Business Context and Management: A Detailed Analysis of Tesco PLC

This report provides a comprehensive analysis of Tesco's business context and its management strategies. It delves into both the external and internal environments, examining factors like market size, product lifecycle, industry opportunities, and the application of McKinsey's 7S model. The report also assesses the impact of implementing change within the organization, the influence of culture on management decisions during transitions, and the effectiveness of operational functions, drawing upon concepts like Kurt Lewin's change management model and Charles Handy's cultural framework. Furthermore, it includes a stakeholder analysis, identifying and categorizing key internal and external stakeholders. The analysis combines findings from both the external and internal environments to provide a holistic view of Tesco's strategic position and operational effectiveness, with a focus on continuous improvement through concepts like Kaizen. This document is available on Desklib, a platform offering a wide array of study tools and solved assignments for students.

Business Context and
its Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
An analysis of an organisation's external environment..........................................................1
Market size.............................................................................................................................1
Product life cycle....................................................................................................................2
Marketing or industry opportunities.......................................................................................2
An analysis of an organisation's internal environment...........................................................3
Mckinsey's 7S's model............................................................................................................4
Combining the findings of external business environment and internal business environment. 4
Impact of implementation of change on an organisation.......................................................4
Influence of culture on management decisions during transition .........................................5
Effectiveness of operational functions...................................................................................5
Stakeholders analysis..............................................................................................................6
CONCLUSION................................................................................................................................6
References:.......................................................................................................................................8

INTRODUCTION
Business is defined as a profession, occupation or any other commercial practices which
are involved in the process of providing goods and services for the purpose of earning profit. For
the purpose of performing all business operations in an effective and efficient manner, it is
necessary to manage all the functions. Management is defined as the five step process which
include planning, organising, staffing, directing and controlling. Management of a business
organisation is responsible for managing all the activities in the organisation (Grishikashvili and
Bechter 2019). The chosen organisation for this report is Tesco which is a British multinational
groceries retailer having headquarter in Hackney, London, England, United Kingdom. This
report include internal and external environment analysis, managing changes,organisational
culture and operational management along with the stakeholders analysis. In addition to this, it
also involve planning for future strategy.
MAIN BODY
An analysis of an organisation's external environment
Tesco is a multinational organisation working in several countries. Hence they are required
to adopt all the rules and regulations and developed by the government of a particular country.
There are several external environmental factors which can affect the operations of Tesco.
Covid-19 pandemic is also considered as the external environmental factor as it reduces the
purchasing power of customers. It has impacted very badly to the business. Tesco is providing
several of products as per the cultural trend of several communities and several countries. They
are also using self checkout machines in their stores for the purpose of making the task easier
and faster. It has been also found that the Tesco is the following all the legal structures and
government rules and regulations of various governments. It is necessary for them to follow all
the local and international laws.
Market size
TAM stands for total available market. It is the total market demand of product or services.
SAM is considered as the segment of total available market targeted by an organisation with in a
specific geographical area. SOM is defined as the serviceable obtainable market in the portion of
serviceable available market which can be captured by the organisation. Tesco is found as the
third largest retailer and the leader of UK retail sector. This company is based in UK and
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expanding their business operations into the international markets which include China, India,
Japan, South Korea, Poland and many more. In 2010 the group sale of the entire Organisation
was £62.5 billion and the operation Prophet was calculated for £3.5 billion (Market analysis of
Tesco, 2022). Currently this company is found as the most profitable online grocery retailer in
the world.
Product life cycle
Tesco PLC is found as the largest Food retailer in United Kingdom. About 4000 food
products have been offered by this company to the general public. Tesco has started their
business operations in grocery retailing but now they had expanded their operations into
stationery, clothing, electronic goods, seasonal goods, health and beauty, home entertainment
and many more. An average of profit earning by Tesco have been calculated as £2 billion. Tesco
is currently working with more than 13 country is a having almost 3275 stores in which
approximately 2115 operating only in the United Kingdom market (Sharma and et. al., 2022).
Tesco has been also introduce their own products in the market which add value and norms of
the group of customers. The product development of Tesco passes through several stages
beginning from the idea of a product until the product maturity stages. At this level the
organisation put their all efforts for the purpose of developing the several marketing strategies
which is suitable for every stage in Product life cycle and market dynamics. It is not necessary
that all the new products will success because of the presence of several challenging factors. The
management of organisation try their best to keep their product life cycle successful and
profitable by different extension strategies.
Marketing or industry opportunities
It is very important part for the business organisation to reconstruct their industry type and the
business organisation which can be done by adopting the blue ocean strategy. There are the
various approaches to reconstruct the boundaries these approaches are formulate in the work
within its boundaries this helps the organisation to move out from the red ocean and create blue
oceans.
 Look across alternative industries- This is an important aspect for the business
organisation to have a overview of the alternative industries and their products and
services in order to remain competitive within the market.
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 Look across strategic groups- The strategic groups within the industry are those groups
which pursue the similar strategy within the busie4ns enterprise. Strategic group includes
the hierarchy order which is build on the two dimensions such as price and performance.
 Look across buyer group- This is the another principle which is an important for the
business organisation to have a look upon the various aspects such as which is the group
is buying which product the most, what influences the byers. This is the important for the
organisation to find out the chain of the buyers in order to remain competitive within the
industry.
 Look across complementary products- It is very important fro the business
organisation to look for an products which can be offered as an complementary to the
customers. It is very important for the Tesco to understand the perspective of the
customers in order to attract them to the various products and servitors
 Look across the functional emotional orientation- This refers to the emotional appeal
to buyers where the consumer can get a experience to know to know the product or
service . It is an important aspect for the Tesco to consider this principle in order to
provide the experience to customer for the new products.
 Look across time- This is the another aspect which is considered as an important
because of the industry and the business organisation (Sharma and et. al., 2022). It refers
to look for the strategies and the organisation should be able to adapt to the change in the
environment from time t time. It is related to the tend which need to be considered by the
company in order to remain competitive within the industry.
An analysis of an organisation's internal environment
Along with the external environment, internal environment also plays an important role
as it also effect the business operations of an organisation. Internal environment include all those
factors which effect the business operations internally and these factors are under the control of
organisations. It is the biggest grocery retailer in United Kingdom which is consider as the
strength of organisation and it attracts the customers to the organisation. The management of
Tesco has maintain their market share in such a way, so that it may affect the customers
positively and investors want to invest in it. Tesco is adopting low cost strategy for the purpose
of meeting the competition. Through this strategy, the management reduce the profit margins.
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Due to this strategy, the organisation may leads to earn less profit but it help them in gaining
high market share.
Mckinsey's 7S's model
Below mentioned are the 7S's of Mckinsey model in the context of Tesco:
 Strategy: Tesco is following cost leadership strategy under which the management is
minimizing its capital expenditure and replace the advantage of pension schemes for
all employees with the objective of cost reduction.
 System: Tesco is depend on the broad range of system which help the business
organisation in completing its operations in an effective and efficient manner.
 Structure: Tesco is following hierarchical organisational structure at their work
place.
 Shared values: The norms of Tesco has been updated as it include innovation, client
centricity, compliance which set down its relation (Awadari and Kanwal 2019).
 Skills: Management of Tesco is providing training and development to their
employees so that the skills and abilities of employees can be enhanced.
 Staff: Tesco is hiring fresh graduates for their organisation. It help the business
organisation in meeting all the requirement of costumes.
 Style: Tesco is using democratic leadership style for the purpose of managing the
employees in the organisation.
Combining the findings of external business environment and internal business environment
Tesco is a multinational organisation working in international market having presence in
more than 13 countries. The laws and regulations of different countries are different and the
management is required to follow all the rules. It is also consider as the strength factor of internal
business environment factor. The preferences of customers are different because of difference in
their cultures. Tesco is dealing with a variety of products and offering products as per the
requirements of customers. Internal as well as external business environment effect the business
operations.
Impact of implementation of change on an organisation
Kurt Lewin's stages model shows the impact of implementations of changes on an
organisation. Below mentioned is the application of Kurt Lewin model in the context of Tesco:
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 unfreezing: It is the most important stage of change management under which the
management of Tesco inform the employees regarding the changes which they are doing
to introduce as per their necessity. Change: This stage of change management state the bringing of changes at work place.
Tesco is required to focus on the problem of paradigm so that they can bring the changes
in formal and informal level.
 Refreeze: At this stage, a specific process has been adopted for the purpose of bringing
stabilization in the organisation of Tesco after making changes.
Influence of culture on management decisions during transition
Charles handy presented a model which has included four types of cultures in an
organisation which include power culture, role culture, task and person culture. Power culture: This culture provide the decision making power to a few number of
people in the organisation. Various rules and regulations have been developed which
controls all the activities of employees. Role Culture: This culture clearly define the role and responsibilities of employees.
Authority is depend on the position of workers (Aderombi, A.O., 2020). Task Culture: it is the culture which is developed by making team for specific project.
 Person Culture: Under this culture, the employee oriented environment has been
developed in the organisation.
Tesco is following the person culture at work place. Under this culture, the management
develop or formulate the strategies by focusing on their employees. Employee oriented culture
has been developed which leads to the development an comfort of employees. By applying this
culture, it make easy to attain the objectives effectively and efficiently.
Effectiveness of operational functions
The constant improvement procedure of Tesco is based on the Japanese concept called as
Kaizen. The doctrine of this theory include the inculcation a sense of employee ownership of the
process. The constant improvement can only be possible with the help of employees of
organisation. Tesco is focusing on improving the efficiency and effectiveness so that they can
maintain their position in the market. Tesco is constantly introducing new products and services
or the purpose of satisfying the needs and requirements of customers. This company is majorly
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focusing on providing defect free products and services. Maintaining the quality of goods with
the aim of achieving organisational goals and objectives.
Stakeholders analysis
 Internal Stakeholders: The major internal stakeholders of Tesco include mangers,
employees, shareholders and many more. These stakeholders are highly powerful and
important for the organisation . External stakeholders of Tesco: It include several people such as suppliers, customers,
competitors, government, local communities and many more (Kruglyak, V., 2020).
These stakeholders of organisation do not have much power to control the organisation
but it impact on the operations with the increase in new rules and increase or decrease in
tax rates. Influence of stakeholders on Tesco: It has been found that all the stakeholders are
important with no equality in power. Some of stakeholders are highly powerful such as
chairman, directors and other senior executives which develop strategies for the
company. Competitors are consider as the external stakeholder as they put pressure over
organisation to do best.
 Conflict of stakeholders in Tesco: Several of stakeholders have different expectations.
These conflicts become the conflicts. For instance, in 2016, Tesco become late in paying
the money to their suppliers as they were focusing on the improvement of its own
financial position. It cause huge conflicts among the employees.
CONCLUSION
From the above report, it has been concluded that the the internal and external
environment effect the business operations. Several of models have been used to analyse all the
factors of business environment. While bringing any change in the organisation, the management
is required to develop the strategies so that the employees can adopt them easily and do work
professionally. Stakeholders are the important part of an organisation. This report differentiate
the internal and external stakeholders. In addition to this, it has been also analysed that the
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planning is essential while formulating the strategies. Several of recommendation has been
provided to the management of Tesco for strategic planning at work place.
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References:
Books and Journals
Aderombi, A.O., 2020. The Impact of a Crisis or Disaster on Corporate Organisations in the
Digital Era: A Better Management of Crises and Disasters (Doctoral dissertation,
University of East London).
Awadari, A.C. and Kanwal, S., 2019. Employee participation in organizational change: A case
of Tesco PLC. International Journal of Financial, Accounting, and Management, 1(2),
pp.91-99.
Domański, R. and Łabenda, M., 2020. Omnichannel of private label grocery products in Tesco
and Carrefour retail chains on the Polish market. Ekonomski Vjesnik, 33(1), pp.191-202.
Grishikashvili, K. and Bechter, C., 2019. Perceptions of independent financial advisors on the
usefulness of big data in the context of decision making in the UK. International
Journal of Big Data Intelligence, 6(2), pp.102-112.
Kruglyak, V., 2020. The Regulatory Criminal Law in the UK: Analyzing Dissenting Factors of
the Deferred Prosecution Agreements. Available at SSRN 3559286.
Sharma, M., Alkatheeri, H., Jabeen, F. and Sehrawat, R., 2022. Impact of COVID-19 pandemic
on perishable food supply chain management: a contingent Resource-Based View
(RBV) perspective. The International Journal of Logistics Management.
Sharma, M., Alkatheeri, H., Jabeen, F. and Sehrawat, R., 2022. Impact of COVID-19 pandemic
on perishable food supply chain management: a contingent Resource-Based View
(RBV) perspective. The International Journal of Logistics Management.
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