Business and Business Environment Assignment: TESCO Report, HND

This report presents a comprehensive analysis of TESCO, a multinational retailer, within the context of the business environment. It begins by defining the business environment and its impact on organizations, followed by an overview of TESCO, including its global presence and financial performance. The report then delves into different types of business organizations (public, private, and voluntary sectors), their purposes, and legal structures, using TESCO as a public sector example. It explores the size and scope of business organizations, differentiating between small, medium, and large enterprises, and examining TESCO's mission, vision, and stakeholders (customers, employees, suppliers, investors). Furthermore, the report includes PESTLE and SWOT analyses to evaluate the external and internal factors influencing TESCO's performance and market growth. Finally, it examines the interrelationship between organizational functions and objectives, providing a holistic view of TESCO's operations and strategic positioning.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 & P2 covered in PPT .............................................................................................................1
P3 Relationship between different organisational functions and its objectives..........................1
TASK 2............................................................................................................................................3
P4 Positive and negative aspects of macro environmental factors.............................................3
P5 Internal and external analysis of organisation......................................................................4
P6 Strengths and weaknesses interrelate with external macro factors .......................................6
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Business environment is an intermixture of all macro and micro factors that impact upon
the commercial organisation and its market growth as well. It is a basic feature of all enterprises
that influence day to day business activities as well as operations (Agarwal, Grassl and Pahl,
2012). This present report is a case study of TESCO which is a multinational retailer of grocery
products and services. At present, company is located at 6553 locations across the world and its
annual net income is £57 million. In this present assignment, there will a discussion on various
types and purposes of business organisations such as private, public and voluntary. In addition,
legal structure of these organisations is also explained briefly. The present report will be
included that, organisation structure of the company is linked with its another departments; it is
helpful for achieving goals and objectives in an adequate manner. PESTLE and SWOT analysis
of TESCO will be also done in order to evaluate those factors which put a huge impact on
company's performance and its market growth in future. There will be a interrelationship internal
and external factors of the company is also described in this report.
TASK 1
P1 Different types of business organisations and their purpose
In this world, there are various business entities are established. In which, some of them
works for earning profits, some for public services and further are developed as a non-profit
organisation. These enterprises are known as public, private and voluntary sector business
organisations. All of these have great roles and responsibilities in their fields. Below mentioned a
brief description among all three types of business entities, such as-
Public sector - It involves all those business that are controlled and directed by the
government of the country, just to sake render better services to people. In UK, there are a wide
range of public sector organisations are authorised with an appropriate and achievable aim. In
addition, public sector organisations are also culpable for economic growth and development.
For example- TESCO Plc is also known as public sector organisation of UK. Basically, the
company deals in grocery, home and electronic products. It has reached in 12 countries and
become the leader of grocery market over the globe; market share of TESCO is 28.6%. T
Legal structure of the company-
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A public limited company, have to follow all rules and regulations that is developed by
government. Their working activities and business decisions are also based governmental
directions. In public limited company can freely sell its shares across the public but it needs a
minimum share capital £50,000. Such companies are always put PLC after their names. TESCO
has its own legal identity as it can easily trade its shares in market. In England, male and female
more than 16 years old can be a owner of public limited companies.
Private sector- Companies that are wholly run and execute by an individual or a group of
person are came under private sector business organisations. These business entities do no have
any connection with government and they are not bounded to follow laws and regulations of any
legal authority. Additionally, the prime objective of private sector organisations is to earn more
and more profits by providing quality and value added products and services to their clients or
customers.
Purpose – Private sector organisations are totally differ from public sector organisations, they
focuses on determining large sales revenue because this will help to these companies in order to
sustain for long term in competitive market.
Example- Starbucks is a good example of private sector, it is a coffee chain that is also
implanted in UK. As the last of 2016, the company operates 23846 regains nationwide.
Starbucks has 19.16 billion revenue over the world and its 246580 employees are currently work
with it.
Legal structure of Private sector organisations
Managers of private limited companies make their own legal laws and methods in which
they will operate their business. Their working activities are also not affected by governmental
judgements or any legal body. Starbucks cannot sells its share in market. These are some legal
forms of private sector organisations, such as-
 Sole proprietorship – it is the form of business organisations, that does nor require any
legal formalities. In such businesses, the sole proprietors or the owner of the company is
responsible for its all debts and funds. But in some situations, the owner can employee
another person. In order to take any decisions regarding business, their managers do not
ask or share something with any other person or partners.
 Partnership – A partnership is run by two or more members, it is set by partnership deed
among partners. As per the deed, all of the partners have some ratio in the profits and
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losses of the business. There are two types of partnership, such as- limited and ordinary
partnership. In ordinary partnership, all assets of partners will be granted at the time of
losses whereas in limited partnership partners are liable to pay losses as their ratios.
 Limited companies – These are also known as joint stock companies. At the time of
registration of any company, managers needs to apply as the companies act 1965. It
would also involves memorandum of association and a incorporation certificate by public
limited company. In addition, Pvt. Ltd. companies needs 2 to 50 people in order to
execute any kind of business. Franchisee – it refers, those business entities those are preciously executed successfully
and their employers are ready to sell their copyright to any one by taking initial fee. After
that, such person have all rights as he or she its products by using the name of that
specific organisation.
Voluntary sector- The sector consists with those business units which are implanted for
social welfare and services. Their main aim is not to generate more profits. Voluntary sector
organisations supports those persons who have lower level standard and cannot able to fulfil their
basic needs.
For example – Cancer Research UK is the most example of voluntary sector. The charity
develop awareness among people. In addition, it also conduct a research towards proper
diagnosis and treatment of diseases. There are 40000 volunteers of this charity in UK.
Legal structure of voluntary sectors -
Governance of these organisations are as same as private companies; board of trustees are
named as the directors of the company. Apart from this, volunteers works as the employees, they
develop plan and strategies for it. But it can be executed only after the permission of board of
directors.
Growth of the international business
In this competitive world, there are numerous business organisations which are widely
spread worldwide. For example- the core business of TESCO is extend in 12 nations, i.e. Asia,
Hungry, Scotland, America, China etc. due to its, it become the largest industry of retail products
and services. Along with this, Cancer research UK and Starbucks are also developed their
business over the globe. These companies have high annual turnover because of their good
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quality products and services. They also have many domestic as well as global customers who
are liable for their growth and success.
P2 Size and scope of business organisations
As above mentioned, there are various types of business organisations, such as- public,
private and voluntary. All of them are well specialised in their areas. Along with this, on the
basis of size and scope commercial entities are divided into, small medium and large. Small and
medium enterprises are limited only at local level, they have small turnover and low variety of
products. Such entities are established just to satisfying basic needs of an individual. Apart from
this, large organisations are expanded at global level and they have huge range of goods as well
as vast amount of users or clients.
There is given size and scope of public, private and voluntary sector business organisations: -
Public sector organisations- Such sectors are implemented by the government of the country
for providing best services to public. Along with this, public sector organisations are developed
in order to give quality services to people for their betterment. TESCO is a public limited
company, that follow a specific theme- “every little helps”; it was founded in 1920. It deals in
telecommunication, consumer goods and online financial services. There are over 476,000+ are
currently working with TESCO. In addition, the annual turnover of the company is £55,917
million. Basically. TESCO deals in grocery, electronic and financial services.
Mission and Vision of TESCO -
“Creating valuable for customers in order to earn their lifetime beliefs and loyalty” it is
the main mission of the company.
TESCO says about its vision- “to be most valued retailer company among customers and
societies” in which it operates its businesses. For that, the company have most allegiant staff
members who are committed towards its, these are the growth of the firm. It managers wants to
make “TESCO a innovative and modern company by applying their skills globally.
Stakeholders of TESCO -
 Customers – Users or consumers are the main stakeholders of the company because the
growth and success of TESCO are depend upon them. So as public limited companies
needs to recognise wants and desires of their customers and make efforts in order to fulfil
them in an effective manner.
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 Employees – In its vision statement, TESCO says, that it have loyal and committed
manpower who generates more innovative or creative products. In order to maintain this
interest of employees, the company needs to provide healthy, flexible and positive
working environment, this will also increases productivity of the business organisation.
Private sector organisations – Such business organisations are regulated in order to earn more
profits and make higher sales by attracting more customers in target market. For example-
Starbucks, is the private sector organisation. The company was founded in 1971. in order to
achieve goals and objectives of Starbucks, its managers follows an appropriate customers
oriented business strategy. In other words, the firm emphasis on rendering best quality services
to its clients and also adopt effective distribution channels for making higher sales. There are
over 238,000 employees are currently working with Starbucks. In addition, the annual turnover
of the company is $19.16 billion.
Vision and mission statement – The prime mission of Starbucks, “to raise and inspire
human spirit – one, cup, cone person and one neighbour at a time. Apart from this, the vision of
the company is, “to be a provider of the finest coffee by managing uncompromising principles
over the globe while we grow”.
Stakeholders of Starbucks -
 Suppliers – Retailing firms and coffee farmers are the main suppliers of the company.
They are liable to grow a demand of Starbucks products and services. Along with this,
farmers are also helpful to generate the taste in coffee. Therefore, it is essential for
business entity is to addressed the interest of these stakeholders by conducting activities
of corporate social responsibilities. Investors – Venture capitalists are the main sources of finance of these private sector
business organisations. Starbucks needs high amount of funds for its global expansion
and also for continue dominance in the industry of coffee house.
Voluntary sectors – These are the sectors which determines social services and welfare.
It is also known as the third party organisations and emphasis on developing a healthy economy
of the country. Cancer Research UK is a voluntary sector organisation of UK, that was
formulated on 4 February 2002. In that, employees and volunteers are conducted research
activities for the betterment of cancer diseases people. There are over 1.5 million employees are
working with NHS and the annual turnover of the company is $16.4 million.
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Vision and mission – The mission statement of the charity is to reduce cancer patients in the
world by giving them proper and sustainable treatments. For that, the charity is also using
effective and modern techniques. Whereas the vision statement of the enterprise is to find out the
cured or solutions for all cancers.
Stakeholders of the company -
 Trustees – These are persons who are liable for taking effective decisions for growth and
development of voluntary sector organisations. Trustees of these sectors are also helpful
to managing their all working activities in an adequate so as these charities can serve
better to their customers.
 Funders – Such people are generating funds for voluntary sectors. It involves federal and
state agencies. In UK there are 30000 registered funders who provides money for the day
to day activities of Cancer research.
 Volunteers – they are the act as employees of these enterprises. Volunteers maintain day
to day activities or functions of voluntary sectors in a systematic manner.
P3 Relationship between different organisational functions and its objectives
Organisational structure of businesses consists that how its activities are directed in order
to achieve goals and objectives. It is essential for every manager is to allocate an adequate,
flexible, effective and sustainable organisational structure that helps in accomplishment of
competitive advantage. It also assistive in determining the ways in which a company performs or
operates. There are given some major functions of business organisations, that are stated as
follow: - Finance – The core role of finance department is to create budgets of the company, it
also involves how much amount will be spend on the diverse activities within the firm.
For that, finance managers of TESCO are tend towards financial planning. The unit also
manages cash flow of the company. Along with this, the department also keep financial
records in order to evaluate the financial position of the business in potential market. It
also encompasses the income tax liability of the organisation, finance managers uses
various proactive policies to reduce tax burden. With this assistance, firm can easily
achieve its goals and objectives and also gain higher growth. Marketing - It involves advertising and promotion. Without marketing, any company
cannot achieve its goals and objectives with its potential market. It helps to aware
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customers about the products and services as well as its uses also (Aterido, Hallward-
Driemeier and Pagés, 2011). Along with this, it helps managers how to promote the
trades in target market and how to attract buyers towards the company. Business
organisation which has more customers can easily achieve its goals and objectives. So as
at the time of marketing planning, managers needs to involve some aspects of business,
i.e. the range, prices and quality of goods. Human resources – HR managers have a vital role in business industries, they develop
effective strategies for employing people. Basically, the main work of human resource
department is to attain and retain talented employees who are able to produce something
better and innovative. In TESCO, workers have new and innovative skills so as they are
supplying quality products and services to their customers; through which the company
is becoming the third largest retailing industry across the world. It is also assistive a firm
to accomplish its goals and objectives in a certain time period. In addition, the another
role of the department is compliance management, if employees are sharing cordial
relationship with each other as they can perform better. Operational and production – This department also has a impulsive role in running a
business organisation successfully. The prime responsibility of operational unit is to
provide quality products and services so as to attract more customers. Production
manager of the gives guidelines that how to change raw material into finished goods
which is going to sell in market (Auzair, 2011). But for the same, employer needs to set
some standards and strategies that how to meet customers wants and requirements in a
systematic manner.
 Research and development – R & D department of TESCO emphasis on market research
so as to know buyers expectations. In addition, the department also recognise
competitor's strength and their techniques which will used in future. With reference to
this, it will aids owners of the company to achieve their goals and objectives.
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All these above functions of the company are linked with organisational structure. Along
with this, TESCO is using Matrix organisational structure, that alleviate the horizontal flow of
information and skills. Basically, this type of organisational structure is used by multinational
business in which various departments are interrelated with each other.
In addition, in matrix organisational structure functions or responsibilities are assigned to
a team for a specific time period and after that they are are go back to their departments
(Avramenko, 2012). Matrix organisational structure helps in increasing communication as well
as communication among employees of various units so as they can make suitable decisions for
the growth and development of the company. It enable organisational structure to be more
flexible and easy acceptable all changes of external environment. In addition, matrix
organisational structure is also served its customers over the globe and managing supply chains
outside the company.
TASK 2
P4 Positive and negative aspects of macro environmental factors
In macro environment, there are various factors with have put a huge impact on business
practices or operations. This can be done through PESTLE analysis, that is used in order to
monitor external environment of the company. These are the factors that affects retail industry,
such as – political, social, legal, technological, environmental and economical.
PESTLE analysis of TESCO - Political factors – These factors can bear on a company in direct and indirect ways.
Political are not limited in a country even though they also affect a international market
position of the commercial enterprises. The UK government, forces retail companies as to
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provide job opportunities to people by opening their new branches, but sometimes it is
not possible for companies as to open new stores and branches. The positive impact of
these factors as it helps in promoting free trading blocs of government, it also enchaining
a business organisations in other countries of the world. Economic factors – The company is more focused on its economic factors because they
brunt consumer behaviour. Due to economic recession in 2008, the TESCO was loss its
many customers with this, its sales were also went down, during the problem of
unemployment was also raised. Due to this, customers was to not able to spend more on
luxurious products and services (Burns and Winter, 2011). Therefore, UK is still facing
the problem of financial uncertainty which have harmful impact upon margins and sales
value. It is the negative aspect of economic factors. Apart from this, the positive aspect
of this factor is customers prefer to eat at home so as it could be a great opportunities for
retail industries. Social factors – In UK, there are more young people. Such people spend low on eating
products and do not go to supermarkets for shopping purpose. TESCO produces products
for all group of generations. Along with this, in this dynamic world, needs and wants of
customers are rapidly changing. So as the company requires to produce which are able to
fulfil demands of all groups of people. Technological factors – There are various techniques and tools are being evolved in
these days. The negative aspect of technological factors are – if any company is not
capable to adopt new techniques and methods of products as it cannot be stay in
competition. Because all retailing companies are using effective tools for manufacturing
better quality products and attract more customers. Apart from this, if TESCO is invested
highly on technology so as this will increase its revenue by 10 to 20%. recently the
company focuses on its website development and many customers are attracted towards
it. Legal factors – The laws and regulations forces a company to follow work under them. If
TESCO fulfil all legal rules and legislations of the any country, this will improving its
relations with them. Along with this, legal factors also impact upon market reputation of
the business organisation. For example- if UK government make strong laws for
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