Comprehensive Business and Business Environment Analysis: Tesco PLC

This report provides a comprehensive analysis of Tesco PLC's business environment, encompassing the types and purposes of private, public, and voluntary organizations, along with their legal structures. It delves into the size and scope of various organizations, with a specific focus on Tesco, NHS, an...Read More

Business
And
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure . 1
P2 Size and Scope of various types of organisations.............................................................4
TASK 2............................................................................................................................................6
P3 Interrelation between organisational function and organisational objectives...................6
TASK 3 ...........................................................................................................................................7
P4 Positive and negative impact of macro environmental factors upon the business............7
TASK 4 ...........................................................................................................................................9
P5 Internal analysis of Tesco and its influence in decision making process..........................9
P6: Interrelation of weakness and strengths with macro environmental factors..................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business is defined as an economic system where goods and services are delivered to
customer in order to earning money. In addition to this, it is referred to an activity which is done
by number of workers for an organisation in order to achievement of organisational goals.
Whereas, Business environment is represented as the geographical area in which action are
carried out in effective and planned manner. In present assignment the taken company is Tesco
plc it was founded by Jack Cohen in 1919. It deals in groceries and has a huge brand image as a
merchandise retailer with headquarter in UK. In this report, it describe about the various
organisations along with their size, scope, vision and mission. This report is also includes the
relationship between various functions and objectives of organisation which have to achieved by
them. In addition with this it is also discuss about the positive and negative affects of
environmental factors along with their strengths and weakness with their relationship.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
In the current scenario there are different type of firms who are working for their preset
objectives and goals which is profitable for them in order to achieve strong business concern
position in the economy and marketplace. Due to this, they can easily contributes in wealth of
nation (Asif and et. al., 2011). The wealth of UK is based on such type of organisation as their
large-scale investment and net profit which will be utilized by government in position of tax and
duties. The main types of organisation are explained as under:
Public organisation – This type of organisation provide services to the users in less prices or by
charging less on their services. These firms are monitored and controlled by the government. In
the public organisation the taken organisation is NHS which is providing health services across
the world.
Purposes of NHS
 To deliver best quality of services to the patients
 To offer quality services to their patients which makes strong image of the organisation
in mind of customers.
 To improve the physical well being of the public.
Legal structure
1

 Central government – It contains all the department which is responsible for keep law
and command of a nation.
 State government – It controls and maintains laws and order to state. It has
responsibilities to solve the issues and necessitate of a state.
 Local government- They are maintaining all the work and monitors a small portion of
area such as a city or town.
From the above legal structure, it has been analysed that NHS is performing its duties as
public organisation and its funds are generated through support of government so that it can be
said that company can take high growth in future.
Voluntary organisation- These type of organisation have a specific objectives which is
created by a group of persons or volunteers for achieving the predetermined objectives. These
works are usually connected with welfare and development of overall society. It is also called as
a non profit organisation. This type of organisations have to registered from local government
before starting any activity or operations in the country. In this assignment the taken organisation
is Oxfam whose main objective is provide charity to those community who are economically
backward in order to overall development of the society (Bridge and O'Neill, 2012). The Oxfam
was established in 1942 at Oxford, UK. They have 20 charity organisation who are working with
an objective of eliminating poverty and build a develop nation. The organisation is also
providing supports to the victims of natural disasters such as Tsunami, flood etc.
Purpose of Oxfam
 To build a nation without poverty.
 To provide necessary facilities for economically backward people of the nation
 Organisation runs various educational programmes for creating awareness of education in
the economically backward residential of nation.
Legal structure
 Trust – This kind of organisation doesn't need any relationship it is created by a group of
people.
 Association – It is a group of individuals who are working for organisational objectives
without making any profit.
2

It has been analysed from the above legal structure OXFAM is a large NGO which is
operating its functions in several nations like India, UK, china etc. therefore, it can be said that
company can easily fulfil the needs of needy people of different nations of the world.
Private organisations
It is defined as the firm whose shares do not offered to the public and it is less controlled
by the government. If the organisation is owned by the occupier of UK and it has been followed
various rules, modulate and ideas which are formulated by UK government. This is the most
beneficial component for the development and evolution of UK economy as they are giving
occupation to big group of residential which will maintained the growth and sustainability of
economic system with enhancement of literacy level. (Burke and et. al., 2012).
The private company chosen for the report is Tesco plc and which is running its
operations all around the globe and classified under one of the largest retailing companies. They
are mainly deals in grocery and have a huge brand image as a merchandise retailer which was
established in 1919. Tesco provide quality products and services to the customers as per their
requirements.
Purpose of Tesco plc- It mainly focused towards offering quality products to their
customers in order to maintain their living standards.
 To maintains various campaigns which spreads awareness about the healthy foods in
order to growth and development of human body.
 To offer economic affable products to all their clients
Legal structure of private company
 Partnership: under this type there are two business owners who join together to run a
single business then it is termed as partnership. Due to this, firm can achieve profitability
easily.
 Sole proprietorship: In this type of structure there is single business owner who runs all
the business activities according to their set plans and all the benefits and financial loss
are bear by them.
 Limited companies: These are half controlled by the government authorities so their
trust is maintained in the public. due to which owner have the full authority to regulate
the business activities and they have less liabilities then government shareholders
(Charles and et. al., 2017).
3

 Multinational companies – MNC are operated their business activities at large scale in
terms of more than one country. They have headquarters in a specific country which
regulates all the business units in other countries.
 Global company- Under this, a company spreads their products and services in various
countries across the world with a single brand name. Headquarter has responsibilities to
make policy and strategies for marketing the products.
 Transnational company- This type of companies also operates their business activities
in more than one country but they have not any specific headquarter.
From the above legal structure of private companies, it has been identified that company
is performing its operations as a multinational corporation in the world so that growth
opportunity for Tesco is higher as compare to its rivals.
P2 Size and Scope of various types of organisations
There are several types of organisation who have different visions, missions and scope so
the most essential factor for business organisation is connected with analyse the employed in
order to achieve effectual results. The size and scope is well-defined accordant to the necessitate
of firms. The scope and size of business is explained as under:
Tesco plc.
 Size- Tesco operates their business activities in more than 7 countries with more than
6000 stores. They have more than 450000 em_m1ployees working within organisation.
According to the financial report of Tesco plc the revenue of company was £55.9 billion
in 2017. Tesco merges with various type of small organisations in order to expand their
business (De Geus, 2011).
 Scope: Tesco provides better product quality to their customers which builds their brand
image in marketplace. Due to effective pricing policy their customer attracts towards
their products easily. They are working according to business mantra which is given by
their founder Jack Cohen that was 'Pile it high, Sell it cheap' due to this they easily build
a good image in customer's mind.
 Vision: This is defined as the long term goals of business firms. Their important
objectives are linked with satisfying different needs and wants of customers. The vision
of company is “To satisfy diverse needs of customers by providing them high quality
products.
4

 Mission- The mission of Tesco plc is “to become the highest leader in retail industry by
turn their visitors into their regular customers by providing value of money to them”.
NHS
 Size: In health sector, NHS is a big organisation which is controlled by the government.
The company was established in 1948. It offers free services to all residential. There are
more then 2.5 million people who are working in order to provide health services to their
customers (Doppelt, 2017).
 Scope: The firm is moving its business activities at big scale therefore, it has big number
of workers who are working with it in order to provide services to its customers. It also
offers free medical services to all the local population as well as visitors.
 Vision: To provide solutions to the problems due to which people are suffering in order
to provide them comfort”.
 Mission: their essential mission is “ provide services in the nation with giving
effectiveness in services at low cost” it provide assistance in improvement of living
situations of the residential. (Holcombe and Ipate, 2012).
Oxfam
 Size: This firm is one of the biggest voluntary organisation in UK with 20 charity trust in
all over the country. The organisation has more than 1200 trusts with 20000 volunteers in
order to improvement in welfare of residential. Their employees are working for
improving economic conditions of economically backward people.
 Scope: The range of firms is linked with achieving its goals and objectives in the desired
time period that have been allotted to them.
 Vision: The vision of company is “Give employment to public in order to take out
poorness from the system.”
 Mission: The main mission is “provide better living standards to residential of London”
thus, they can easily spend their livelihood.
5

TASK 2
P3 Interrelation between organisational function and organisational objectives
Illustration 1: Online:Organisational Chart of Company
Source: Online:Organisational Chart of Company, 2013
There are more than 450000 employees are working in Tesco plc in various countries for
achieving the predetermined goals of company. It includes marketing, operational, HR
department etc. In top level of Tesco plc there are board of directors, CEO and stakeholders who
have responsibilities to create guidelines for middle and lower level of employees by applying
suitable strategies and policies (Organisational Chart of Company, 2013). Therefore, it is
essential for Tesco to interrelate these departments for achieving goals in effective manner. The
interrelation between various departments are briefly explained as under:
HR department – It has a responsibility for recruiting skilled and knowledgeable
candidates with providing them training, salary etc. Due to this, HR manager has to take help
from marketing manager for publishing an advertisement of job requirement in both ways such
as online or offline so that, eligible candidates would apply for the job. Through this organisation
can get potential candidates which will gave maximum effort in organisational goals (Javalgi and
et. al., 2011). It gives a duty to HR department for recruiting best candidates which is fit as per
the organisation's expectations in order to use their efficiency for achieving desired objectives of
the organisation.
Finance department – It has a responsibility for providing fund to the various
departments as per their requirements in the organisation with collecting funds from various
sources. For e.g. production department wants to implement new machinery for enhancing
6

production units which will increase the revenue of the firm it can be possible when finance
department provides fund to the production department. It is essential for finance department to
providing funds to other departments so that they can perform better and contribute more
towards in achievement of their desired goals
Marketing department- It is an essential department due to which a company can
achieve growth and sustainability in the marketplace. It includes various type of promotional
tools such as advertisements, Hoardings, newspapers, radio, magazines etc. for attracting the
customers towards their products. Therefore, this activities are done through the help of funds
which is provided by finance department. Huge sales and profit are the main objectives of
organisation which can be achieved with the support of marketing department in form of
influencing buying behaviour of targeted people using marketing tools and techniques such as
TV Advertisement, Hiring celebrities etc.
Main advantages of interrelation is that it always supports the organisations in achieving
their goals in marketplace. Interrelation also helps in determining needs and wants of customers
so that through fulfilling needs and wants of customers high growth and sustainability can be
maintained in marketplace. Whereas, disadvantage of interrelation is that it creates confusion and
dissatisfaction among the employees which leads large time taken in decision making which
results in decreasing productivity and brand value of firm.
TASK 3
P4 Positive and negative impact of macro environmental factors upon the business.
Business firms who engages in providing better goods and services at various countries
have to face various macro environmental factors. Tesco operates their business activities in
more than 7 countries due to which they have to face various environmental factors such as
Political, legal, technological etc. which affects the brand image of company. These factors also
gave positive and negative impact on the organisation which is further explained as under:
Political Factors : Tesco operates business in more than 7 countries, therefore company
has to face various political issues which are connected with several rules and regulations of
these nations. Tesco should gave focus on several political factors such as taxation policy,
inflation rate, stability of the government etc.
7

 Positive impact- Company is also known as world's third largest retailer and company's
sales figures are defining that it is not only performing well in home nation but also sales
figures of firm are rising in emerging economies like India, China etc. (Rashid and et. al.,
2013).
 Negative impact- Instability of government in emerging nations can provide negative
impact on the organisation. It will reduce the sales due to which their customer will also
decreased.
Economic factors – Due to various business activities in several countries, the business
operations of Tesco may get affected by economical fluctuations. Therefore, Tesco has to adopt
suitable strategies and policies according to the countries such as inflation rates, flow of cash,
level of income etc.
 Positive impact – .Growth of BRICS economies is a positive sign for Tesco which can
support them in their economic development.
 Negative impact – BRIC economies can become threat for economic stability of Tesco
as economy of BRIC nations is not developed as compare to UK nation.
Social factors- Such factors includes the action, feeling and belief of the clients who affects the
business activities. This factors includes about educational qualification and values.
 Positive impact: Tesco should examine the activeness and requirements of endusers in
BRIC economies which will assist in rising sales and productiveness (Singh, 2012).
 Negative impact: Deficiency of understanding and knowledge regarding products it gave
harmful effect on the sustainability of firm in BRIC nations.
Technological factors- Under this factors, it includes advancement of technologies and new
machineries which provides the opportunity to company in developing innovation in products
and services.
 Positive impact- Implementation of new techniques in product development will help in
generating more revenue in BRIC countries.
 Negative impact – Advancement of tool and techniques may be costly and increase the
cost of production that can influence sustainability of firm in BRIC nations.
Legal factors- Different countries have different legal laws and legislation which should be
comply by Tesco in order to execute its business operations in particular nation. . Therefore,
Tesco has to follow such laws in order to meet the demands and requirement of customers.
8

 Positive – Tesco has to move on the guidelines which is provided by the government
such as quality standards and pricing policy of foods and other products as it helps in
running operations smoothly.
 Negative – Tesco can't implement strategies in some countries due to which their brand
image is impacted negatively in terms of quality and standard of products (Stacey, 2016).
Environmental factors – Under this type of factors, organisation is influenced in terms of
performance. There are various rules which is created by government in order to protect the
environment from various factors.
 Positive – Tesco has setup a committee with an objective of reducing carbon material by
50% till 2020 which will be helpful in increasing efficiency and productivity.
 Negative – Not attractive attention of environmental regulation which gave the wrong
impact on the brand image of company.
TASK 4
P5 Internal analysis of Tesco and its influence in decision making process
It is important for Tesco to make analysis in order to identifying strengths and weakness
of firm which helps management to make an effective decisions and suitable plans and policies
in order to removing weaknesses of the firm by enhancing strengths and opportunities.
Strengths Weaknesses
 They have a huge brand image in
marketplace and strong customer base
which is a strength of Tesco
 Quality products and services are
provided to customers
 they are using advance technology for
manufacturing products
 Lack of experienced staff members
declines ability of company to satisfy
the customer's needs properly.
 Their violates patent brings
controversies therefore, it put bad
impact on the brand image of tesco
Opportunities Threats
 Mergers with various small firms at
different countries provide
 Various legislations in those countries
where inflation rate is high is a threat
9

opportunities to Tesco
 In some countries where growth rate of
Tesco is slow there may be
opportunities of joint venture in terms
of increasing revenue.
 Improvement in online and home
delivery services may provide big
opportunities for the company.
for company. It will brings negative
impact on the organisation.
 Rising cost of raw materials will affect
the profit of company
SWOT OF NHS
Strength Weaknesses
 NHS is a highly trusted public
organisation rather than other private
health service providers
 Around 1.5 million employees are
working in the organisation that defines
good strength of firm in marketplace.
 Company is operating its functions at
large level due to which most of the
employees are dissatisfied with the
working structure of firm.
 Due to providing large services at low
prices company is facing Lower profit
margin in UK nation.
Opportunities Threats
 Forming of clear strategies can provide
growth in future to organisation.
 Efforts of large number of employees
can provide support to in grabbing
expansion opportunities.
 Due to large structure, management is
not able in adopting current trends that
can become threat for sustainability of
firm in future.
Influence of analysis in decision making process –
Tesco:
It assists management to make effective plans and policies which makes sustainability and
growth of firm in the marketplace. So, It is essential to consider the opportunities, threats and
weaknesses before decision making process. Management of Tesco should focus on the facts
10

which identifies weakness and threat to the organisation for example inexperienced staff
members is identified as weakness of company which decreases its brand image. They have
overcome it by recruiting new energetic staff.
NHS:
Conducting SWOT Analysis by the management of NHS help them in identifying their
actual strengths and weaknesses along with threats and opportunities. It facilitates them to make
decision after consider their weaknesses and threats and make corrective actions accordingly by
maximising their strengths and grabbing competitive opportunities. For an instance, the
employee’s turnover ratio is continuously diminishing due to operating NHS in large scale. Thus,
giving more attention to their employees and implement an effective HR practices help NHS in
retaining their experienced and loyal employees. Along with this, opportunities to achieve huge
growth and success in market can be grabbed through analysing market situation and customers’
preferences. Therefore, SWOT help management in making right decision for the betterment of
an organisation.
P6: Interrelation of weakness and strengths with macro environmental factors
PEST is used for analysing the challenges of macro factors in the organisation
furthermore, it gives a framework to organisation by which they can easily analyse the
environmental factors and their impact on the organisation. Therefore it is more useful to
conduct by Tesco in following way:
Political: this factors are monitored by the government in various ways such as trade
policy, trade restrictions etc. if organisation wants to maintain sustainability in marketplace it
should follow the guidelines which are created by government. Tesco doing their operational
activities as per the trade policies of ruling parties which gave major strength to organisation.
Whereas, tesco can't implement the changes which are necessary to followed so, it provide
weakness to firm. Therefore, there is a relation between strength and weakness of tesco in
political factors.
Economical: Tesco is achieve their major strength just because of their brand image
because their management maintains it with adopting changes which are related with economic
stability of firm it provide strengthen to company. But there are some falling because they can't
perform their operational activities in effective manner due to insufficiency of funds. Which gave
11

a huge weakness to the organisation. Therefore, it defines the relations between the strength and
weakness of tesco with macro factor.(Yoon, 2012).
Social – This part of macro factors are related with culture, beliefs and assumptions of
the society where business activities are performed. Tesco supplies mixture of product to their
customers with better quality which gave a major strength to the company. Whereas, the
employees of tesco can't perform their activities properly which brings dissatisfaction in the
clients of firm therefore, it is weakness of the company. So that, it is proved that there are
interrelationship between the strength and weakness of tesco.
Technological: These factors are related with using of tools and techniques. The major
strength of tesco is its huge market presence in various marketplace but there are various cases
where company can't adopt enhancement in technologies because they have inappropriate funds.
Which gave a big weakness to the Tesco. Thus, there are a close relationship among the
capability and failing of Tesco in the technological factors.
CONCLUSION
It is analysed from above report that there are various organisations who have a proper
vision, mission and scope and they have to work under the structure which is created by
organisations in order to achieve predetermined goals. Furthermore, Tesco can identifies
opportunities, threats, strengths and weaknesses by conducting internal analysis of various
factors. Macro environment will also put negative impact on the brand image of the firm which
is analysed by PESTLE. Interrelation between various department in Tesco helps it in easily
achieve its organisational objectives.
12

REFERENCES
Books and Journals
Asif, M. and et. al., 2011. Including sustainability in business excellence models. Total Quality
Management & Business Excellence. 22(7). pp.773-786.
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: Entrepreneurship and small
business. Macmillan International Higher Education.
Burke and et. al., 2012. Business climate shifts. Routledge.
Charles Jr. and et. al., 2017. Walking the talk: The business case for sustainable development.
Routledge.
De Geus, A., 2011. The living company: Growth, learning and longevity in business. Hachette
UK.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Holcombe, M. and Ipate, F., 2012. Correct systems: building a business process solution.
Springer Science & Business Media.
Javalgi and et. al., 2011. Assessing competitive advantage of emerging markets in knowledge
intensive business services. Journal of Business & Industrial Marketing. 26(3). pp.171-
180.
Singh, P. K., 2012. Management of Business Processes Can Help an Organization Achieve
Competitive Advantage. International Management Review. 8(2).
Stacey, R. D. 2016. The chaos frontier: creative strategic control for business. Butterworth-
Heinemann.
Yoon, J., 2012. Detecting weak signals for long-term business opportunities using text mining of
Web news. Expert Systems with Applications. 39(16). pp.12543-12550.
Online:
Organisational Chart of Company. 2013. [Online]. Available
through:<http://www.innovationmanagement.se/2014/04/03/for-all-departments-how-
can-ip-help-hr-rd-sales-and-marketing-production-finance-purchase-ceo-or-owner/>
13