Business and Business Environment: LO3 & LO4 Report - Tesco

This report provides a comprehensive analysis of Tesco's business environment, focusing on the impact of macro-environmental factors. It begins with an introduction to the concept of business environments, emphasizing the interplay of internal and external factors. The core of the report utilizes the PESTLE framework to examine political, economic, social, technological, legal, and environmental factors influencing Tesco's operations across multiple countries. Following this, the report conducts an internal and external analysis using SWOT analysis to identify Tesco's strengths, weaknesses, opportunities, and threats. The analysis highlights Tesco's strengths in its profitable supermarket chains and financial reserves, while acknowledging weaknesses such as price competition and employee turnover. Opportunities include the growing demand for organic food, and potential alliances. Threats include recession, inflation, and government regulations. The report concludes by summarizing the importance of business environment analysis and the value of SWOT analysis for strategic decision-making. It also includes a list of references.

Business and
Business
Environment
(LO3 & LO4)

Table of Content
 Introduction
 Impact of macro environment upon business operations
 Internal and External analysis of an organisation in order
to identify the strength and weakness
 Conclusion
 Recommendations

Introduction
Business refers to the economic activity carried out to
generate huge revenue and profits. Businessman requires a
business environment which is the combination of internal
and external factor like customers, government, employee
and so on that influences the operations of business
environment.

Impact of macro environment upon
business operations
PESTLE is macro economical external factor that include
political, economical, social, technological, legal and
environmental factor that directly affect the operation of
Tesco either in positive or negative manner.

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PESTLE analysis consists
given factors:
 Political factors
 Economic factors Social
factors
 Technology factors
 Environment factors
Legal factors

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Political factor
These factor include government rules and regulation,
taxation policy and so on. As Tesco operates in more than
11 countries and each country have their own rules and
regulation, so it is important for the manager of respective
company to take political factors into consideration.

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Economic factor
Economic factor refer to any changes in foreign exchange
rate, inflation rate, deflation rate and so on. These factors
influences the operation of Tesco due to which it is
important for manager of respective company to frame
strategies rules and polices while taking economic factor
into consideration

Social factor
It includes changes in
customer value, belief,
population distribution
etc. Thus, company must
give priority to social and
cultural factors before
serving any area.
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Technology factor
It refer innovative ways of producing as well as distributing
goods and services. For instance, Tesco has significantly
developed its supply chain management to gain
competitive advantage over competitors.

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Environment factor: It refer to various law implemented
by government to safeguard the interest of environment.
These factor prevent exploitation of resources by making
optimum utilisation of natural resources.

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Legal factors: Legal factors includes labour law,
employment law and so on. Tesco should make sure they
gain legal control over business regulations as well as
flow of goods & services. Thus, taking care of external
legal factor helps in smooth business operations.

Internal and External analysis of an
organisation
SWOT analysis helps in
identifying strength,
weakness, threat and
opportunity of respective
company so that they can
make future decision
wisely.