Business Environment Analysis: Tesco and Primark Comparison Report

This report provides a comprehensive analysis of the business environments of Tesco and Primark, two contrasting businesses in the retail sector. It begins by exploring the types, purposes, and ownership structures of both companies, highlighting the differences between Tesco's public limited company status and Primark's subsidiary model. The report then delves into the influence of various stakeholders on the businesses' purposes, examining how customers, investors, and other parties impact decision-making. Organizational structures are compared, with an assessment of how each company's approach supports its objectives. The impact of economic environments, including factors like price elasticity and globalization, is considered, alongside an examination of political, legal, and social factors affecting business activities. The report uses examples like Brexit and government regulations to illustrate these influences, providing a detailed overview of the external forces shaping the operations and strategies of Tesco and Primark.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Type of business, purpose and ownership of two contrasting businesses ............................1
P2 Different stakeholders who influence the purpose of two contrasting businesses.................2
P3 Two businesses are organised................................................................................................2
P4 Assistance given by style of organization in fulfilling their purposes...................................3
P5 Influence of two contrasting economic environments on business activities .......................4
P6 Political, legal and social factor's impact upon the business activities .................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment deals with all the external and internal factors that has capacity to
change decisions taken by top level management of a company. An organisation has to consider
both elements before formation and execution of a plan. Tesco is a leading company in retail
sector. They are running their business in more than 12 countries. This report will discuss about
types and purpose of business organisations (Constangy, Marger and Brompton, 2015). It will
also include different stakeholders who can influenced the purpose of two businesses. Effect of
economic environment will also become part of this file.
TASK1
P1 Type of business, purpose and ownership of two contrasting businesses
Their are various types of business and their ownership is dependent on their reason of
existence. They purpose has either direct or indirect relation with their mission and vision.
There's no authentic capability between the proprietor and the association, suggesting that all
commitments and after-cost benefits are really yours - this is called 'limitless hazard'. Sole
vendor associations are definitely not hard to set up and suspend, are at risk to by and large
couple of bearings, and ordinarily have decently low running costs. Tesco is a public limited
company, on the other hand their competitor Primark is a subsidiary company of Associated
British food.
The key explanation behind Primark to give incredible quality things to general society;
they require individuals when all is said in done to recognize, they have tolerable association and
in light of the fact that their things are unassuming, it doesn't infer that they are trash. To offer
stock at sensible costs; they require individuals as a rule to have a broad assortment of
contrasting options to them, so they offer them incredible quality things at sensible costs; This
will be expert by looking stores, offering practically identical things, and making our costs lower
than various spots.
Tesco offers a broad assortment of things and organizations from essential needs, family
things ,attire to assurance.
Tesco ownership is guaranteed by a couple of accessories , Tesco is asserted by countless
this is by virtue of Tesco is a PLC and is asserted by investors who sponsor the association .
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Primark's proprietor, Associated British Foods, is the latest association to feel the torment
of record low overlaid yields. The social occasion's UK benefits plot has dove from a little
surplus this time a year back to a £200m lack, which has realized "an extended organization cost
and a higher interest charge one year from now".
P2 Different stakeholders who influence the purpose of two contrasting businesses
Stakeholders has capacity to change the decision taken by management but only some of
them can has this much power. An organization should identify involvement and power of
stakeholders so they can deal with them accordingly. Some of them has more power so whether
they take interest in business or not, they should be reported about every major decision taken in
company. Some have more involvement but do have much power so they should be satisfied by
providing them necessary information.
Tesco's customers have a tremendous effect over the business. They use their customers
information to reveal any legitimate and expected upgrades to their business. Customers can give
their considerations, points of view and comments with a particular true objective to reveal to
Tesco how they are doing as an association and what updates they feel ought to be made etc.
They don't offer the right organizations, things and progressions, at that point their customers
will end up shopping in choice stores. The essential concentration of Primark's is that customer
who are especially discerning about shape and besides the people who needs regard for their
money. In the relationship there are such an assortment of different accomplices like advance
supervisors, customers, boss, specialists, government, suppliers, union and gathering. In the
affiliation considerations of each accomplice are unmistakable.
P3 Two businesses are organised
Tesco has 10 member in their team of board of directors. Tesco definitive structure is
particularly dynamic reflecting the immense size of the business. In reality, even in store level,
there are upwards of four layers of organization in some broad stores (Kennerley and Neely,
2011). Note that the structure underneath is not resolute for all Tesco stores and a couple of
stores work with a possibly special structure reflecting their territory, appraise and an extent of
other store-specific factors. They have more than three or four layers in a store which make no
sense. This create hurdles in process of decision making and form unnecessary association which
are not good for the business.
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Primark Stores Limited Introduction Primark Stores Limited is a reinforcement of
Associated British Foods PLC, and Primark has transformed into a settled family name starting
late. It has set a benchmark for a few associations to follow in a section of the market named the
'regard division'. The association was set up to make clothing that is a motivation for money, so
to speak you are paying for the idea of the thing and not for the check that come joined. As to
things and organizations it is clear to see with the figures over that demand has extended rapidly
concerning late years trading. This is in light of the fact that now Primark are overseeing in a
prominent market however with direct pieces of clothing for everyone in the standard market.
P4 Assistance given by style of organization in fulfilling their purposes
Primark has a different style of conducting their business. They try to focus on the things
in which they are good or at least above than average. This keep them maintaining a decent level
of motivation which is necessary for fighting major players. Primark furthermore have a
publicizing bunch which is moreover something to be grateful for the business since it suggests
that they end up plainly familiar with what the customer considers, which infers that they can
costs back to the buyers and distinctive divisions so they can change the way that the show and
the things are. The structure makes them work more capably and quickly which is something
worth being grateful for in light of the way that then it infers that they can stay before their
restriction and makes the arrangement build up every day (Kennerley, Neely and Adams, 2011).
Tesco on the other hand is know for maintaining their table leader position in market. All
of their plans either have direct or indirect connection with this goal. They believe in providing
better more choices at reason rate. They try to introduce innovations in their business so they can
get some extra edge over their competitors. Giving to much attention to organic food is an
example of their style of doing business. A business needs an unmistakable capacity to know east
from west, which must be clearly passed on to all accomplices. This is the purpose of the
business which would then be able to be isolated into smaller focuses and objectives. There are
past suppliers that Tesco have had a positive relationship with and some of which the suppliers
have been kept right now. Some of which supply resources and things that are sold, others
organizations to clean and finish off oil for example. It is likely going to be refined as it is
granted to each other delegate in every last office transversely finished a substantial bit of
Tesco's stores in the UK, and also on an overall level as well.
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P5 Influence of two contrasting economic environments on business activities
Business environment also include economy where a company is operating their
business. Incidents like Brexit are considered as political but they also have economic impact on
organisation who are running their business in associated nations (Schepers and Van den Berg,
2011). Price elasticity of demand is often used when discussing price sensitivity. The formula for
calculating price elasticity of demand is: Price Elasticity of Demand = % Change in Quantity
Demanded / % Change in Price The reason why Tesco plc might choose to stock branded
products as well as offering own branded products is because branded products tend to be
affordable for Tesco plc so that they can put the prices up to make profit, but branded products
tend to be expensive for consumers, so there is an alternative of the cheaper own branded
products for consumers to purchase.
The influences of branding on price sensitivity and elasticity of demands effects the
demands when the price is to high the demands will go down, this gives an indication that the
price of the brand is sensitive to prices, and it also shows that the elasticity of the brand is
inelastic which shows that the brand should not increase the price or the demands will go down
(Schmidheiny, 2011). Tesco plc might use elasticity of demand when marketing changes to
prices of branded products for example if the prices have changed on particular product and the
demand have decreased form that particular product for a period of time, using the elasticity
formula by dividing the changes of demands by the changes of the change of price which will
give a clear indication of the price elasticity of demands. Global interaction Globalisation is the
process by which the world is gradually as a result of massively increased trade and cultural
exchange. Local level interdependence Local level interdependence in Tesco plc. get their
utilises from local producers such as milk, cheese, egg meat, etc.
Recession - When there is a decrease in growth and this can be because of two reasons,
the first is that the consumer is cutting back on the amount on which they are spending (they may
be saving more instead of spending) and this will lead to the manufactures to cut back on how
much they order from suppliers and then this will result in cut backs and this will then lead to
business making people redundant because they cannot afford to hire them (Taipale-Erävala,
Heilmann and Lampela, 2014).
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P6 Political, legal and social factor's impact upon the business activities
Political - Political stability is usually defined as the state of peace that is normal
experienced in a country from the activities from the government and also the government in this
situation will make decisions and keeping the best interests in mind for people. The Government
may change the tax rates up or down this will be to try help boost the economy, an example of
this is VAT this means all non food and adult clothing range will need different prices on the
shelf edge labels this then means staff will then have to go change the SEL’s ( shelf edge labels).
Although this then will change the profitability and finance department of the company as they
will then need to change the profit sheets that report back to the business (Witkowska, 2011).
Legal - The legal impacts are that Tesco must follow the law, and an example of this is
the trade description act, this is where the product most be described accurately otherwise it can
cause an issue and an example of this the big issue with meat earlier this year, so it is extremely
important that you describe the product well and accurately if not then the trading standards will
have no other choice but to get involved. The legal frameworks is where the business chooses the
way it operates, this will then determine who has what role and share to the business, this will
also determine the relationships between investors, employee’s customers etc.
Social - The social impacts that Tesco may face are the difficulty to recruit the right
people for the job in the stores or the offices depending on where they will be based, also most of
the workers that are in the stores are an unskilled workers on the minimum wage given
(Yagyasen, Darbari and Ahmed, 2013). Tesco is a company that will support charities and the
main one they support every year is tickled pink, they are always thing outside the past ways
they have raised money to, give customers a new product to buy to support the charity.
CONCLUSION
From the above report it can be concluded that stakeholder are very important for every
business organisation. They play crucial role in companies success or failure. External factors
like political, economy also made a huge impact made by on an enterprise.
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REFERENCES
Books and journals
Constangy, H.W., Marger, E and Brompton, A., 2015. CHANGING BUSINESS
ENVIRONMENT.
Kennerley, M and Neely, A., 2011. Measuring performance in a changing business environment.
International Journal of Operations & Production Management. 23(2). pp.213-229.
Kennerley, M., Neely, A. and Adams, C., 2011. Survival of the fittest: measuring performance in
a changing business environment. Measuring Business Excellence. 7(4). pp.37-43.
Schepers, P and Van den Berg, P.T., 2011. Social factors of work-environment
creativity.Journal of business and psychology. 21(3). pp.407-428.
Schmidheiny, S., 2011. Changing course: A global business perspective on development and the
environment (Vol. 1). MIT press.
Taipale-Erävala, K., Heilmann, P. and Lampela, H., 2014. Survival competence in Russian
SMEs in a changing business environment. Journal of East-West Business. 20(1).
pp.25-43.
Witkowska, J., 2011. Foreign direct investment in the changing business environment of the
European Union’s new member states. Global Economy Journal. 7(4). pp.1-30.
Yagyasen, D., Darbari, M. and Ahmed, H., 2013. Transforming non-living to living: a case on
changing business environment. IERI Procedia. 5. pp.87-94.
Online
Neil Kokemulle, 2017. What Are Internal & External Environmental Factors That Affect
Business? [Online]. Available Through: <http://smallbusiness.chron.com/internal-
external-environmental-factors-affect-business-69474.html>. [Accessed on 21st August
2017].
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