Business Environment Analysis Assignment - Module Name

This assignment provides a comprehensive analysis of the business environment, examining both macro and micro environmental factors. It utilizes PESTEL analysis to assess political, economic, social, technological, environmental, and legal influences, illustrated through the example of IKEA. The assignment also explores the internal environments of companies using SWOT and TOWS analyses. Case studies of Sainsbury's and Tesco are included to evaluate their strengths, weaknesses, opportunities, and threats, as well as strategic recommendations. The document also explains how SWOT and TOWS analyses aid in decision-making processes by providing a framework for critical thinking about company operations and strategic planning. References from various sources support the analysis.

BUSINESS ENVIRONMENT ANALYSIS 0
BUSINESS ENVIRONMENT ANALYSIS
System04121
2/17/2020

BUSINESS ENVIRONMENT ANALYSIS 1
Answer 1:
The macro atmosphere comprises the outside factors which cannot be controlled and it also
impacts the decision making, presentation and plans of the company. On the other hand micro
analysis is the internal environment issues that impact the business. The instance of macro
environmentally factors. “IKEA” also pretentious with these outside situation forces.
 Political and legal factors: these factors comprise the variations in the administration doings
and the vicissitudes in the regulations and the rules. The political and lawful issues impact the
choices of the business. For illustration: government provide subsidy or the low rate of
assessment of the retail commercial then it can impact the decisions in a positive manner.
 Economic Factors: the economic factors in variety is the combination of global and
national setting, the commercial organizations are employed below the economic situation
which impacts both the choices related to the manufacture of the organization and the
customer decision making process (Jonsson and Foss, 2011)
 Environmental Factors: each and every association use some normal capitals for its
industry like forests, agriculture, products and etc. there some of these non-renewal resources
which are used by the business organization they should take the decisions after knowing
the obtainability of these capitals (Jonsson and Foss, 2011).
 Technological factors: these are the factors which comprise new skills, abilities and
information requires for manufacture of service and goods. These technologies are needed
for the manufacture and they also influence the choices of the commercial
 Social and cultural forces: social and cultural influences include corporate target customers,
changes in taste and tastes, arrogances and values of consumers, etc. These factors affect the
supply and demand of the business association. If industry products goods according to the
taste and preferences of the customer, then it positively affects the organization.

BUSINESS ENVIRONMENT ANALYSIS 2
"IKEA" expressions these environmental macro-factors. Big and major changes in macro-
environmental factors are usually beyond business switch, so it is necessary that the
company's management must be able to examine the properties of these influences in order to
make good choices. Those belongings are analysed through PESTEL examination (Jonsson
and Foss, 2011)
Answer 2
Strengths
 Customer loyalty is strong
 Well-known brand in the university
 Affordable pricing (Sainsbury,
2019)
Weakness
 Does not have any mission
statement
 Have various products but lack
flexibility when compared to the
competitors
Opportunity
 Online shopping has become
common
 Strong network for distribution
Threat
 Strong competitors
 High competition in pricing
(Sainsbury, 2019)
TOWS Analysis of Sainsbury's
Strength Weakness
Opportunity  There is an Increase in
online shopping, the
company keeps its
customers up to date by
allowing them to order
online by allowing
providing customer
oriented products
(Sainsbury, 2019)
 Wal-Mart needs a clear
mission statement, as
retail trade is potentially
booming
Threat  The company has a huge
brand identity, faces
competition from rivals,
and this can be avoided
through the introduction
 In order to any kind of
tough competition, Wal-
Mart should emphasis
more towards the

BUSINESS ENVIRONMENT ANALYSIS 3
of new products
(Sainsbury, 2019)
existing line of product
in order to remain
above the competition
by investing more on
campaign of
advertising , this way
they will be able to
keep its competitors
always on pressure
SWOT analysis of Tesco
Strength
 Largest grocery market share
with 28.4%
 Good and established supply
networks (Tesco Plc, 2019)..
Weakness
 Sales including fuel and VAT
declines by 1,3%
 The retail cash flow was declined
by 1.9 billion
Opportunity
 Low corporation tax can be used to
low down price in order to get
advantage
 Rise in organic food and thus
Tesco has the opportunity to
introduce this in the market (Tesco
Plc, 2019).
Threat
 Growth of discounts and offer in the
competitive markets
 The supermarket price wars are
forcing in lowering down the prices
(Tesco Plc, 2019).
TOWS Analysis of Tesco
Strength Weakness
Opportunity  they also have the
chance to change in the
growing organic food
marketplace by making
use of their establish
name of brand (Tesco Plc,
2019)..
 Established network of
supply and having a
good relation with the
suppliers which can
enable better price
negotiations for Tesco.
 Demand decreases can
be calculated by
reflecting on the rising
developments in the
supply of clean food
with fresher and organic
food to boost sales.
 Concentrate on the
emerging market in
health and food can
Tesco will help to solve
productivity and other
problems to improve its

BUSINESS ENVIRONMENT ANALYSIS 4
sales
Threat  it can use its size to
address prices by using a
price cut to be realized
by mass purchasing
 Tesco might open
more suitability supplies
of its own, and near
some of its superstore
openings (Tesco Plc,
2019).
Ways in which TOWS and SWOT help in decision making process
SWOT and TOWS analysis is a procedure which needs management to think in a critical
manner about its operations, by focusing on various action plans that can helps in improving
the position of the companies. The TOWS analysis allows the management to choose those
strategies that can help the company in an effective manner
The strategic development tools shows that TOWS analysis helps in identifying the
strengths, weaknesses, opportunities, and threats facing a company along with the strategies
to solve them (Iskanius, Page, and Anbuudayasankar, 2010).
Answer 3:
Strength and weakness of the association are connected with the outside macro factors as in
some gears organization may be exaggerated by the outdoor factors. Association is not able
to classify numerous issues that disturb the decision making of management straight and
indirectly. Correct examination of these two features gives diverse kind attainment to the
commercial. Both the influences are interconnected to each other and they may upsurge the
risk of external macro factors in the organization. for instance if we conduct the analysis
with Hotel Marriott to assess the external factors and try to find the appropriate alternative in

BUSINESS ENVIRONMENT ANALYSIS 5
order to overawed the difficulties. External factors contains contestants strategy, market
vicissitudes and etc. (Iskanius, Page, and Anbuudayasankar, 2010).
.

BUSINESS ENVIRONMENT ANALYSIS 6
References
Tesco Plc 2019, Annual Report and Financial Statements 2015 [online], Available
from:http://www.tescoplc.com/files/pdf/reports/ar15/download_annual_report.pdf [Accessed
17 February 2020].
Sainsbury 2019, Annual Report Annual Report and Financial Statements 2019 [online],
Available from: https://www.about.sainsburys.co.uk/investors/annual-report-2019 [Accessed
17 February 2020].
Jonsson, A. and Foss, N.J., 2011. International expansion through flexible replication:
Learning from the internationalization experience of IKEA. Journal of International Business
Studies, 42(9), pp.1079-1102.
Iskanius, P., Page, T. and Anbuudayasankar, S.P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product
industry. International Journal of Electronic Customer Relationship Management, 4(4),
pp.395-414.