Business Environment Report: TESCO Analysis, Organizational Functions

This report examines the business environment, focusing on TESCO as a case study. It explores different types of organizations (public, private, and voluntary sectors) and their legal structures, providing examples like the NHS and Oxfam. The report analyzes the size and scope of various organizations, comparing their operations and reach. It delves into the relationship between organizational functions (marketing and IT) and how they contribute to achieving business objectives and organizational structure. Furthermore, the report assesses the positive and negative impacts of the macro-environment on business operations. It includes an internal and external analysis of TESCO, identifying its strengths and weaknesses, and explores the interrelation between these factors and external micro factors. The report concludes with a summary of the findings and provides references to support the analysis.

BUSINESS AND THE BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different types and purposes of organizations; public, private and voluntary sectors and legal
structures..........................................................................................................................................3
P2 Size and scope of various type of organizations....................................................................5
LO 2.................................................................................................................................................6
P3- Relationship between varied organizational functions and their connection with objectives
and organizational structure.........................................................................................................6
LO 3.................................................................................................................................................9
P4- Positive & negative impact of macro environment upon venture operations.......................9
LO 4...............................................................................................................................................12
P5- Internal & external analysis of TESCO to identify its strengths and weaknesses..............12
P6- Interrelation between strengths & weakness with external micro factors...........................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment term implies external factors, elements and forces that are beyond
control of a venture and they can affect functioning of business companies. These includes
suppliers, consumers, government, technological, social factors etc. Some of these components
have direct influence over a venture company and other could operate indirectly. The current
assignment will be based on TESCO, which consider in list of leading supermarkets in the UK.
The chosen company has sustained for longer period of time by selling quality items and offering
appropriate services to target customers according to their needs. This study will explain varied
forms of companies such as public, private and voluntary and their purpose as well as legal
structures. It will define size & scope of range of several forms of firms and relation between all
the organizational functions. Furthermore, this report will justify the link of all functions with
structure and objectives of companies. It will clarify negative & positive impact of macro factors
upon each operations of venture, supported by appropriate examples. This assignment will
explain external and internal analysis of specific firm to determine strengths & weaknesses and
will also describe ways that would define strength and weakness interrelation with external
factors.
LO 1
P1 Different types and purposes of organizations; public, private and voluntary sectors and legal
structures
Public Company-
Companies working under this form or nature of business needs to allot their share in the
open market in order to raise money and increase their market capitalization. The shares are sold
to shareholders and investors who are treated as the owners of the business. There are many
companies dealing in this nature of business such as NHS. It is important for the management of
business to meet the rules and regulations so that they can operate legally in the market. For that
they need to have a minimum of 7 members in their company and there is no limit to reach the
maximum point. Apart from this in order to work as this form of business it is important that
they have minimum of 5 lacks invested as paid up capital and after that if they open up or

acquire any other company by buying their shares that company will be treated as their
subsidiary. It is important to form their documents and register under the legalities with members
of associations and articles of association. Also it is important for the companies dealing in this
nature to form up their prospectus with all of their details and future ventures so that they can get
more people to buy their shares which will help them to raise more capital and allocate the funds
in more viable ventures (Möller, Nenonen and Storbacka, 2020).
Private Company-
These types of businesses keep their operations private as they register or work usually in
two forms such as either partnership or sole proprietor. Even on scale of multinational level there
are exceptions as many company do not want to go public and keep their operations private and
that is why they avoid this option. Tesco is a suitable example for this aspect as they maintain
their business in many countries but they have kept their operations private. Mostly businesses
that are maintaining under this nature are small scale business. Other than that in order to register
as private company it is important that management must have minimum of 2 members but in
case of maximum limit for members it is bit different than public company as they have a limit
of 200 members. Also for the aspect of paid up capital they need to invest 1 lacks and they can
set it as per the level of requirement. They are not allowed to raise money through shares this is
because they have kept their operations private which takes their position of not raising money
through this aspect. Other than these directors of the company are not allowed to work
independently and any stored opened up by the company is as per their own selection in the
market (Ključnikov and et.al., 2016).
Voluntary Company-
These companies participate on their own in the line of social work so that they can make
the lives of people easier without any problem with high level of involvement so that they can
provide opportunities to all. This form of business works in the line of charitable donations and
work as per the good and betterment of those people who are underprivileged. The company has
successfully established their name because of their generous activities and support of helpful
members. In order to serve more and cover more areas they have joined their hands with 20 other
companies who were interested in this work. With the help of this they have been able to

increase the level of donation and serve their operations in many countries. They have registered
their business in the sector of NGO. They started working in the line of this field in 1942 in
Kenya. The company focuses on different areas that are to provide education to poor children.
The aim of the company is that they provide a chance to everyone who is not able to get it so that
they can succeed and work for their future. The legal structure of the company is to serve as per
the decisions made by the trustees of the company and it is done for the charitable events and the
use of their assets in these events so that they can serve up to more people in a better way
(Strydom and Rudansky-Kloppers, 2016).
P2 Size and scope of various type of organizations
NHS operates on a scale as per they are able to serve in the market. they have been
successful in increasing their operations other than England, Scotland and Wales and they have
been successful in doing that too. Apart from this they have linked their services in North Ireland
with the help of other services. The services of company has been there for around 75 years and
at time it was very difficult for them as it was the period of world war II. In order to serve with
proper team and take care of people they have high amount of employees that is in the scale of
1,70,000. One of the most special benefits is for the people of UK and that is they would be
getting medical attention at no charge except dental or optician care. They don’t even charge the
cost made for prescription from the patient and even if they want to get medicines delivered at
their home there would be no charge for that. The scope of the company is vast as they can serve
in more areas which do not have proper medical facilities and where people are poor as this will
help them to increase their share as well as goodwill in the market (Khajeheian, Friedrichsen and
Mödinger, 2018).
The size on which Tesco operates tends to be very large for other businesses as the
company provides the largest level of employment which is around 2,50,000 people and that too
in UK if the company calculates on a global level then their employee count will be approx
4,00,000. Apart from this they have more than 2,000 of their outlets in the market. The scope of
business is high because Tesco is a successful brand which is successful in gaining the trust of
people and through that they can easily increase the benefit of word of mouth through which they
can focus on the scale of expansion and continue to satisfy the needs of people. There are many
areas where company has to improve the value and focus on their strategies as that will help

them to remain ahead of their competition through which they will be able to increase their scale.
This way they will be able to retain their position and increase their scope as per the needs and
wants of the customer (Prajogo, 2016).
Oxfam works on a big scale for a company who is dealing in the line of charities and
donations. In order to help more people and reduce the no of problem they face on day to day life
they have tied their hands with 20 other ventures so that they can work with more resources as
this will allow them to cater the (Halbert and Ingulli, 2020) needs of more people and solve their
issues in more areas. This will increase the size of operations they maintain. The members of the
Oxfam are focusing on approaches that are new so that they can work with new creative methods
through which they can get more people to contribute in their field and help the underprivileged
so that they can work up to their aim and that is to offer or help them to get equal amount of
chances or opportunities. If they are able to set and implement this approach in their culture then
they will be able to give more help to people. They have even made plans so that they can get
ahead of crucial times such as disaster management. The plan is to be prepared at times like these
and help the poor by giving them the support so that they can stand up and form up again. Apart
from this in order to improve their scope they are in talks with many other businesses and the
only companies they are meeting up with that who is interested in philanthropical nature so that
they can work together for the betterment of society and the underprivileged individuals can
stand a chance of getting hope. This has proven that Oxfam has changed the size and now focus
they can different methods to increase their scope so that can focus on their goals and help the
people in a better way.
LO 2
P3- Relationship between varied organizational functions and their connection with objectives
and organizational structure
A business company consist of different types of functions or main departments that
works magically and effectively in order to achieve set goals and objectives of ventures. TESCO
supermarket contains several forms of functions which are interrelated with each other. The
interrelationship of all departments mention below-

Marketing relation with IT department-
Information technology and marketing are the two most important and beneficial
departments of TESCO because by working with and taking support of each other they can help
to reach at target aims and assist to gain competitive edge. For example, marketing function in
chosen company work closer with IT team because they able to solve technical issues and update
existing systems with current one which is quite beneficial for marketing department. As it
enables them to create influencing and attractive promotion that help to gain attention of new
consumers and allow to retain existing one for longer period of time (Derbani and Banani, 2020).
Marketing unit is concerned with determining and satisfying target consumers’ needs at right
cost, it includes researching what buyers want and examining how TESCO could satisfy these
wants. For overall process, marketing team need to use advance technology that provide
excellent services and to maintain this act support from IT department is essential. Both
departments should work together as it permits them to bring several benefits for company in
term of increasing sales, customer satisfactory level, productivity and profitability as well. In
recent time, to reach at global level marketers need to better comprehend its consumers which
require investment and utilize of important amount of technology that can be provided by IT
team.
Production interrelation with human resource management-
Just like above departments, the current two are also related with each other and work
together for making everything possible for TESCO either gaining competitive edge or
increasing sales. Production department undertakes actions essential to cater range of products,
each act can take by workers who work in this functional unit in order to make buyer happier
ever after. To increase customer satisfactory level production team needs efficient and
experience workforce and in this procedure support of Human resource management play vital
role. HR manager and production department perform together at workplace and are interrelated
on the basis of their purpose that is to increase profits margin of TESCO. For example, HR
department hire new and talented people who are capable and able to produce quality products
for customers by considering his or her needs (Abbasi and et.al., 2020). By hiring candidates,
human resource management provide support to production team in form of increasing their
operational efficiency and strengthen workforce. This type of collaboration between both

departments offer the best opportunity to supermarket in form of gaining attention of
international buyers and boosting performance of its venture. It can provide more benefits along
with current one in regard to chosen company.
Marketing department connection with HRM-
All the department either functional or operational are interrelated or connected with each
other on the basis of their motives and common aim. Marketing and human resource department
is the best example because they work together to develop brand of TESCO. By working
together, they could allow frim to give tough competition to its rivals such as Morrison,
Sainsbury etc. and also permit to increase level of performance (Ren and Jackson, 2020).
Marketing collaborate with HRM in order to advertise vacancies which in return lead to
strengthen existing workforce or teams of employees because it allow department to gain
attention of those people who are seeking for better job opportunity and have desire to work with
well-known brands just like TESCO. This type of practice and activity can enable human
resource management to recruit talented and knowledgeable applicants who have right skills,
knowledge and competence as well.
Relationship between marketing, IT, human resource management and production link to
objectives of TESCO, in form of working together for achieving set goals. By working together
all the departments contributes in gaining advantages of company which include in list of its
business objectives. Furthermore, this interrelation is also link to organizational structure as they
all work in collaboration.
Advantages and drawbacks of interrelationship between all functions-
Basis Advantages Disadvantages
Interrelation between all
departments
 Organizational
functions within
TESCO are marketing,
human resource,
production and IT.
Each of section work
together which is quite
 Along with benefits or
edges, interconnection
between all the
organizational
functions affect in
negative manner upon
company structure as

beneficial in different
manners, for example,
it helps to achieve
objectives of TESCO,
and other form of
companies as well.
 It allows all workers
to learn, new skills
and get knowledge
about something
different which really
work in the future in
form of gaining
opportunities relate to
growth and success of
business.
 It can be said that
interrelationship
improve staff’s skills
as they could get
knowledge from other
functional units which
in return boost
motivational and
performance level.
it has several
drawbacks.
 For example, all
departmental heads
can work as per their
own needs and wish,
by collaborating with
other it could not
enable them to do so
which create conflict
among all of them.
 Interconnection
between all sections
can causes conflict of
interest. It could affect
negatively on business
structure as it can
create hurdle and
barriers in complete
development of plan
and achievement of
goals.

LO 3
P4- Positive & negative impact of macro environment upon venture operations
In order to determine types of factors and their impact upon TESCO business operations
specific strategic framework or model is require. Here, PESTEL analysis use in context of
chosen private company.
PESTEL analysis-
Political factor-
Change in tax policies, trade restriction, political stability or instability in a nation where
firm has existing business or plan to enter etc. are included in category of political factors. In
case of TESCO, change in tax rates is an example of political factor that put negative impact on
trading operation of supermarket (Castelló and Casasnovas, 2020). Chosen firm is well-known
British retailers in the world that operates in several of nations such as Poland, Malaysia, Ireland,
Czech Republic, Hungary etc. Due to this kind of external factor, company can face challenge in
context of trading procedure. It affects negatively on supply chain act as well, which is not
manageable.
Economic factor-
Increasing population, inflation rate, unemployment rate and disposable income are
economic factor that directly impact business operations in two different manners. In context of
TESCO, high unemployment rate can put positive impact upon employment and recruitment
operation of company (Peterie and et.al., 2019). As it gives human resource management
excellent chance in regard to recruit those people who are unemployed and seeks to find a job
and wish to work in leading companies like chosen one. This factor offer opportunity to hire
those applicants as well who are highly knowledgeable, experienced and have appropriate skills
which he or she could use to gain competitive advantages for supermarket as it brings several
benefits along with this one.
Social factor-
Fast pace of life, market trends, life style changes, change in consumer preferences etc.
are the examples of this category that affect direct upon sales, success and current operations of

companies. The target market of TESCO has change the way he or she purchase products and
services, instead of buying items from outlets in recent time consumers prefer buying everything
in one go. It put positive impact upon inventory management operation of supermarket and
marketing as well (Kanakaratne, Bray and Robson, 2020). It affects positively because firm is
offering online purchase service to consumers. Organization by selling quality products online
can successfully retain its potential buyers for longer period of time and attract new one.
Technology factor-
Technology advancement have brought several new opportunities for supermarket which
its management and leader could grab in order to enhance its brand image and boost performance
level of TESCO. For example, creation and introduction of online shopping with facilities for
home delivery is one of the advance technologies that bring benefits for company in term of
increasing sales, profits margin and productivity level (De Leon, Atienza and Susilo, 2020). With
this opportunity, organization can retain its existing customers and attract new one which in
return increase customer base even better than rivals who are operated in similar sector.
Environmental factor-
From side of consumers and government as well, organizations in the whole world are
facing challenges and experience high pressure to address environment problems and adopt ways
of current operations which can benefits society. This factor put positive impact upon TESCO
marketing, supply, production and sells operation because organization has already committed to
reduce its carbon footprint by up to 50%, which is really an amazing and valuable contribution
that chosen company had done in context of environmental safety and protection from harmful
elements that can negatively impact on beauty of nature. According to plan, supermarket
management take major steps towards minimizing waster produced in its physical outlets by
maximizing social conscience in consumers.
Legal factor-
Along with above external factors, government regulations, policies, rules and
legislations relate to business practices and management procedures could impact on
performance and production operation of TESCO. Here, Food Retailing commission suggestions
relate to code of practice affect the way firm sell their products and set prices. It put positive

impact on each operation of supermarket because firm change price after noticing consumers and
demanding payments from suppliers. It helps to build better bond between company and all its
stakeholder, which is really very essential to develop as it assist to be competitive in retain
industry for longer.
LO 4
P5- Internal & external analysis of TESCO to identify its strengths and weaknesses
Ranges of methods, techniques, models and concepts in the world of business are
accessible that companies use to conduct external & internal analysis. SWOT is one of the
strategic frameworks that here, apply in regard to TESCO as private company (Karyono and
Agustina, 2019). It has been applied in order to determine strengths & weaknesses.
Strengths-
Financial turnaround is the key strengths of TESCO which allow its business and
management to be competitive in retail industry. Because of leadership, organization has
recovered from annual loss of £ 6.4 billion. It permits company to give tough competition to its
rivals which in return help to gain competitive advantages (Chenchehene, 2019).
Innovation is the another strength of supermarket and consider as internal factor that put
positive impact upon sales and productivity. Organization and its skilled applicants by
developing and offering innovative products and exiting offer to consumers could successfully
retain potential buyers.
Adaptability is the third strength of chosen supermarket which allow management to run
business and increase operational efficiency even better than last few months or years. TESCO is
able to respond change and adapt changes, which is quite beneficial for its business growth.
Weaknesses-
Poor quality control is the main weakness of TESCO that can put negative impact on
productivity and brand image of its business in market, as it could also effect on customer base.
This internal factor impact customer expectation level which in return decrease sales and

profitability. It identifies through internal analysis that chosen company boasts complex quality
control measures, but supply complaints from target market indicates room for current and
further improvements.
Lack of inventory management is another weakness or internal force of supermarket that
leads to increase shortage of items in supermarket or physical outlets of firm. When consumers
visit supermarket he or she could not be able to find those products which they want to purchase
because of shortage. It directly impacts decision making procedure of buyers and allow them to
switch to another brand, where everything is easily accessible.
Opportunities-
Progress of Online grocery sales is one of the biggest and best business growth
opportunities for TESCO, which it can grab for improving or enhancing consumer experience
and satisfactory rate even better than the other supermarkets in the UK. In recent time, due to
pandemic target market demand for home delivery facility which is important and essential as it
help to prevent people from spreading infection.
High unemployment rate is an external factor that give another opportunity to TESCO in
term of recruiting new people that have excellent skills, knowledge and abilities. By garbing this
chance, supermarket can deliver quality products and measure its quality before serving to
customers. Supermarkets being one of the places where individual can find vacancies; this factor
could assist management to acquire number of applicants to boost its venture progress.
Threats-
Giant supermarkets like Sainsbury, Walmart, ASDA, Aldi etc. are certain of main rivals
of TESCO. They are growing and able to beat chose supermarket by selling grocery products and
providing better services to consumers. It increases the competition level between all players that
put negative impact on current management functions and leadership activities in negative
manner. It can be said that with increase performance and progress of above rivals, market
position of chosen company could be suffering or threaten as it can decrease operational
efficiency, affect production process and influence existing planning procedure negatively.

COVID-19 is another external factor that put negative impact on TESCO and arise as a
threat for its venture. It leads to decrease sales, increase pressure and require appropriate
management system. Due to this force company can face a lot of challenges.
Influence of SWOT analysis upon decision making procedure-
As discussed above, application of SWOT analysis model could help determining
external and internal factors. It can affect or influence decision making procedure of TESCO and
its management in positive manner, because through this framework, manager could identify
what elements bring benefits and which of them impact sales negatively for which they can take
better action. Before taking any action, via applying above concept management could aware of
those factors that are not appropriate for excellent growth of supermarket. It can allow them to
take decision and develop approach to overcome negative aspects.
P6- Interrelation between strengths & weakness with external micro factors
The above strengths of TESCO and its weaknesses can interrelate with certain external
forces on the basis of few things that define interrelation between all these terms. For example,
by using key strength such as adaptability company can overcome negative impact of current
pandemic in effective and efficient manner. As they can adapt ways through which supermarket
can provide its valuable services to people who could not be able to come out of homes because
of pandemic according to guidelines of UK government. Firm adopt online product delivery
trends during current situation which is quite beneficial and useful approach as it helps sustaining
retail business for longer in market and set positive image in mind of each buyer.
Furthermore, weakness of selected supermarket could also relate with specific external
macro factor such as increasing competition in retain industry due to maximizing hard work and
growth of existing supermarket brands. Due to poor inventory management company face
challenge that could not allow them to beat rivals and overcome negative impact of high
competitor.
In simple words, interrelation of strength and weakness with external factors can define
through their impact and usages, for instance company can use its strengths to handle effect of
come external elements and weakness as well.

CONCLUSION
By summing up above discussion, it has been concluded that NHS, Oxfam and TESCO
while operated in public, private and voluntary sector cater excellent services and products to
target segments which has successfully increased its consumer base even better than last few
months or years. All above types of companies have managed their businesses performance and
operating operations according to set purposes which are very different from each other.
Furthermore, from above analysis, it has been identified that by working together marketing,
production, finance and human resources departments has contributed in success and progress of
all ventures; they have achieved objectives and aims of each organization. Furthermore, it has
been determined that by taking right decision and using approaches as well as tactics,
management has overcome all the negative impacts of external factors, which is actually very
essential to do in form of increasing sales, productivity and performance level. Moreover, from
above discussion it has been summarized that by using abilities, skills and experience of workers
and developing productive workforce TESCO has overcome negative affect of external macro
elements. It means that strengths, weaknesses of company related with all those factors that
affect negatively upon each operation of firm.

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