Case Study of Tesco: SWOT and Porter's Five Forces

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BUSINESS and BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION............................................................................................................................. 3
PART1............................................................................................................................................ 4
LO1.............................................................................................................................................4
SIZE AND SCOPE OF THE ORGANIZATION..................................................................................5
ORGANIZATIONAL STRUCTURES................................................................................................7
CONCLUSION........................................................................................................................... 10
LO2.............................................................................................................................................. 11
PART2- CASE STUDY.....................................................................................................................14
LO3............................................................................................................................................... 14
PESTLE ANALYSIS ON THE RETAIL SECTOR OF UK....................................................................14
LO4............................................................................................................................................... 18
SWOT ANALYSIS.......................................................................................................................18
PORTER’S FIVE FORCES............................................................................................................ 20
CONCLUSION............................................................................................................................... 22
REFERENCES.................................................................................................................................23

INTRODUCTION
This assignment is based on the business and business environment which explains the factors
affecting the business. This assignment will define various types of organizations that are
managed in the business world. The scope, size, purpose of the different business is discussed
in this assignment. The assignment will explore the retail sector of UK with help of a PESTLE
analysis Further the assignment has a case study which on a particular UK supermarket for
which a SWOT analysis will be done (Lipset, 2017).

PART1
LO1
DIFFERENT TYPES OF ORGANIZATIONS
There are different types of organizations that are working in the business world with different
objectives and purposes associated with it with different products which are offered by the
company. The following are the different types of organizations:
Private sector organizations: The private sector organizations are also known as profit-oriented
organizations which are any partnership, corporation, person or agency that is being operated
privately with the purpose of making a profit. There are so many private sector companies and
major companies are into I.T, Retail, FMCG and Banking sector (McAlearney et al., 2017).
For example, Greenergy is one of the biggest fuel company in the UK
Products: The Company produces fuel products like petrol and diesel for motor vehicles.
Purpose: The purpose of the company is to become one of the topmost fuel producing
company in the UK with the aim of earning more and more profit
Public sector organizations: The public sector organizations are those organizations which are
owned and operated by the government. These organizations are somewhat similar to the
voluntary organizations but they work for earning profit out of the business.
For example BBC (British Broadcasting Company)
Purpose: the purpose of the organization is to work for the citizens along with making money
Products: The company is offering broadcasting, Radio and Web portals and the services are
offered on television, radio and online.

Voluntary Organization: The voluntary organizations are those organization work for charity.
These organizations are non-government organizations and they work for a particular cause
(Booth, 2018).
For example British Heart Foundation
Purpose: The purpose of the voluntary organization is to provide welfare to society and help
people suffering from major heart disease. The organization is working for the treatment of the
chronic heart and circulatory diseases so that the deaths caused due to heart problems.
Services: The treatment for the chronic heart and circulatory disease.
Basis of difference Private organization Public organization Voluntary organization
Ownership They are owned
privately in a
partnership or by a
single owner
Owned by the
government
Voluntary organizations
are owned by the
community
Purpose To make a profit To make a profit The welfare of society
Services/products Depends on the
business of the
company
Services Services
Example Greenergy makes fuel
products
BBC British heart foundation
SIZE AND SCOPE OF THE ORGANIZATION
There are different types of organizations that are present in the business world which is
working on different scales which area s follows:
Microbusiness: These are the business which is the essence of every economy as they are the
most vibrantly growing business in the economy. The micro businesses have low investment
and have less than 5 employees working in the business. The examples of micro business are
catering, house cleaning, event planning etc. the legal obligation in a micro business is very low
(Martin, 2016).
Market share: In the last few years it has been observed that the number of micro businesses
has been increased by 6% making it around 4.8 million in total in the UK

Profit Share: The profit share of the micro business has shown tremendous growth and it has
contributed about £3.1 billion in the UK’s economy.
Growth and sustainability: The growth of the microbusiness is very rapid and sustainable in
nature also. Almost 90% of the turnover is generated by the agriculture, forestry and fishing
sector.
SMALL OR MEDIUM SIZED BUSINESS: The small business is the business which is operated and
owned by a single or more person. The maximum number of employees working in a small
business is 100-150. The revenue generated out of such business is low as compared to the
normal sized business.
MARKET SHARE: According to market research it was found that the department of business,
energy and industrial strategy is under the small business which has almost covered 99.9% that
is about 5.7 million business in the UK.The small business employs up to 250 employees who
are accountable for almost 60% of all private sector jobs in the UK. The small-medium sized
business has contributed about £2.0 trillion in the UK's economy which is almost 52% of the
total private sector turnover.
GROWTH AND SUSTAINABILITY: The small and medium-sized business has shown tremendous
growth in the last few years have generated a good rate of employment in the country. The
major part of the UK economy is being uplifted by the small and medium-sized business
organizations
Large enterprises: large enterprises are the organizations which work on a very huge scale and
employ at least 5000 employees in the organizations. The turnovers of these large enterprises
are more than 1.5 billion euros.
Market Share: There are approximately 8000 large enterprise business in the UK which have
more than 250 employees accounting for 0.1% of the business. The large business has about
48% of the turnover in the economy of the UK

GROWTH AND SUSTAINABILITY: The large organizations have not shown that much growth as
compared to the small and medium-sized business in the UK but the large enterprises have
generated moderate employment
ORGANIZATIONAL STRUCTURES
There are the various different organizational culture that is found in different organizations
depending on the size of the operation. The following are the different types of organizational
structures found in the business world:
Hierarchical structure: This is the most popular type of organizational structure which is
followed in most of the organization where a proper flow of orders and communication is being
followed. There is one clear supervisor who gives clear orders to the subordinates and
hierarchy is followed. The level of complexity ys prevails there but it not much complex as
compared to a network structure
For example
Figure1: Hierarchical structure
Source: Cumming, 2016
Flat structure: This is the organizational structure which is followed in most of the small
organizations like start-up companies generally this type of structure is followed in the early
stage of the organizations. Middle-Level management is mostly eliminated in this type of
organization. The level of complexity is very less as the middle-level management.

For example, Marks and Spencer which is a leading brand in retail in the UK follows a flat
organizational structure (Pontefract, 2016)
(Figure2: Flat organization Structure)
(Source: Pontefract, 2016)
Network Structure: This type of network is found in many organization most of the I.T
companies have this type of organizational structure. In this type of structure, there is less
hierarchy and it is of more decentralized in nature this makes it more flexible in nature. This
type of structure relies on the clear communication and reliability of the employees. Using this
type of network structure results is high complexity as there is rapid communication among the
employees which leads to ambiguity. For example, H&M uses this type of network in the
organization to make sure that everything in the organization is in sync.
Figure 3: Network structure
Source: Farrell, 2016

COMPLEXITIES IN TRANSITIONAL, INTERNATIONAL AND GLOBAL ORGANIZATION
The level of difficulties differ from the organizational structure of the company which leads to
the complexity of the business which is as follows:
International business:
The businesses which are into an international market are aggressively into the imports and
exports of the products. They do not enter into direct selling of the products and services in the
international market. Such business doesn't go for direct investments in the parent country.
The small manufacturers are the best examples of this type of business where they also provide
customization of products and services to the local customers and the neighbouring countries.
The level of complexity in such international business is very high.
Multinational Business:
The business working on a multinational level has more complexities as they are into direct
investments in the parent country of the business. The major part of the business relies on the
customization of the products and the services offered to the customers and the decision for
further buying and selling is in the hands of the host country.
Global Business: Such business formulizes different types of strategies to operate in every
country of the world. The whole world is a market place for such a business. The management
has the full authority to take the decision related to the investment, customization, meetings
etc (Peng,2018).
Transactional business: The transactional business operates in every market whether it is an
international market, national market or international market. The transactional business
focuses on the coordination of the local market activities and follows a very complex strategy to
invest in the foreign market.

CONCLUSION
From the above analysis, it can be concluded that the different types of organizations have
different aims and objectives with different proposes offering different types of products and
services to the customers. The organizational structure of these organizations is set in
accordance with the objectives and aims of the organization.

LO2
Organizational structure: Organizational structure can be defined as a framework to manage
the functions, operations, and activities of the business unit. This structure also comprises of the
exchange of communication and interaction within the different layers of the organization.
There are several organizational structures defined to manage the business activities of the
organization as the functional, divisional, futarchy and matrix representation. Any of the
methods can be used to manage the functions of the supermarket chain of the UK. There are
several supermarket chains in the UK and they are ASDA, Tesco, etc. and in the present context,
they are facing the problem of reduction in the number of job positions available in the market.
And the organizational structure used by them is functional and divisional (Winnubst, 2017).
Divisional organizational structure:
This is the part of hierarchical organizational structure in that the divisions took place in the
organization as per the products in the market as the organization Tesco has different divisions
for the retail, marketing, international and local divisions. And every division of the organization
manages the different sets of organizations.
Sales and marketing division: the sales and marketing division deals with the promotion of the
recent and prospective products and services of the organization. And this department is
responsible for promoting the product in the international market in a profitable manner.
Commercial division: in the commercial division the activities and the operations to promote
the growth of the business and translation of new business ideas takes place. In this division of
the Tesco branding strategies prepared as per the need of the business (Padmanabhan, 2018).
International division: the international division of the organization deals with the activities and
business operations that take place outside the organization's home country. This division of the
organization deals with the clients as per their local needs and also formulates country-specific
policies.

Functional organizational structure
The functional organizational structure deals with the functional role in the organization and
deals with factions of the workforce. This is also part of the hierarchical organizational structure.
And the organization Sainsbury is the UK based super chain market and also active in the other
areas as banking finance, agro, etc. and it uses the functional structure.
HR function: this function in the organization deals with the recruitment and the following
process; it also deals with the employee-centric policies and performance measurement as per the
policies of the organization.
Finance and accounting: this part of the organization deals with the marketing and finance
operations of the organization. This function is managed by the accounts and finance managers,
executives and supervisions. They are responsible to manage the activities related to the
transaction of the business, management of the budget and the salary of the employees. It also
deals with the funds of the organization (Mohammed, 2018).
Marketing function: the marketing function deals with the marketing and promotion of the
products and services; it also included campaigning and promotional activities in order to
promote the growth of the business and make the business more profitable.
Customer service; the CSS is responsible to address the grievance of the organization’s
consumers across the globe and also report to the senior level leadership and provide valuable
feedback for the product modification.
So, these are the Organizational structure used by organizations like ASDA, Tesco, and
Sainsbury in order to manage their business and promote profitability. And the pros and cons of
this two are as follows:
Advantage
 The divisional structure helps the organization in distributing the tasks as per the demand
of the products and the services in the market. And the functional structure helps in the
allocation of the tasks as per the need of the organization and also according to the
preferences (Mohammed, 2018).