Business and Business Environment: Tesco Case Study Analysis Report

This report provides a comprehensive analysis of the business environment, exploring diverse categories of business organizations, including profit, non-profit, and voluntary sectors, with specific examples like Tesco, Crown Prosecution, and Oxfam. It examines the dimensions and ranges of various business organizations, such as micro, small, and medium-sized enterprises, highlighting their market share and operational strategies. The report delves into organizational structures, including functional and divisional structures, and their applications in different business contexts, particularly focusing on Tesco's divisional structure. Furthermore, the report utilizes the PESTLE model to assess external environmental factors influencing businesses and applies SWOT and Porter's Five Forces models to analyze Tesco's strategic position. The report concludes by explaining the interrelationship between strengths, weaknesses, and external macro factors, providing a holistic view of the business environment.

Business and Business Environment

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................1
Part 1................................................................................................................................................1
1) Diverse categories and intention of business organisation......................................................1
2) Dimension and range of a variety of business organisation....................................................2
3) Organisation structure and functions.......................................................................................3
PART 2............................................................................................................................................5
4. PESTLE model........................................................................................................................5
5. SWOT and Porter's five Force model of Tesco.......................................................................7
6. Explain how strength and weakness interrelate with external macro factors each other........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals....................................................................................................................10

INTRODUCTION
Business environment is described as atmosphere that signifies both micro and macro factor
which enforces functions and profit of company. It involves government, subordinate, user as
well as technology and so on that affect business organisation so that it is vital to maintain
alteration according to necessity. In this assignment the companies which are taken into account
such as public, voluntary as well as private. Therefore TESCO is considered as a private
organisation in addition to this Crown prosecution is determined as a public as well as Oxfam is
considered as voluntary business organisation that assists in gaining more and more knowledge
in relation to various class of company in UK and some another country. Apart from this there is
an appropriate interconnection among the function of organisation is determined in the
assignment. At last there is interconnection among strength as well as weaknesses of external
environment is mentioned in this report.
Part 1
1) Diverse categories and intention of business organisation
In present contexts it is said that there are wide range of organisation that carry out their
business at various level determining various range of contribution to the business organisations.
This is covered in relation profitable organisation, not for profit as well as voluntary organisation
that satisfy the changing necessity of user based on responsibility of contributions which is
provided by business organisation. The government as well as individual person both who
operate their business for creating more and more money and bring stability in relation to
economy of country. Therefore there are various category of business organisation which is
given beneath:
Profit organisation this is considered as the type of business organisation who focuses on
marketing of their goods as well as services for earning money. The primary purpose of company
is to gain profit for survival and maintenance of business organisation during the particular phase
of time period. These are considered as that company that focuses on increasing the entire
development of job opportunity which is given to the individual person for filling the available
job vacancy. For instance the company such as TESCO provide user with various variety of
clothes. Away from this the primary aim of this company is to provide innovative goods to its
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user for carry out their organisation in an effective manner. It aids assistance in beating
competition against the rivalry such as Marks and Spencer, Zara as well as many more.
If it is talk regarding non-profit organization then it is determined as the industry which
continuously financed by the government for enhancing the country as well as brings stability in
economic condition (Schaltegger, Lüdeke-Freund and Hansen, 2016). There is wide variety of
services such as building, legislation, roads that is provided by the government. In current time
Crown prosecution act as a public sector agency which implement criminal cases which is held
in England that is determined as a best example of this. The primary aim of business
organization is to provide support as well as advisory services in order to resolve the criminal
cases in improved manner. Beside from this the Non- governmental organization are
considered as those organization that offer variety of services of facility for enhancing and
prompting living standard and the main focus is to provide better services to the people living in
the society rather than gaining profit. Oxfam is a best example of this type of business
organization because they offer variety of services from basic food services to other services that
are necessary for increasing the standard of living of people living in the society. Rather than this
the main aim of business organization is to provide best food as well as accommodation services
according to the necessity without intention of making more and more money.
2) Dimension and range of a variety of business organisation
Large, small micro as well as middle business organisation are considered as a best
example of various range of business organisation that are available in all countries that offer to
its user with different offering. These are various kind of business organisation that signifies with
various dimension with market share as well as other things that remain differ from one another.
Micro organisation is determined as small division that affect the situation in relation to economy
of a country so that they provide to the user with variety of goods as well as services for survival
and maintenance. If it has been stated that small size shop signifies two or more subordinate or
director offer to its user as per their necessity. Therefore it has been stated that the market share
of these kind of business organisation is considered as low. But if it is talked about a lot of micro
companies than the market share is larger at UK. The business organisation retain their business
for a future phase of time period that affect profit as well as growth of company that is
considered as a low therefore the director of organisation focuses on survival and maintenance at
Marketplace (Gebert-Persson and Káptalan-Nagy, 2016).
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Where is a small organisation signifies the small market share but it is considered as a bigger
than micro Organisation. In addition to this the small organisation focuses on earning more and
more profit then above discussed organisation which mainly signifies the director of organisation
have more than 3 or 4 store with at least 5 subordinate. The growth and development of business
organisation is remaining Limited that signifies the small level organisation can conduct their
business in Limited area only. Hence every person of UK want to become a successful for
operate their business that imposes favourable effect on the economic situation of the country.
Medium size organisation has bigger market share than above-mentioned companies in the
country named as UK. The profit of this kind of organisation remains higher because they
operate their business as national or international level. They provide superior quality product to
its user for gaining competitive benefits among rivalries. It is determined as business
organisations that want to sustain for bigger time period because of level of competition are the
multinational business organisation such as MNC’S. For this process TESCO is determined as a
best example that carries out their operation and function of Organisation in various countries
like Asia and Africa. Due to wide range of the outlet that helps company in gaining profit
(Falkner, 2017). Therefore the business organisation provides job and government provide their
support in order to sustain and increase their brand value at multinational scale. Growth is
connected to extension of the business organisation suggest Tesco needed to grow their business
for enhancing whole growth and development of organisation.
3) Organisation structure and functions
There are various kinds of organisational structure such as functional, project, Matrix, and so on
that business organisation can use based on their overall size. If it is stated regarding micro level
then the structure of organisation which is followed by the director is functional because they
have a limited number of subordinate through which they have a direct communication at micro
level. It has been stated that the scope of business organisation are extremely small to operate at
Global market the structure that must be followed is considered as a functional because it is
considered as a two way communication among Limited number of subordinate. Whereas if it is
regarding small organisation then the subordinate of organisation, it signifies that they also
comply functional matrix. In addition to this if it is talk about the scope of business organisation
their alteration is not done easily and the director of business organisation mostly used functional
structure because it is considered as a simple method of transferring the data as well as
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information from authority to lower level management. In assistance of this, the middle
organisation then the market situation, size, scope and they are the different strategy that
considers transfer of subordinate in different department. And this is the element which brings
uncertainty and this kind of company use organisation structure named as project because has a
great level of competition at market place. Beside from this the scope of business organisation
remains and that directly provide competitors to organisation for expanding or boosting their
organisation in an industry. Therefore it has been stated that the scope of business organisation
remain by using project organisation structure. There is retail organisation which is named as
Tesco under large business organisation use division organisation structure for operate business
at global level. Thus, it has been stated that the resources which are utilised effectively or in
improved manner as well as the position of organisation is managed for beating competitive
rivalries (Klyuev, 2017).
Figure 1: Divisional Organisation Structure
(Source: Divisional Organisation Structure, 2018)
If it has been stated that the difficulties regarding Global organisation structure signifies the
uncertainty as well as it is needed for organisation such as modify them according to necessity.
Apart from this there are various sections for implementation of various operations in improved
way. The production, marketing, sales and HR department for various or different sector that is
implemented by higher level authority of Tesco here in the member of organisation get separated
as per their capability skill as well as knowledge. It aids assistance in managing subordinates or
staff for providing effective product and services to its customers. HR department it is the
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responsibility for handling candidate for possessing enough subordinate in order to organise
different activity such as hiring, choosing, compensating as well as maintaining good
relationship with its employees and conducting effective training session that is implemented by
the management team of Tesco. It aids assistance in transferring the subordinate in other
departments it is marketing, sales as well as finance. Hence the superior are capable to build
competitive edge and satisfy the needs or necessity of individual person. In addition to this the R
and D department it is the responsibility to organise survey for collecting more and more
information regarding need and wants of public and its competitive firm. It is the duty or vital for
organisation to offer the goods as well as services according to necessity of individual person.
Tesco is considered as a retailer in which the R and D team focuses on organising effective
research in order to gain more and more knowledge about trends in the market. It aids assistance
in providing innovative products as well as services for attracting user at market (Yang, 2017)
Marketing department plays an important role in which they focuses on providing
information related to product as well as their services to its user. It is necessary to make
effective marketing plan in which marketing mix, budget, target market and other data or
information is discussed. There are 7 P's of marketing mix price, place, promotion, product,
people, physical evidence and process which is discussed by marketer. In addition to this
advertisement, publicity as well as sales promotion are also organised by them that aids
assistance to marketer in influencing the consumer of providing product as well services of
Tesco. For this purpose the finance manager focuses on coordinating the decision of every
department in order to conduct the activity and function of marketing in an improved manner.
PART 2
4. PESTLE model
PESTLE analysis described as a Framework that is adopted for assess the marketing
situation of a company that is related to external environmental factor such as technological,
economic, political, legal, social and environmental that affect the company. In current time the
business which is selected as a chain of supermarket named as Tesco, Sainsbury’s, Marks and
Spencer and so on that is determined as biggest Organisation located in UK. And also they
expand or boost their business at Global scale. The environment of business determines
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uncertainty in conducting or organised their working within organisation. It has been stated that
it is necessary or needed to be make changes within production facility for beating against
competent rivalries of business organisation.
Political factor: There are various government policies, tax, licence as well as many more
that is necessary to regulate for conducting or carry out business in retail sector. This is the good
example of this because they adopt their approach related to cost cutting in which they cut down
400 employment from 2500. This is because the government order them they increase the
employment security and provide the safety or security policy in related to health that adversely
impacts them. The UK Government is very essential to take effective or improve decision which
is taken by organisation that is under retailing industry (Elias and Etim, 2017).
Positive impact: Due to stability in political condition of UK within retailing industry they
run their organisation by providing different number of method related to cost cutting it assist to
organisation to increase their job offering as well as hiring new candidates with new minds.
Negative impact: There are around 300 individual who are living from the job as per the
requirement of the government that imposes negative impact on the retail industry and it is
difficult for company for conducting their business in an improved manner.
Economic factor: It includes factor such as exchange rate, growth, inflation and interest rate
which based upon the economic situation of UK. If there is any change in above mentioned
factors such as interest rate as well as inflation rate is the directly affect the company that carry
out their business in retail sector. The Tesco is considered as a best example and they can find
various type of issue related to profit when they close their number of outlets and reject the
employment of various subordinate at different outlets (Arnold, Beauchamp and Bowie, 2019).
Positive impact: Due to increase in the GDP rate of UK it imposes positive impact on the
operations or activities of retail sector and the buying behaviour of consumer is extremely high.
Negative impact: Due to increase in the interest rate it imposes negative impact on the
performance level of organisation that operates their business as retail sector of UK.
Social factor: It involves feeling, perception, and taste and so on which enforces direct influence
on performance of retail sector of UK. Therefore it is necessary to provide user with innovative
goods at negligible price for becoming successful in short period of time.
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Positive impact: Tesco is considered as an organisation that carries out their business in
retail sector of UK and operate the business at global level and they offer superior quality goods
to its user as per their requirement or necessities.
Negative impact: Due to frequently change in the taste as well as preferences of consumer
it is quite hard for Tesco to handle the innovation as well as price or cost of goods as well as
services which is provided to its user.
Technological factor: It is considered as the other factor that considers advantages of technology
within overall retail industry for operating their business in improved manner.
Positive impact: The organisation focuses on adopting innovative technology that helps the
consumer in the process of billing. It provides opportunity to its user to buy goods in better
manner as well as in quick way (Whyte and Lohmann, 2016).
Negative impact: Here in there are wide ranges of subordinate who do not have the
knowledge regarding advance technology that bring in Retail Industry imposes adverse impact
on the level of performance and employee get jobless in short span of time period.
Legal factor: This factor is covered with laws as well as legislation that is given by government
and provide advantages to the Retail Industry as well is Impact both positive and negative in
similar time.
Positive impact: Due to Brexit it imposes good impact on the business such as Tesco and
provides them opportunity to improve margin.
Negative impact: Various actions which is taken by the government due to Brexit so that the
employee start resignation from the employment which adversely affect the chain of
supermarket.
Environmental factor: The Other element of environmental factor which is connected with
pollution as well as healthy environment the organization focuses on providing the product and
services which increases the standard of living of people in the society which positively affect
the company. On the other hand due to increase in pollution it is harm the environment is
negatively impacted on the company.
5. SWOT and Porter's five Force model of Tesco
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SWOT Analysis of TESCO
SWOT is a Framework which is adapted to identify weakness, opportunity, threat as well
as strength. The result of this assessment signifies the competition at market place that is
enhanced through improved strategy or tactics (Trad and Kalpić, 2017).
Strength: Tesco is considered as a well-known brand that cover the area approx 30%
there are around 6800 outlets in approx 14 countries is considered as the main strength for the
company in addition to this they operate their business in variety of goods in different store such
as non food items. It has also been stated that it is known as job generator that has generate the
employment of 743000 around the world. Apart from this there adopt advanced technology in an
improved way that increases the level of experience of shopping of different user and they also
launch RFID system to make correct counting of the buying product in an automatic manner.
Weakness: In addition to the strength there are some weaknesses of Tesco Company
such as they started their operation in the market of Japan but they are not survived at the
Marketplace. They are failed to export the needed goods in the Global market. For this process
they have charged large amount of penalties or fine for the false declaration or misrepresentation
of revenue. It imposes negative impact on the profitability of the organisation and it is reduced
by 9% that decreases reputation of company (Schlesinger and Rahman, 2016).
Opportunities: The main advantage for Tesco is to operate their new outlet which is
named as Jack there their main purpose is to target customer by giving them necessary discounts.
The organisation has also performed different alliances with variety of brand to generate
innovative Store. For implementing advanced technology it is necessary for organisation to take
entrance in the online marketing
Threat: Due to Brexit the competition level within the Marketplace has been generated
more and more. The organisation get included in the controversies is considered as the threat for
brand image of the organisation. Moreover due to instability in the political condition of UK it
creates economic recession in the market and that eroded the sales and need of goods at market
place.
SWOT OF Sainsbury’s
STRENGTH WEAKNESSES
 SAINSBURY, main strength is that
deals with variety of products which
 SAINSBURY changed its business by
market situation which leads to lose of
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increases its market share.
SAINSBURY is older brand which increases its product
loyalty in market
customers trust.
 SAINSBURY is involved in ample
number of business which distract firm
to focus on their core sector.
OPPORTUNITIES THREAT
 SAINSBURY is developing its
business at global level through which
more profitability can be gained.
 Due to rise in competition by
competitors, it is becoming difficult for
SAINSBURY to find the resources for
products and business activities.
6. Explain how strength and weakness interrelate with external macro factors each other
Both elements play important impact on the process of business in taking effective
decision of Tesco. The strength involves proper or effective utilisation of resources or grabs
opportunities for survival in the competitive business environment. Furthermore it has been
stated that Tesco use their strength in order to minimise the threat of business organisation. In
addition to this due to some weaknesses of Tesco the element the efficiency of business
organisation but due to wide opportunity at business organisation in relation to growth and
development that increase profit. Furthermore that is connected to the recession at a global level
and it boosts the level of competition within market. In addition to this the ability of organisation
gets eliminated in order to minimise the threat which directly affect the operations or functions
of the business organisation. There are various government policies, tax, licence as well as many
more that is necessary to regulate for conducting or carry out business in retail sector. This is the
good example of this because they adopt their approach related to cost cutting in which they cut
down 400 employment from 2500. This is considered as a weakness of company from which
TESCO wants to overcome in order to implement strength in improved manner (Awa, Ojiabo
and Orokor, 2017).
Strength and weakness interrelate with external macro factors at depth. Interelation
between them are mentioned below-
SWOT/PESTEL INTER-RELATION
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Political Factors- In this factor, TESCO is getting affected at wider level which is
Weakness of organisation because it is not possible for firm to carry out their functions and
operations in proper manner.
Economic Factor- Further, as country have stable economy infrastructure of TESCO
work smoothly and effectively as well as they have opportunity to expand their business at
international level.
Social factors- In this, another weakness of TESCO is Social factors because company
has to conduct market research for marketing and advertising the product accordance with social
factors such as standard of living, income etc.
Technological- Then, in relevance with TESCO firm uses upgraded online management
system which is opportunity for them to access customer’s information and target new market in
easier manner.
Environmental- This is also interrelated with internal factors as because TESCO deliver
products without using plastic which is being taken as strength of firm and competitive
advantage.
Legal- In this, involvement of government is high because of running business under rules
and regulation which leads to disrupts and threats to the business if problem or issue occur in
process.
CONCLUSION
On the basis of given report it has been analysed that the private, public as well as
voluntary are the different types of business organisation. These are the organisation that has
various scope, size as well as objective and purpose. It involves government, subordinate, user as
well as technology and so on that affect business organisation so that it is vital to maintain
alteration according to necessity. In addition to this the human resource operations marketing
finance as well as R and D they are the department which is interrelated with one another. The
business environment is considered as the integration of both micros as well as macro
environmental factor which impact the functions and operation of organisation. They affect as
per the size, scope, kinds of product as well as services provided by Tesco. Therefore the
supervisor is very essential in integrating or combining this entire factor in such a manner that
provide profit in upcoming phase of time period. It is also necessary to know the strength as well
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as weakness of Organisation in taking correct decision, executing that decision and strategy
chosen for accomplishing the objective.
REFERENCES
Books and Journals
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment, 29(3), pp.264-289.
Gebert-Persson, S. and Káptalan-Nagy, E., 2016. Legitimacy in the business network context.
In Extending the Business Network Approach (pp. 301-314). Palgrave Macmillan, London.
Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Klyuev, A.K., 2017. University in the Business Environment of the Region as It is and as It
Should Be. University Management: Practice and Analysis.
Yang, J.S., 2017. The governance environment and innovative SMEs. Small Business
Economics, 48(3), pp.525-541.
Elias, I. and Etim, O., 2017. Traditional Budgeting in Today’ s Business
Environment. Journal of Applied Finance & Banking, 7(3), pp.1-7.
Whyte, R. and Lohmann, G., 2016. Airline business models. Air Transport Management: An
International Perspective; Budd, L., Ison, S., Eds, pp.107-121.
Schlesinger, P.A. and Rahman, N., 2016. Self-service business intelligence resulting in
disruptive technology. Journal of Computer Information Systems, 56(1), pp.11-21.
Ledgerwood, G. ed., 2017. Greening the boardroom: Corporate governance and business
sustainability. Routledge.
Awa, H.O., Ojiabo, O.U. and Orokor, L.E., 2017. Integrated technology-organization-
environment (TOE) taxonomies for technology adoption. Journal of Enterprise Information
Management.
Trad, A. and Kalpić, D., 2017, June. A Neural Networks portable and Agnostic Implementation
Environment for Business Transformation Projects the basic structure. In 2017 IEEE
International Conference on Computational Intelligence and Virtual Environments for
Measurement Systems and Applications (CIVEMSA) (pp. 153-158). IEEE.
Arnold, D.G., Beauchamp, T.L. and Bowie, N.E., 2019. Ethical theory and business. Cambridge
University Press.
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