Business Environment Analysis Report - Business Environment

This report provides a detailed analysis of the business environment, focusing on Tesco as a case study. It begins with an introduction highlighting the importance of monitoring the changing business environment for large firms like Tesco. The report then delves into the external environment using PESTLE analysis, examining political factors (Brexit, international relations), economic factors (cash crunch, economic downturn), social factors (unemployment), technological factors (online purchasing), legal factors (consumer and employee laws), and environmental factors (green supply chain). Following the external analysis, the report conducts an internal environmental analysis using SWOT analysis, identifying Tesco's strengths (brand recognition, resources), weaknesses (poor subsidiary performance, lack of research), opportunities (strategic alliances, online business), and threats (economic downturn, competition). The report concludes by summarizing the challenges and opportunities Tesco faces, emphasizing the impact of both internal and external factors on the company's decision-making processes, with references to relevant academic sources.

Business Environment Analysis

INTRODUCTION
In the modern day business, keeping an eye on
the changing business environment has become
very much necessary (Jones, Hillier and
Comfort, 2011). Tesco being a larger firm needs
to manage its operations in an appropriate
manner. It is having large amount of resources
which will help in effectively managing their
business operations and to ensure long term
growth.

External Environment
In order to understand the environment of the
company, it is essential to analyse different factors
that are affecting their business. PESTLE analysis
will help the firm in analysing the external
environment.
Political
• Brexit
• Change in political relations with other nations.

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Economical
• Cash crunch and credit
crisis.
• Downfall in economic
condition of Europe.
• Reduction in purchasing
power of people.
Social
• Increasing unemployment
• Reduction in mass purchase

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Technological
• Online purchase
• New Entrants
Legal
• Consumer and
employee related laws
have strengthened
• Environment related
laws have strengthened

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Environmental
• Green supply chain management
• Waste management

Internal Environmental
Internal environment analysis is as compulsory
as external environmental analysis. This is
because it helps them to understand the strengths
and weaknesses of the firm that helps the firm in
managing the changes in the external
environment (Hoskin, 2011).
Swot Analysis is an effective tool for this.

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Strengths
• Awards and brand recognition
• Size and Resources
• High cash reserves
Weaknesses
• Poor performance by
subsidiaries
• Lacked research
• High inventory cost
• Less penetration outside
Europe

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Opportunities
• Making strategic bounds
• Joint ventures
• Online business
Threats
• Downfall in the economy
• Retail giants are entering
in Europe
• Increasing Cost of
operations

Influence of internal and external environment on decision making process
Some of the ways in
which internal and
external environment is
affecting the business
process:
• Increasing people
involvement
• Innovative decisions
• Artificial Intelligence

CONCLUSION
• Tesco is facing challenges from the changing business
environment.
• Political, social and economic challenges have increased for
Tesco. Technological and legal environment are in the
favour of the company.
• Company has a big brand name and huge amount resources
which they can use for expanding their business in other
parts of the world as this has been their weakness over the
years.
• All the internal and external environmental factors are
affecting the business process in the country.

REFERENCES
Jones, P., Hillier, D. and Comfort, D., 2011. Shopping for
tomorrow: promoting sustainable consumption within food
stores. British Food Journal, 113(7), pp.935-948.
Sparks, L., 2014. 07 tesco’s supply chain
management. Logistics and retail management: Emerging
issues and new challenges in the retail supply chain, p.149.
Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in
corporate sustainability reporting within UK retailing. Journal
of Public Affairs, 16(1), pp.81-90.
Beckett, A., 2012. Governing the consumer: technologies of
consumption. Consumption Markets & Culture, 15(1), pp.1-18.

CONTINUE
• Foster, M.J. and Noh, T.J., 2013. Tesco strikes out into Asia. Frontiers
of Business Research in China, 7(2), pp.289-310.
• Hoskin, P., 2011. Why business needs to green the supply
chain. University of Auckland Business Review, 13(1), p.16.
• Kew, J. and Stredwick, J., 2017. Business environment: managing in a
strategic context. Kogan Page Publishers.
• Page, M., 2014. Business models as a basis for regulation of financial
reporting. Journal of Management & Governance, 18(3), pp.683-695.
• Pearson, D., Henryks, J., Trott, A., Jones, P., Parker, G., Dumaresq, D.
and Dyball, R., 2011. Local food: understanding consumer motivations
in innovative retail formats. British Food Journal, 113(7), pp.886-899.