order to identify
main strength and weakness of company. With help of study of environment company can
minimise the negative impact of various factors on business activities and can maximize its
positive impact. With use of various tools and techniques manager of firm can identify how
strengths and weakness of enterprise are interrelate with external factors and then can plan about
future decisions of business. Overall study of business environment help manager and guide
enterprise how it can better achieve its set goals and objectives.
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REFERENCES
Books and journals
Al-Swidi, A.K. and Al-Hosam, A., 2012. The effect of entrepreneurial orientation on the
organizational performance: A study on the Islamic banks in Yemen using the partial
least squares approach. Oman Chapter of Arabian Journal of Business and Management
Review. 2(1). pp.73-84.
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bansal, P. and Hoffman, A.J. Eds., 2012. The Oxford handbook of business and the natural
environment. Oxford University Press.
Bill Pasmore PhD, S.V.P. and CMC, T.O.S., 2010. Leadership agility: A business imperative for
a VUCA world. People and Strategy. 33(4). p.32.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-
19.
Teece, D.J., 2012. Dynamic capabilities: Routines versus entrepreneurial action. Journal of
Management Studies. 49(8) pp.1395-1401.
Turban, E., Sharda, R. and Delen, D., 2011. Decision support and business intelligence systems.
Pearson Education India.
Ullah, A. and Lai, R., 2011. Modeling business goal for business/it alignment using requirements
engineering. Journal of Computer Information Systems. 51(3). pp.21-28.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Cantwell, J., Dunning, J. H. and Lundan, S. M., 2010. An evolutionary approach to
understanding international business activity: The co-evolution of MNEs and the
institutional environment. Journal of International Business Studies. 41(4). pp.567-586.
Reinhardt, F.L. and Stavins, R.N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Saleem, M.A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of Society and Space. 8(1).
Olawale, F. and Garwe, D., 2010. Obstacles to the growth of new SMEs in South Africa: A
principal component analysis approach. African journal of Business management. 4(5).
p.729.
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