External Audit of Tesco

Task 2 - Conduct and
External Audit for a
New Venture or a
Company of Your
Choice

Table of Contents
INTRODUCTION ..........................................................................................................................3
EXTERNAL AUDIT OF TESCO...................................................................................................3
Remote environment analysis.....................................................................................................3
Industry environment analysis....................................................................................................5
Operating environment analysis .................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The external environment consists of the outside factors or the influences which have an
impact on the operations of the business. The external environment of a business consists of the
two types of environment of which one is micro and the other is macro environment. The
business must be ready to act or react on them so that it keep up with the flow of the operations.
The external environmental factors consists of competition, customers, technology, political,
resources, economy and social conditions which have influence on the performance of the
organisation (Konovalova and et. al., (2018)). Even if the external environment works outside, it
has great influence on the internal growth, operations and sustainability of the business. The
organisation chosen for this report is Tesco Plc, a retail based company which is operating
worldwide. It was established in 1919. The mission statement of the company is to become a
champion of the customers by helping them to enjoy the easy and quality life by delivering them
good quality products at affordable prices. This report shall cover the analysis of external
environment which consists of industry, remote and the operating environment.
EXTERNAL AUDIT OF TESCO
For analysing the environment of the business, it is divided into three main interactive
segments which involves remote, industry and the operating environment.
Remote environment analysis
In context to remote environment, the PESTEL analysis is discussed below for the
company Tesco. It is a model which helps in identifying the external factors which may affect
the performance and working of the company. Remote environment involves the situation that
occurs as the threat or may cause the change which can happen to the specific industry or
company. In context to Tesco, the PESTEL analysis is discussed below-
 Political- It is concerned with the political environment of the state where the company
operates. Tesco operates in multiple countries whose political environment or stability
affect the operations of the organisation (Regent and et. al., (2019)).
The positive impact of the the political factor is that political stability of the countries like
United Kingdom (UK) support the operations of the company which helps Tesco in enhancing its
productivity by increasing sales whereas the negative impact of the political factor is that the
ongoing financial instability across the world have affected the working of the companies as