Analysis of Business Environment for Tesco and NHS

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations, their purposes, sizes, and scopes. It delves into the relationship between various organizational structures, including marketing, HR, finance, and research and development. The report examines the positive and negative impacts of the macro environment, such as political and economic factors, on businesses. It also includes an internal and external analysis of Tesco and the NHS, highlighting their strengths and weaknesses in relation to external macro factors. The analysis covers micro, medium and large organizations, and their legal structures. The report provides insights into how these factors influence business operations and strategic decision-making, offering a detailed overview of the competitive landscape and challenges faced by these organizations.

BUSINESS ENVIRONMENT

Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Different types and purpose of organization...............................................................................3
Size and scope of different organisation......................................................................................5
Relationship among different organizational structure................................................................7
PART 2............................................................................................................................................8
Positive and negative impact of macro environment...................................................................8
Internal and external analysis of Tesco and NHS......................................................................10
Strength and weakness interrelating to external macro factors.................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment means all of the internal and external factors that affect how the
company functions including employees, customers, management, supply and demand and
business regulations. An example of a part of a business environment is how well customers'
expectations are met. Tesco, is a British multinational groceries and general merchandise retailer
with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom. It is the
third-largest retailer in the world measured by gross revenues and the ninth-largest in the world
measured by revenues. This report classifies the information on issues of types and purpose of
different type of organizations. Size and scope of range of different types of organization.
Relationship on the basis of functions of companies and how they relate with objectives and
structure of the company. Impact on the environment of positive and negative factors on the
basis of operations of business. Analysis of the environment on the basis of internal and external
factors. Strength and weaknesses that interrelates with external macro factors (Vincent and et.al.,
2018).
PART 1
Different types and purpose of organization
Organisation can be defined as an entity comprising one or more people having a particular
purpose. Organisations can be of several types and they differentiate on the basis of their
purpose, size, nature, operations and their legal structure. There are several kinds of organisation
and main three types of organisation are as follows-
Public Organisation
Organisations that are known as public organisations are those that are owned and
operated by the government. These organisations are owned by government and are operated for
the purpose of providing services to society and people of community (Canel and Luoma-aho,
2018). This means that these organisations are either owned by local, state or national
government. Finance to these organisations is provided by government or through the money

raised with means of taxes. Goods and services of these organisations are for the benefit of
community.
Concerned with legal structure of public organisations, these organisations are
accountable either to state or to national government and they are also founded by government
with either complete ownership or more than 51 percent shares are owned by government. NHS
is an example of this type of organisations.
Private Organisation
Private Organisations can be defined as any organisation that is owned by private people
rather than any government. These organisations are operated with a purpose of to make profit
and include business activities for profit and are not accountable to government and government
does not play any role in operations of the organisation. These organisations can be owned and
operated by one or more people with a view to generate and increase revenue and profit. Tesco is
an example of this type of organisation.
In relation with legal structure of these organisations it can be said that these
organisations are of different types on the basis of their legal structure (Tereso and et.al., 2019).
These types are-
Sole Proprietorship- Owned and managed by individual
Partnerships- An organisations with more than one owners and is managed by them
Large Company and Multinational Corporations- Companies that are large and those operate
in more than one country, ownership may involves members and shareholders
Cooperatives- This means an association of person that is owned and controlled by people to
meet their economic, social and cultural needs through jointly owned and democratically
controlled.
Voluntary Organisation
Voluntary organisations also known as organisations of third sector are organisations that
are non-government and non-profit organisations. These organisations are created an operated

with a purpose to make social impact. These organisations operate with a purpose to create social
impact and also work for the purpose of creating society a better place to live. Profit earned by
these organisations through their activities and operations is again invested in these organisations
(Manetti and et.al., 2019). These are of three types that are for-profit, not-for profit and semi-
profit. Profit organisations earn profit and invest back to provide social services. Semi-profit
organisations are those that operate and earn partial profit for their product and services. Oxfam
is example of this type of organisation.
Legal structure of these organisations consist of individuals enter into agreement usually
as volunteers and finance of these organisations is managed through membership fees for those
that are not-for-profit.
Size and scope of different organisation
Basis Micro Medium Large
Objective These firms do not
have enough
resources and that is
the sole reason why
they are able to take
out profit on a
minimal level which
is as per the resources
allocated by them.
These organizations
have a urge of
achieving growth
with time and
establish their base so
that with time they
can make their name
in the market Ifinedo,
Pyke and Anwar,
2018 ().
These companies
have a ready stock
and resources to
invest in different
areas which is why
they have ready
capital and they have
the power to offer
more premium
products so that
customers have a
urge for them.

Stakeholders These companies do
not have a big team
or members of
stakeholders their
employees working
in the company and
its owner are the only
stakeholder of this
scale of firm.
Stakeholders of
companies operating
on this scale are their
customers and
employees.
Stakeholders of firms
maintaining their
operations in
different countries are
members of the
board, financial
institutions such as
banks and their
customers.
Profit Volume These companies are
not able to take out
high amount of
profits because of the
limited resources they
have to invest.
These businesses earn
profit on a substantial
scale but with
investing more
resources in their
business they will be
able to achieve
growth and earn
more.
This scale of business
earns more and they
have to earn more as
they have no option
because if not they
will incur huge
amount of losses and
will go out of
business.
Legal Structure Companies who are
maintaining their
structure at low scale
uses structure of
limited liability.
The legal structure of
companies that are
playing on this scale
in the market is most
of the time limited
partnership (Hong
and et.al., 2016).
Legal structure of
companies such as
multinational
corporation is
generally legal entity
which is looked after
by the owners of the
firm.
Size Size of these
organizations is
limited in terms of
employees and
people involved and
These organizations
employ more
employees and
people for operations
that extend to 250
These organizations
are largest in terms of
size and employ more
than 250 employees.
Size and scale of

in terms of their scale
of operations.
maximum. In terms
of their scale of
operations also
extends to more
cities.
operations also
extends to national
and international
level. Tesco is an
example of this type
of organization.
Scope Scope of these
businesses is limited
to particular activity
involving least people
and least activity.
Mainly operational
activities are
performed by these
organizations.
These organization
involve more
activities extending
their scope. These
activities involve
operational and basic
managerial activities.
These organizations
has significant scope
and involves
operational,
managerial and
several other
supportive activities.
Companies operating on a small or micro level can achieve growth if they focus on the areas
which are viable and if their owners have the knowledge and skills they can form their strategies
and develop their portfolio through which they can achieve success and increase their share in
the market.
For the companies that are maintaining their business on a medium scale it is important that they
look areas or sources through which they can raise funds so that they can make a difference than
the companies that are operating on a small or micro level. The difference will be in terms of
adding more employment so that they can work on more projects and increase their revenue in
the market.
On the other hand companies such as large corporations operating in different countries has to
assess the condition and needs of the market before making a decision to begin their operations
in those countries so that rate of success can be assessed and they are ahead of their competitors
(Yashkova and et.al., 2016).

Relationship among different organizational structure
Marketing with HR-
The department of HR is concerned with the activities that look after recruitment, hiring
and firing of employees as per the requirement of the company so that they can find employees
that they can form up their skills and come up with something new in the market. It is necessary
for the HR of Tesco to comply with this factor so that they can make changes in their style of
working and form the strategies easily. HR of the company has to look after their training and
development on the basis of assessment of their performance so that they can invest in them as
per that basis. It is necessary that both marketing and HR department work together because
team of marketing will promote the need for the company in the area of hiring of employees and
it is the team of HR who will decide who is eligible to work in the team of marketing ( Salwa and
Sudarsan, 2018).
Marketing with Finance-
In order to carry out the activities of business it is the department of finance that has to
work carefully. Any error in filing or misrepresenting a task can cause a huge amount of loss.
Other than this they are the ones who evaluate the requirement of funding in each area so that
business can achieve growth in the market. The team of marketing needs to work under the
budget set by the department of finance and all the activities of promotion and advertising are
done under it. But the team of marketing feels that the strategies they are implementing will
require more funds which is why they need to work together so that there is no clash between
them which affects the whole process (Hair Jr, Page and Brunsveld, 2019).
Marketing with Research and Development-
Currently the management of Tesco is facing difficulties in order to keep up with the
pace of environment and the changes that are affecting the business. This has forced the
management of the company to invest in the department of R & D so that they can look for areas
which are viable and have potential. This will help Tesco to come up with things that can make
their portfolio and offerings different than that of competitors which are operating on the same
scale and affecting the business of the company. R & D team helps the team of marketing to
assess the strategies as per the requirement of the potential customers so that they can make it

more attractive. With this the team of marketing is able to gain insight of the condition different
countries. The help that is seeked from marketing team is to promote the brand which has been
finalized by the department of R & D.
PART 2
Positive and negative impact of macro environment
Political Factors-
This factor undertakes the issues of decisions taken by the government of the country
which affects the profits of business. The issue of Brexit taken by the government has put a
shock to many businesses as it has affected the rate of import and export and the relation
between many suppliers which is affecting the business drastically and creating difficulties for
the management of Tesco. Other than this because of this many investors have taken there
money back are they not able to find new investors due to this which is making it difficult for the
company to carry out their operations.
Economic Factors-
This factor undertakes the issue of rate of growth in the country, rate of inflation and
other factors such as standard of living of people. This helps the company to know how much
investment they need to make and resources they need to allocate in different areas. The
economy of every country is in a flux right now because of Covid-19 and it has left no liquidity
in the hands of any business. Many of the businesses have shut their operations down because
they were not able to carry out their activities. if they chose to increase their prices to cover up
the losses they will lose their strategy of low price which is also known as cost leadership
(Hachicha and et.al., 2016).
Social Factors-
These factors are concerned with the beliefs values and culture of people which the
company has to follow if they want to gain acceptance in the market. It is necessary that
company understands their value. For instance they have seen a change in the process of buying
as earlier people preferred buying things by feeling a personal touch but nowadays they want that

to get it delivered at home because it is more convenient and at time of pandemic demand for this
has risen because it is safe. Demand of goods is based on its acceptance and that will rely on
their culture. People are concerned about their health that is why they are shifting to healthy food
instead of unhealthy food.
Negative impact of this factor is that Tesco requires considering changing requirements
and subsequently needs to adopt strategies to implement changes. It also create challenging
situations for organization.
Technological Factors-
These factors are concerned with the level of advancements in the technological factors
so that they can keep up with it as they help the employees of the company to provide them with
better quality of service. They have been using this factor in the form of RFID through which the
system keeps a count of stock automatically and there are no chances of fraud. Apart from that
they have come up with their own methods for payment through which they give loyalty points
to their customers which is very beneficial for them (Lamba, 2019).
Negative impact of this includes requirement for adapting latest technology and creating
technology to compete in market. This involves financial investment.
Environmental Factors-
Government is forcing all the large corporations such as Tesco to contribute some of their
time, money and resources for the betterment of the environment. The management of the
company has accepted to the terms of government and in order to comply with them they have
made changes in the route of delivery so that there is less pollution and they have announced that
by this year they will change the process of their stores so that they can reduce the amount of
carbon footprint released from it (Geetha, 2016).
Negative impact of this is that Tesco needs to change its practices that are environment
friendly and this can reduce productivity or incur extra cost.
Legal Factors-

These factors are concerned with complying with the forces of laws and regulations that
is made by the government of the country so that there are no restrictions imposed on them. This
is important for Tesco because there has been many cases where company has been involved in
legal aspects and they had to pay huge amount of money in order to settle the case in court but
that affected the reputation of the company which lost trust in the eyes many of their loyal
customers. Positive impact of this is that following and adherence to regulations contribute in
building a positive image of the organization.
Internal and external analysis of Tesco and NHS
Strength-
The list of strength of Tesco goes on and on because it is considered as the biggest
grocery store of UK in terms of revenue as compared to their competitors. Apart from that they
have filed profit of more than 10 per cent in their books last year. Because of their relationship
with their suppliers they have been able to get many benefits such as they get their products at
fast pace and at cheap prices. Tesco is one of the largest private employer as they have given
jobs to more than 700,000 people and still 5,00,000 are with them (De Vries and et.al., 2017).
Weakness-
Even after so many strengths there are many weakness such as they had faced many
failures which has affected the goodwill of the company in the market. They were not able to
maintain their operation in the countries such as Japan and US. The strategies and decisions
taken by them were never planned and because of that they lost many of their customers. for
instance, they changed the facility of club card without even consulting with their customers
which make them shift to another brands. Many times company has committed fraud in terms of
filing of profit which has made a huge scandal out of it that has affected their reputation in the
market. Apart from this they have not been able to kept a count of debts which are through cards
and that is affecting their scale of profits. Currently the position and share of the company in the
market has been reduced because of the pandemic and the decision of EU (Beynon-Davies,
2020).
Opportunities-

Tesco is a large multinational corporation as they are working in more than 13 countries
and they have still much demand in the market. It is necessary that they analyze the markets that
are emerging and underdeveloped to assess their capacity and make their base into those markets
so that they can increase their share. Company has opened new stores from different subsidiary
brand by the name of Jack’s store. This has opened their gates to compete with the brands such
as Aldi and Lidi. Another opportunity that company has is to partner up with other firm so that
they can serve in new market with them learn their culture and gain acceptance. In order to keep
up with the trends they have enabled selling their products online.
Threats-
The no of threats has been lined up for the management of Tesco as last year it was the
issue of Brexit and this year the pandemic of Covid-19 has affected the business in many ways
because of which they had to fire many of their loyal employees. This has not only affected the
business of Tesco but the whole economy over the world has been affected. They advertised their
products with fake name of Woodside farms which was not in their list of fixed assets and for
that they have to settle it under legal consent. Other than this they need to think continuously as
their key competitors are the biggest threat for the company as they are affecting the business of
the company (Bawany, 2016).
SWOT of NHS
Strengths
 Provide financial protection to public in terms of consequences to their ill health. This
means services of NHS are comparatively less costly compared to private treatment of
health.
 Another strength of NHS is Highly effective and efficient organization in terms of its
services for health. Effective in managing long term conditions that are also known as
chronic diseases such as diabetes, kidney diseases and this make it preferred health
organization for patients. It provides trust of public organization, because it is a public
organization.
Weaknesses

 Main weakness is Overall performance of NHS is poor compared and also it involved
long waiting time for patients.
 High turnover is another weakness of NHS causing shortage of effective and efficient
employees. As a result, it employs less competent employees and this further affect
quality of treatment at NHS.
Opportunities
 Crucial opportunity for NHS is reducing waiting time for patients can enhance overall
efficiency of NHS and will create new opportunity for NHS.
 Along with practices of reducing turnover of employees is also a opportunity by keeping
efficient employees within organization.
Threats
 One of the major threat of NHS is Increasing competition in health and care industry is a
threat for NHS.
 In addition to this another weakness is that image of NHS is also being affected because
of work contracts and this is also a threat for the organization.
Strength and weakness interrelating to external macro factors
There are many similarities and differences between both pestle and SWOT analysis as it
helps them to cover the needs of the environment which helps them to form strategies on the
basis of market so that they can attract their target audience easily. There are many situations
where both the analysis interrelates with each other. The difference between both the methods of
analysis is that pestle analysis takes out information from the external sources of environment
and SWOT analysis takes out information for the company from both internal as well as external.
Pestle analysis covers many areas which helps the company to work under the legal aspects and
restrictions set by the government of the country.
Other than that it helps them to find out the potential of different markets so that
company can make a decision of entering in them. After they have made the analysis of the
factors they will be able to get an insight that which of the measures need changes or
improvement so that they can increase their rate of growth. This is necessary as their image is

already not good in the eyes of customers and suppliers and with initiatives such as these they
will be able to make changes in their reputation. The management of the company needs to use
both of this analysis to improve their image and gain the trust of people by assuring them there
will be no involvement of Tesco in these activities. Hence, with help of PESTLE it is analyzed
that use of latest trend of organic and healthy food will be assistive in creating good impact of
company among consumers.
It is necessary that Tesco makes a public appeal for the wrongdoings and the faulty
measures they have done so that they can gain the sympathy of people. It is necessary that they
have to change their practices and their methods and work with ethical nature in the market so
that they can sustain it. Both of this analysis will help the company to serve as per the needs of
environment with its suitability and meet up with the needs of customers. If this is done in the
right manner then they don’t have to worry about their key competitors stealing their share as
they will be able to easily get it back (Ajayi, 2016).
CONCLUSION
From the above studies it has been assessed it is necessary that Tesco makes changes in
their portfolio and offerings as their operating profit is getting reduced. Other than this they need
to form strategies for the situation that is affecting their business the most such as the pandemic
of Covid-19 and Brexit so that they can get their liquidity in the market back and invest in more
viable areas. Through that they can enter in emerging markets and establish their base this will
help them to achieve growth. Most importantly before making a decision they need to conduct a
research of the market so that its potential can be taken out and the chances of achieving success
are known to them. Other than this it is necessary that they stop working with unfair trade
practices and getting involved in scandal because of that because they are losing their reputation
as well as their customers in the market and till they start working with measures that are of
ethical nature they cannot achieve the trust of customers back and keep them loyal. They are
facing the threat from major key players such as Sainsbury, ASDA etc. which is why they need
to look after these measures and form strategies to beat them.

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