Business Environment Analysis and Report - HND Business, Unit 1

This report provides a comprehensive analysis of the business environment, focusing on Tesco as a case study. It begins with an introduction to the business environment, defining its internal and external factors and their impact on organizational activities. The report then delves into the relationship between different organizational functions, such as sales, marketing, and production, exploring how Tesco utilizes functional, divisional, and matrix structures to manage its operations. A key aspect of the report examines the positive and negative impacts of the macro environment, including political, legal, economic, environmental, socio-cultural, and technological factors, on Tesco's supply chain and overall performance. Finally, the report conducts an internal and external analysis of Tesco, utilizing SWOT analysis to evaluate its strengths, weaknesses, opportunities, and threats, and examines the interrelation of internal, external, and macro factors. The conclusion summarizes the key findings and references the sources used.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
P3. Relationship among different types of organizational functions..........................................1
TASK 3............................................................................................................................................3
P4. Positive and negative impact of macro environment............................................................3
TASK 4............................................................................................................................................5
P5. Internal and external analysis of Tesco.................................................................................5
P6. Relation among internal and external factors with macro factors........................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is the combination of internal and external factors which having
impact on its existence and influence their activities. It consists various factors through
companies are able to attain their target in efficient manner. For this purpose companies have to
provide proper training to their employees in order to improve their skills and knowledge. Also
responsible to maintain health and safety environment for their staff members. The present is
based on Primark which is UK based retailing company and provide varieties of goods and
services to their targeted customers (Teece, 2010). It is a international supermarket which having
number of store in many countries. There are different types of organization with different
purpose and aim. Voluntary companies such as Oxfam is charitable firm. It is focuses on global
poverty and use collective efforts in order to increase employment. Non profit making firm name
called Tesco plc is international retailing company which is able to provide varieties of products
and services like cloth, toys etc. in order to attract customers. Staff members of all entities needs
to analyse positive and negative impact of macro factors within existence of firm. Through

identify strength and weaknesses companies are able to maintain their performance in
international market and improve profits margin as well.
TASK 1
Covered in PPT.
TASK 2
P3. Relationship among different types of organizational functions.
Tesco is broad concept in which define different types of organizational functions which
are great impact on the existence of business. It is a retailing company consists number of
activities such as sales, marketing, production, distribution and much more. Staff members needs
to maintain full command on them. Through this they cited firm is able to attain objective and
target as well at all levels of business. Every activities or departments having their own strengths
and weaknesses (Drucker, 2017). But staff members of have identify and try to perfome
functions accordingly. Each function consists different staff members with different capabilities.
Some of these are as aligned below-
Functional structure- Large of companies opted functional structure through which they
maintain performance and increase market share. Each function completed in separate
department which is managed by several managers. Through this process employees are able to
focus on particular mission and try to attain their objectives as well. Tesco opted this function for
its smooth functioning and achieve task in separate departments. The main drawback of this
process is while conduct activities each department not able to consult with each other. Products
and services produce by them cited firm are passed by different departments. With the help of
this process customers are able to receive better quality of goods and services.
Divisional structure- This process is able to spread activities across various branches.
Each division having different functions such separate accounting, sales, marketing and so on.
The main advantage of this approach require number of personnel which are carry out all
relevant functions. Tesco opted this process for implement their activities within organization.
For this process staff members are responsible to frame plans and strategies which are helpful for
them to attain long time success (Cantwell, Dunning and Lundan, 2010). Higher authorities of

Tesco recruit best employees for each of their department and allot work to them on the basis of
their skills and knowledge. The main drawback of this function is that workers of each division
performing same or identical function through which not able to identify efficiency of each. Also
weaknesses or strengths of each employees is able to determine that they are beneficial or nor
success of company.
Matrix structure- Members of Tesco opted matrix structure for the purpose of enhance
flexibility in existence. Using if this process is able to improve flexibility within organizational
functions. In which each employee is engaged in work in separate activity based on different
departments like marketing, finance etc. The work has been assigned to them by different
managers of each department. Managers and leaders of each sections have to provide training
session to employees in order to enhance their skills and knowledge. Through this session they
can easily identify strength and weaknesses of each employee (Klapper, Lewin and Delgado,
2011). The main drawback of this process is that effective chain of command is becomes
complicated. They have to allot work according to their skills, knowledge and experience in that
particular field.
Organisational chart- Structure of company is easily visible with the help of
organizational charts (Carroll and Shabana, 2010). It has been prepared by staff members of
Tesco through their collective efforts. They have to frame well designed charts which is helpful
to take effective decisions regarding operational functions of business. With the help of this
process cited firm is able to improve its management efficiency. It is positively contribute in
decision making process. It divides up firm's operating activities or functions. As it is easy to
understand and simple to frame (Aterido, Hallward-Driemeier and Pagés, 2011). This functions
is able to make things simple and easy to understand as well.
TASK 3
P4. Positive and negative impact of macro environment.
Macro environment factors which influence the Tesco supply and demand and affects its
economy, financial state, its strategies and planning. These factors are nearly a framework that
has different types of affect on the company. It can be positive as well as negative. The macro
factors are:

Political environment- While establishing a company, a major responsibility of the
owner is to know all the terms and conditions to start a business. They should be aware of laws
and guidelines provided by the government to start a business. This policy refers to political
environment. It is closely related to revenue related policies. The positive impact of this policy is
that it tends to motivate for increasing the standards of the company, and improve their
productions and services (Osterwalder and Pigneur, 2010). The democratic government enforces
the same time of democratic behaviour inside the company also. This helps people to express
their views easily in the cited firm, and would make them feel to be an important part in the
organisation. Due to establishment of these policies there would be political stability among the
workers as well as for the company to work effectively. It will create more awareness and sense
of responsibility if the company is started to follow political policies. There will be political
moral developed in case of implementation of such laws.
The negative impact on organisation due to this policy is that it can sometimes go against
the ideology and practices of the company (Commander and Svejnar, 2011). For example if the
company is making bags and products of plastic and if government has banned plastic, then there
would be great loss to that company. In this case Tesco organisation is a retailing sector which
works on productions of cloths, so if government bans the any particular material of cloth or
raise the tax revenue from clothing department then this company would be in loss.
Legal Environment: They should be aware of laws and guidelines provided by the
government to start a business. This policy refers to legal environment (Trkman, 2010). Benefits
of this environment is that laws which are based by the government protects the workers and
employee in that company, by providing them security of job and salary fulfilment.
Disadvantages of this is that it may allow employers to misuse some of these policies to
blackmail the company for no reason, even when there is no mistake of collaboration.
Economic Environment: This section includes financial section, economic policies,
revenue department of the Tesco firm. The positive impacts of this policy is that the general
economic condition deals with the situation arising in the current market like money rising,
unavailability of raw material. All these factors influence he supply of the products by the
organisation to the market. By these points, they decide their cost, quality, availability and so on,

by making a comparative study of full market scenario. This helps in boosting their market price
or position and helps in bringing progress to the company.
The negative aspect of this policy is that there would be lot of pressure under which all
the companies would have to work, this may stop them from concentrating on their quality and
rather they would just have to take tension on how to compete with others (Hamilton and
Webster, 2015). More competition can also make them loose their identity and get exploited by
the customers, as they have so many options to choose. It will make Tesco suffer a lot, unless
and until this company improve its standard and quality up to a benchmark.
Environment: This includes the working atmosphere of the company, which should be
comfortable and reliable for employees to work in it. Advantage of this is that it helps in
encouraging employers and workers to do the work more enthusiastically and interestingly.
Disadvantage is that it needs to be properly monitored in time to time and in case of any
quarrel, there is a team required to solve those issues and maintain peace.
Socio-Cultural Environment: It is very crucial and essential policies which need to be
kept in mind while starting a business or a company strategy. If in case the company ignores
these polices then there would be adverse affect on its business (Boons and Lüdeke-Freund,
2013). The positive advantage of socio-cultural environment is that it helps if society upliftment
by providing them with employment, job offers, better variety of products and so on. Their
responsibility is to see whether the company is not creating pollution, or any type of anti social
activities like corruption or illegal products selling. This attracts customers and help in creating
some rules and regulation by which the society is not affected.
The negative impacts of this policy is that, there is lot of pressure build up on the
organisation by the society to follow rules and regulations accordingly. This may influence the
planning and strategies of the Tesco company at times.
Technical Environment: In this field, they represents various new applications related to
marketing theme which is achieved through discoveries, inventions, and ideas. The positive
effect of these factors are they cause many developments in technologies which can lead to great
marketing implications (Klapper and Love, 2010). This adversely affect many industries
drastically. There are times when a new launch of product become so popular that it becomes the
landmark of the company and takes the organisation to a new height.

The negative impact of the same policy can be seen as , if the same scenarios is repeated
and instead of getting great acceptance of the product, it is dislikes by the people then the
company will go in debts (What is Business Environment? Explain its types. 2017). Because all
of the money is invested in planning, designing, marketing and then launching the product in
market. So it will be badly affect Tesco organisation.
TASK 4
P5. Internal and external analysis of Tesco.
Internal and external analysis of Tesco organisation is very essential for improving its
culture, expertise, resources and their qualities of market strategies of company. The
continuously changing circumstances of modern business environment and market scenario
needs the cited firm to adopt new changes easily and overcome with their old policies. They need
to cope up with the coming trends of the market. All these factors are well explained in SWOT
analysis of the company.
Internal factors of Tesco- The internal factors of the company which need to be
analysed are strengths and weaknesses.
Strengths will determine the overall qualities of Tesco with which they can take over the
market place and also expand their wings to larger part of the county. It includes large amount of
capital which the company has accumulated within these years of success. Credits and
equipments are something which a company keeps as an asset to facilitate the work with great
efficiency. Hard working and loyal customers is also great asset of Tesco firm (What is the
business environment?. 2017). There is an availability of channel of distribution which provides
an ease of transportation of products. If the items is of very high quality then it comes patent or a
copyright product which becomes the symbol of that organisation.
Weaknesses of cited firm depicts those areas where company needs support and
improvements. These are the factors in which organisation do not easily excel in its tasks. One of
weakness of Tesco firm is the location where it is situated (Zott, Amit and Massa, 2011). The
market constantly changing, in case the product requirement shifts from one place to another
then there would be great loss to the economy and sales of this company.

External factor of Tesco- The external factors which are required to influence the
company are opportunities and threats.
Opportunities basically means chance provided to the organisation for its improvement
and increasing efficiency. It does not comes in the way so easily, so it is very essential for
company to grasp the opportunities as soon as it comes, else it will go and hopefully never
return. New technologies that arise in the market provides a lot of opportunities of improvement
in this company. Also at times the policies enacted by government, are in favour of cited firm
then many opportunities arise for that establishment.
Threats to Tesco organisation can be many and basically leads to lot of competition and
stress for the company. It can be good at times for improving its quality and services to establish
a mark in the market, because competition brings jealousy and enthusiasm to do better than their
competitors. It brings a different kind of energy to beats its components (Fernando, 2011). But at
the same time, there also some adverse effect of threats which includes stress tension and
pressure among the team members of Tesco. The changing environment of businesses and
marketing can lead to many challenges and threat for this company to survive for long.
P6. Relation among internal and external factors with macro factors.
Strength and weaknesses of Tesco having impact its macro environmental factors. The
biggest strength of cited is effective performance of employees. They have to perform task in
effective way in order to achieve set of objectives (Chesbrough, 2010). Leaders have to provide
training to them in order to enhance their skills. Through this they can easily use technology and
other available resources which is helpful for them. Entire business have to frame various plans
and strategies. Also they have to implement them as per the requirement company. Most of the
internal as well as external factors are interrelated with macro environmental factors. They
having impact on its existence of business organization. Opportunities which are created are
responsible to impact on advance technology (Wirtz, Schilke and Ullrich, 2010). Long term
success can be achieved with the help of this process.
CONCLUSION
On the basis of above report, it has been concluded that business environment is the
combination of various types of factors such as internal, external and other macro factors. There

are different types of organization. Tesco plc is multinational gross retailing company which is
public company based in UK. Government having control on it and held approx. 50% capital as
well. Primark is private company which is responsible to provide various goods and services in
international market. Oxfam is charitable firm which is incorporated for the purpose of donation
to poor people or who need financial help. There are differences organizational function which
having impact on its existence. The biggest strength of tesco is that it opted advance technologies
for the purpose of produce better quality of products and distribute in international market. On
the other hand, biggest weakness is that increasing rate of competition or increasing rate of
prices. They are highly dependent on other countries for purchase raw material. Available
resources are not properly used by cited firm for the purpose of maintain performance. Certain
macro factors such as political, economical, legal etc. are able to influence its existence.
REFERENCES
Books and Journals

Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-
art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Cantwell, J., Dunning, J.H. and Lundan, S.M., 2010. An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management
reviews. 12(1). pp.85-105.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning. 43(2). pp.354-363.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Klapper, L. and Love, I., 2010. The impact of business environment reforms on new firm
registration.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
Wirtz, B.W., Schilke, O. and Ullrich, S., 2010. Strategic development of business models:
implications of the Web 2.0 for creating value on the internet. Long range
planning. 43(2). pp.272-290.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Online
What is the business environment?. 2017. [Online]. Available through.
<http://www.marketingteacher.com/business-environment/>. [Assessed on 13th July
2017].
What is Business Environment? Explain its types. 2017. [Online]. Available through.
<http://www.mbaofficial.com/mba-courses/business-environment/what-is-business-
environment-explain-its-types/>. [Assessed on 13th July 2017].