Understanding Business Environment: Tesco Overview, Legal Structure, Market Structure, Stakeholder Analysis, PESTEL Analysis, Porter Five Forces Model

UNDERSTANDING
BUSIENSS ENVIRONMENT

Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1.......................................................................................................................................................3
Overview of Tesco..................................................................................................................................3
Determine the legal structure...................................................................................................................3
The market structure................................................................................................................................4
Its impact on organization.......................................................................................................................4
TASK 2.......................................................................................................................................................4
Explain the terms: stakeholders, shareholders and stakeholder analysis and application of stakeholder
analysis....................................................................................................................................................4
TASK 3.......................................................................................................................................................6
PESTEL Analysis....................................................................................................................................6
Porter five forces model and its importance............................................................................................8
TASK 4.......................................................................................................................................................9
Develop business in relation to short-term and long-term performance on the basis of KPI and provide
recommendations for improvements........................................................................................................9
CONCLUSION........................................................................................................................................11
REFERENCES........................................................................................................................................12
Books and journals................................................................................................................................12

INTRODUCTION
Business environment or market environment refers to factors which can influence the
operations of business. There are three levels of business environment which involves: internal
environment, external micro environment and external macro environment. The factors of
business environment affect the functions of an organization. Such factors help in identifying
business opportunities, tapping useful resources, making strategic plans and enhancing the
organization overall productivity, profitability, performance and growth (Barac and et.al, 2016).
Tesco PLC is a public limited company which was founded by Jack Cohan in 1919 in England,
UK. The company is operating as a retail industry which offers multinational groceries and
general merchandise. There are several brands which are introduced by the company, such as
One stop, Booker, Makro and others. Tesco is operating in various countries which involves UK,
Ireland, Slovakia, Hungary and Czech Republic. It can be seen that Tesco is a big multinational
company which has offered numerous employment opportunities to more than 4,23,000 people
and the operations of the company are divided into different divisions which involves Booker
group, Tesco store limited, Tesco Bank, Tesco mobile, Tesco Ireland and many more. This
project report aims to define the legal structure, purpose and market structure of the company.
The project with throw a light on the stakeholders, shareholders and stakeholder analysis of
Tesco. With the help of different external environment analysis techniques, the external
environment of HSBC will be analyzed.
TASK 1
Overview of Tesco
Tesco is a multinational corporation based in the United Kingdom. Customers will buy
groceries and other things from it. Its headquarters are in the English town of Welwyn Garden
City in the county of Hertfordshire. Every week, it is said to serve millions of customers all over
the world. Tesco stores have everything a customer could possibly need.
Determine the legal structure
Tesco's Board of Directors is made up of ten people. It has a hierarchical structure that is
well suited to the demands of the company's enormous scale. Multiple management systems
work in this structure to ensure that everything is completed to completion (Bocken, Boons and

Baldassarre, 2019). Tesco's company was founded on a single mission: to be an advocate for
consumers, assisting them in achieving a higher quality of life and a more convenient way of life.
This is still the case. Customers want high-quality goods at a reasonable price that they can
obtain quickly, and it is our responsibility to do this in the most efficient manner possible.
The market structure
Tesco has made a name for itself in areas other than supplying groceries and general
merchandise to its consumers over the years. Tesco has offered employment opportunities to
thousands of people through its various subsidiaries. Tesco calls itself an oligopoly because it is
not the only supermarket in the UK; Tesco is the largest shareholder but not a monopoly because
many other companies compete with Tesco, such as Sainsbury, which owns 16.3% of UK
supermarket shares, and Morrisons, which owns 11.5 percent; this means the entry barriers to
entry are extremely high.
Its impact on organization
Oligopoly is a business environment in which a few companies compete fiercely with one
another. The retail industry in the United Kingdom is one of the best examples of an oligopolistic
market, with Tesco, Sainburys, Asda, and Morrisons as the key competitors. Tesco has been the
industry leader for a number of years, battling to grow its market share by opening new stores
and expanding its product range (Dierkes and Coppock, 2017). Tesco had 30.6 percent of the UK
market in 2009, but the market started to stagnate after that, making it more difficult for Tesco to
sustain and grow its market share in difficult economic times. Sainsbury’s increased its market
share from 16.1 percent to 16.4 percent at the same time. Furthermore, as a result of the
recession, customers of all income levels began to shop at major discounters such as Aldi and
Lidl, and Tesco's profits suffered as a result.
TASK 2
Explain the terms: stakeholders, shareholders and stakeholder analysis and application of
stakeholder analysis
Stakeholders: Stakeholder is a party which has interest in company and can affect the
company or get affected by the business. Stakeholders of an organisation majorly involves its
investors, customers, suppliers and their employees. Stakeholders of a business can be internal as
well as external and such members of the business can be affected or can affect the performance