Tesco's Business Analysis and Strategies

This assignment delves into a comprehensive analysis of Tesco's business environment using both micro and macro environmental factors, employing PESTEL and SWOT analysis tools. It examines the competitive landscape, identifies key challenges and opportunities, and explores Tesco's strategic initiatives to maintain its leading position in the UK retail market.

Business and business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
P1. Different types of organizations.......................................................................................3
P2 Size and scope of the organisations...................................................................................5
Functions relate to overall organisation mission and objectives............................................8
P3 Organisation structures and functions...............................................................................8
P4 positive and negative impacts the macro environment in UK retail sector.....................11
Explain how strengths and weaknesses interrelate with external macro factors..................13
CONCLUSION..............................................................................................................................15
REFERENCE.................................................................................................................................16

INTRODUCTION
This report explains their different types of business and environment it is related to
micro and macro environment. Micro environment add various factors like competitors,
customer, investor, stakeholder and macro environment includes economic environment,
technological and cultural environment factors (Al-Debei and Avison, 2013). This repost also
giving a comparison between profit making business organisation and non profit making
organization and showing business strength and weakness also.
P1. Different types of organizations.
Organizations are entity comprising different types of peoples working together to
achieve predetermine goals. There are various types of organization which are working in a
market to provide a services and goods to people ( Drucker, 2017). Most of the common types
of organization are Profit organization, Non-profit organization and Nongovernmental
organization (NGO).
Profit organization are those associations whose main aim is to make profits out of its
investments. Its primary goals are achieving profit through its operations for company and its
investors (Felin, Lakhani and Tushman, 2014). This organization usually operate in private
sector they have to maintain goodwill and reputation in the market.
Non profit organization are also known as non business entity which are operates to
motive of well fair for society as well as achieving organizational goal. It is tax exempted
organization or do not pay income tax on the money that they receive for there organization. This
organization are using surplus of the revenue to achieve its ultimate goals and objectives. This
organization serves services to public in some way like hospitals, universities, charities etc. This
organization worked with the intention of provide good, services without to aim of private gain.
They help to increase public and public confidence is a factor in the value of money that this
organization is able to raise, its result is that they can make more money for the organization.
Non governmental organizations (NGO) are that association which are founded by the
citizen for fair of society, it is a voluntary citizen group which is organised to operate social
welfare activities on a local level, national level and international. It is operated by the public not
by the government, this are active in humanitarian, educational, health care, public policy,
human right, and many areas (Vveinhardt, Gulbovaite and Streimikiene, 2016). This

organization provided services benefits and premises only to members. It is task oriented operate
by the people with a common interest.
Particular Profit organization Non profit-organization Non governmental
organization
Purpose For profit organization
main purpose is to
generate profit with
develop useful and
quality product and
services that are
valuable for
customers. It focuses
on achieving a goals
and objective of
company as well as to
fulfill the customer
demand.
In non profit organization
the main purpose is to
solve life threatening
problems and issues of
people. These
organizations are not
concentrated on profit. Its
aims to remove basic
human problems and
accomplished its mission.
The main purpose of
the NGO's are
development of
society welfare of
society. Providing a
social services to
peoples. They fulfill
the public need and
improves a life of
people.
Funding In profit organization,
initially they take a
funding through bank
loan, local investors
and revenue generated
from sales.
In non profit organization
are used to method of
funding through private
donations, corporate
sponsorship, and
government grant, crowd
funding is a form of online
fundraising is popular
method (Altuna and et.al.,
2015.).
NGO's get there
funding from
charities, donation,
foundation. In some
countries the local
government are also
provided funds for
entity.

P2 Size and scope of the organisations
Difference between micro, small and large enterprises
Micro enterprise-
Micro enterprise in assist with minimal employees and minimal capital it usually operates
with less 10 people and it is start with small amount of capital. Micro enterprises help to develop
countries and local areas. Micro entrepreneurs to represent their large majority of small business
for earning more profit. Micro enterprise commonly starts their business with small capital and
providing lots of opportunities to the peoples like giving jobs. Micro business is the source of
income a number of people starts their own business with low cost. Hakim Group of UK which
is regarded to as micro enterprise
Market share and profit share of micro firm-
The market share of micro firm is very much limited as it would not be allowing
expansion and growth into markets. Profits share is also low as compared to small or medium
firms of markets. The examples could be like that of bakeries or beauty parlours having lower
market share having limited investments as well.
Growth and sustainability-
There are very little opportunities for growth of micro firms as they are several times
negligible as well. The sustainability will also be low due to lack of market opportunities.
Small enterprise-
Small enterprise refers to limited in size and its revenue is depending on their industry.
Small enterprise normally starts with 10 people or a manufacturing unit 50 people (Othman and
et.al 2014). It includes owned restaurants, law firm, engineering firms also. Small business start
with very small size, its revenue is also very small, some people start this business their home
accounting business, May only requires an organisation licence. Small enterprise main purpose
start work nth small part and gaining a profit and developing their local area as well as people
also. NISA is working as small firm in the UK.
Market share and profit share of Small enterprise –

In terms of market share of these firms it is also very much low with investments up to
only 25 million in order to operate their business and gaining shares. In order to survive they
need to gain improved amount of profits.
Growth and sustainability of Small enterprise-
They are having lesser number of opportunities through which they could grabbing and
attaining expansion or growth of firm. These would be including like those of restaurants, law
firms and architectural firms.
Medium size firm-
These are those firms which are having more than 250 with about 25 million investments
but should be less than that of 5 billion.
Market share and profit share of Medium size firm –
They are having larger amount of opportunities to expand their business on national level
so that their productivity and performance could be improved.
Growth and sustainability of Medium size firm -
They could be growing in market with help of maintaining their profits and inculcating
higher amount of profits.
Larger firms-
Large enterprise is made-up of employ more than 250 people these enterprises come out
from slow and dependable growth of successful small businesses. Large enterprise earns more
profit and expands their business. These companies are very helpful to generate their profitability
and providing various types of job opportunities in the market. It helps to develop their
economic, it creates a bridge between small and big corporations. Tesco is working is private big
size firm which is conducting its operation globally.
Market share, profit share, growth and sustainability
TESCO is very fast growing organisation its market share is 27.8 percent in 2017. This
company is a large scale and expanding their businesses. Its main motive to earn profit and
giving a number of jobs opportunities. It is retailing industry and selling their qualities products
in UK super market. This industry focus on their customer and growing their business through

promotions they gave attract new shopper. It is profitability organisation and aim there to earn
more market share.
NHS is non-profit organisation its play a role non healthcare and transferring public
sector to hospital to non profit industry. This company improve their efficiency and quality of
services. It refers to government funded medical and health care services in UK. These non-
profit organisation scope getting help to their customer and giving quality treatment to the
customer. NHS has generally increase their expenditure 7.4 percent on the GDP and its market
share 9.7 percent. These organisational have wider scope providing their service all over the
world.
EUROPE AGAINST DRUGS (EURAD) is non-government organisation it main motive
to develop their country and providing growth opportunities. Europe against drugs is non-profit
policy and recovers drugs policies, leading organisation promoting a drug fee and generates cost
for people health and giving a treatment, healthcare and hospital treatment. The value of this
company European market 12 billion.
Complexities of transnational, international and global organisation structures
These are the complexities in the organisational structure of TESCO which has blocked
their capability for managing various operations which are the roles of every units are not
uniform and symmetrical which does not allows them to manage various businesses functions
and operations operated at national level. Another complexity is the headquarter and subsidiary
relationships which is not clear and has ambiguous patterns for dependence and interdependence
and other complexity is regarding decision making and control where management does not
plays an effective role to take decisions uniformly. These complexities interfere with the efforts
which aim to achieve coordination and integration at various level of an organisation. It becomes
difficult in balancing the needs of different aspects related to functional, geographical and
product stakeholders. The command structure used by this organisation creates ambiguity and
conflict in various areas. Also it hinders the process of decision making because it involves many
individuals having different views and not agreeing on the particular thing. These delay in
decision making can potentially increase the cost of administration and outweighs the benefits
associated with the coordination. On the other hand there are complications which are associated
with the transfer of knowledge which creates many problem. For solving these complications one

has to adopt a new organisational structure such as modular or virtual one in which one can
separate core and non- core functions of the business and can focus on the functions which are
core while eliminating other non- core ones.
Functions relate to overall organisation mission and objectives
Both mission and objectives are related to the TESCO's purpose .These are the statements which
answer all the questions such as who are they, what do they value and where they are going. A
mission of the company determines why they exist and how it aims for serving its key
stakeholders. These has a following role which includes providing a great working environment
and treating each employee with respect and dignity, embracing the diversity which is an
essential component, applying the standards which are high in the field of purchasing and
delivering the product, developing enthusiastic customers and contributing to the communities
and surroundings, also recognising the importance of profitability for the future success. They
have a very effective role such as communicating the purpose of the company, informing the
development of the strategy and developing various measurable goals and objectives which
would help to facilitate the company for getting success by implementing those strategies. They
help to promote strategic planning in TESCO which includes changing the structure or various
aspects of the company with respect to the change in environment. A successful change helps to
prevent employees from getting discouraged when they face small failures on the way. This
helps the leaders to perform their role very efficiently and continue to highlight the strengths of
the company. Engaging them can lead to take ownership of the change and changing others mind
to move forward and work in a coordinative manner.
Micro enterprise in assist with minimal employees and minimal capital it usually operates
with less 10 people and it is start with small amount of capital. Micro enterprises help to develop
countries and local areas. Micro entrepreneurs to represent their large majority of small business
for earning more profit. Micro enterprises commonly start their business with small capital and
providing lots of opportunities to the peoples like giving jobs. Micro business is the sources of
income a number of people start their own business with low cost.
P3) Organisation structures and functions
Different kinds of structures relating to size and scope of operations

There are two types of organisational structures first is functional and other one is
divisional structures. These are structures set up particular ways to establish their different goals
and increase organisation progress. Large enterprise and small business achieve their goal and
increase their sales and earn profit through these structures.
Functional structures are the part of marketing department, sales department and productions
department of company. The functional structures work in proper way each portion of the
organisation is classified according to its goal. For example TESCO each department doing work
well and each department can trust on their talent and knowledge and this company worker to
supports their work. This company aim to cover all over area and expand their business. Each
department doing work with coordination and every department work in separately.
Divisional structures it is commonly used in large scale business that operate in a broad area.
This structures cover different kinds of product or markets areas. Divisional structures are very
costly because its size and scope are very large and useful for employees. Small enterprise can
also use a divisional structures on a smaller scale, having different business office in different
part of city. For example Tesco increase their sale in different geographic areas.

Matrix structure
Under matrix organization, employees have dual reporting relationship. In other words, in
the context of matrix structure, employees have to report both functional and product manager.
Such organizational structure is highly effectual which in turn facilitates sharing of expertise and
equipments across project.

P4 positive and negative impacts the macro environment in UK retail sector
Macro environment refer with those external factors which are difficult and also effect
decision making, strategies and performance of the business. These external factors includes
political factors, economical factors, social factors, technological changes, environment
changes and legal legal aspects. These are directly effect on performance of the organisation.
TESCO is retailing of books, clothings, electronic, furniture, petrol and internet services. This
company affected with these external environment forces.
Political and legal factor political and legal factors consider with change in the government
rules and changes in legal policies. These factors directly affect marketing decision of the Tesco.
UK government giving subsidy or low rate of taxations of retailer business. Its directly impact
on the marketing decision corporations. Political forces add some forces that is possibility of
election and accomplished outcomes. The important of the this company business follow all the
rules and regulations and company earn more profit.
Economic factors it is related to the mixture of national and international environment. TESCO
are working under complex economic environment which is directly affect by organisational
production and consumer decision ,making process
Environmental factors TESCO use some important natural resource for their business such as
forest, agricultural products and sea product. So there are non renewal resources used by this
industry and make decision available these resources.
Social and culture factors social and cultural factors focus on target customer of the
organisation, changing in their client taste and preferences, customer attitudes and values. Tesco
deals with changes social structure of the uk and these factors long-familiar with behaviours of
the customer, taste and living standard of their country people. Age and gender is the people also
effect on buying pattern.
TESCO face these macro environment factors with lots of changes these factors are
commonly outside the control of the business so it important for that company management
should be able analyse these factors and make good decision these effect are analysis by apply
PESTLE analysis method.
P5 Conduct internal and external analysis of UK supermarket in order to identify its strength and
weakness

external environment factors and internal environment factors affect the business
corporations (Xavier, and et. al 2014). Environment is very term in business operations, it the
part of planing and helps to identify the strength and weakness of the business. Tesco company
designs supermarket sells their product and facing several loss in their revenue . They
identifying their business need and weakness through swot analysis.
Swot analysis of Tesceo corporation
Strength
 this company business is very wide
and diversified on customer base it
is include number of customer
services and it is one of the largest
and most gainful supermarket.
 The company has wide range of
portfolio their property , it provide a
strong finical position to all kinds of
economic cycle.
 This company various supermarket
store and it giving a more offer to
their target customer.
 TESCO improved their use of
technological through its operations
and their service experience.
Opportunities
 this company underperforming there
could be opportunities for joint
ventures in their local industry. It is
very help full to improve their
performance those area.
 There are opportunities in the private
market and this organisation already
offer but that give better access to the
western goods and full fill these are
people demand.
Weakness
 consumer are not buying their product
to having less available income
 this company subsidiaries are not
working well as they were
compromising with certain external
factors.
Threats
 economic recessions refer to the credit
crunches , market share and profit.
 competitive threats are coming in other
retails who may offer low prices and
sells their product variety.
 food prices are rise around the world , it

 The retailer is highly dependent on its
sale they people has not spent time their
resources on developing the other area.
also reduce their consumer buy power.
Internal and external analysis organisation may find its strength and weakness which
may include following
strength it include some feature of the TESCO organisation, the most important sthenth of this
company us clear in its vision which is generating more profit and provding customer
satisfactions and expand their business with quality product.
Weakness
Weakness this company work in different countries so its a weakness is that it is difficult
to follow and control all over the operations. Weakness are those factor which corporation has
do more work so similarly TESCO do more work its not easy to handle so some time this
company run their business not properly they face many problems like reduce their product
demand, product qualities issues and customer are not satisfied.
Explain how strengths and weaknesses interrelate with external macro factors
Strength and weaknesses of the TESCO businesses are related with micro and micro
environment factors. Company compare own strength with frequently macro environment
factors like economical, political, social culture technological and then its business strategies.
Economic factors are also interrelate with company external macro environment. It includes
change in interest rate, inflations, exchange rate in market. From assessment, it has found that
after recessionary situation occurred in 2007-08, purchasing power of the customers were
decreased to the significant level. Purchasing power or decision of the customers is highly
influenced from the level of disposable income. Referring this, it can be presented that economic
condition has significant impact on business performance. Further, when interest rates on loan
are higher then business unit also faces difficulty in exploring business operations around the
globe. Further, Tesco is operating worldwide so fluctuations take place in exchange rates also
has an impact on business performance and profitability aspect. If this company is financial
strong it has sufficient its financial resources then changing in these rate and these rate will not
affect their products pricing and their market strategy (Rong, and et.al 2013). Tesco always
ready to face all the challenging arises changes in economic factors.

Political and legal factors it refer to the government rules and regulations policies. This
company face some legal challenges and follow some legal polices like change in prices,
making new decision and consumer awareness.
Social and culture it include all those factors which direct influences cultural factors and this
company should have good staff, feasible financial resources and natural resources. This
organisation main strength giving full satisfactions their customer according their demand , taste
and preferences.
Technological factors if this company upgrade its existing technology with new application
than TESCO can change their coming technological factors.
Environment factors this company use natural resources for giving product and services to the
customer. For example company manufactures cloths then it has to follow environment rule and
regulations and do not misuse the natural resource. So management of this company already its
business strategies. Now, customers give priority to the retailer which performs activities in a
sustainable or an eco-friendly manner. Thus, for gaining competitive edge over others Tesco
needs to make focus on effective waste management.
Porter five force analysis of Tesco
Bargaining power of buyers: Moderate
Now, customers prefer to purchase products or
services from the retailer which offers quality
products at suitable prices. Thus, bargaining
power n of Tesco;s customers are moderate.
Bargaining powers of suppliers: low
In Tesco, bargaining power of buyers is
considered as low because it has hundreds of
suppliers. No switching cost exists pertaining
to the suppliers in the context of such
supermarket chain.
Threats from substitutes: Low
Tesco is facing lower level of threats from the
rival firms. Moreover, company is offering
wide range of products or services to the
customers such as clothing, groceries, toys etc
at discounted price level.
Threat from new entrants: Low
UK retail market is reached at saturation level.
Further, in this, several players or companies
such as ALDI, LIDL, Morrison’s etc have built
leading position. Thus, it is highly difficult for
new player to enter and survive in UK retail
market.
Competitive rivalry: High

Fierce competition takes place in UK retail industry due to the less switching cost for customers.
Irrespective of the existence of main players in retail sector, Tesco has maintained effective
leadership position.
CONCLUSION
This reports can be concluded deeply knowledge of micro and macro environment
factors in which business organisation. It also describes TESCO company business analysis
tools such as PESTEL and SWOT analysis and explain business strategies it is very important
aspect to the business. This company main motive to increase their business efficiency and
providing customer satisfaction.