Business Environment: Governance, PESTEL Analysis, and External Environment

Business Environment

Executive Summary
Business Environment creates a deep impact on the organizations. This is so because it
can create dynamic situations for them. It also changes very rapidly and thus its changes can
create an influence on the profitability of the firms. The company which is able to sustain by
adjusting to them quickly will be able to earn higher-level of profits and thus will be able to
acquire a competitive edge in the future time period. Thus it is the responsibility of the managers
to create specific strategies so that the organizations are able to achieve the goals and objectives
in these circumstances by applying correct methods and techniques.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Governance and Structure of Tesco PLC.....................................................................................1
Importance of PESTEL analysis..................................................................................................3
Analysis of external environment................................................................................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business Environment of an organization refers to the influence which the various types
of factors have on its working pattern and functioning and can influence its level of profits
(Akhtar and Sushil, 2018). It is quite dynamic in nature and can change anytime therefore the
companies are required to adjust their working pattern according to it so that they are able to
achieve their various types of goals as well as objectives and can achieve a strategic edge over
the competitors easily. For this report, Tesco has been chosen. It is a British Multinational
Company which deals in groceries and other related consumer items. In this assignment, specific
analysis will be made on governance and structure of the company, importance of PESTEL
analysis and use of PESTEL analysis for the analysis of external environment.
MAIN BODY
Governance and Structure of Tesco PLC
Overview- Tesco PLC is a company which deals in general merchandise and offers
varied products and services under it to the customers. It has a large market share in U.K. and
the overseas market and can earns a substantial amount of profit. It is headquartered in Welwyn
Garden City, Hertfordshire, England, United Kingdom. It is the third-largest retailer in the world
according to gross revenues and ninth-largest retailer in the world according to revenues.
History- Tesco was founded by Jack Cohen in 1919. During the subsequent years it has
grew substantially and expanded its stores not only in U.K. but also internationally in many
countries. Thus it has made its image as the retailer which the customers can trust and has
created a brand name and goodwill for itself in all these years. Thus it has created an unique
image for itself and therefore the customers can trust it for products and services.
Organizational structure- There is a hierarchical structure which is followed in Tesco.
At the top there are board of directors of the company. They are the ones taking all the important
decisions and consist of 14 members. Under the board, there are different committees which
exist such as audit, corporate responsibility, nomination, remuneration and disclosure. They take
the decisions on several important matters.
The company has different types of functions which can be explained as follows-
 Production- Here, the activities which are related with manufacturing of goods takes
place (Aribawa, 2016). In the context of Tesco, these activities are carried out effectively
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