Business Environment Report: Analysis of Tesco's Business Operations

This report provides a detailed analysis of the business environment, using Tesco as a case study. It begins by defining the business environment and then explores the public, private, and voluntary sectors, including their purposes and legal structures, with examples like the Royal Mint and Cancer Research. The report examines the size and scope of different organizations, again using the Royal Mint, Tesco, and Cancer Research as examples. It then delves into the interrelationship of organizational functions, such as production, marketing, finance, and human resources, and how they link to organizational objectives and structures. The report further assesses the positive and negative impacts of the macro environment on business operations. Finally, it conducts an internal and external analysis of Tesco, identifying its strengths and weaknesses and exploring how these relate to external macro factors. The report concludes with a summary of the key findings.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Explanation and purpose of the public, private and voluntary sector and their legal
structures.................................................................................................................................1
P2 Size and scope of a range of various types of organisations.............................................2
LO 2.................................................................................................................................................4
P3 Relationship between different organisational functions and way to link their objectives
and structures..........................................................................................................................4
LO 3.................................................................................................................................................6
P4 Positive and negative impacts of the macro environment on the business operations......6
LO 4.................................................................................................................................................8
P5 Internal and external analysis of Tesco company for identify the strength and weaknesses.8
P6 Ways to strength and weaknesses interrelate with external macro factors.......................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The definition of business environment means all of the internal and external factors that
affect how the organisation functions including employees, customers, management, supply,
demand and regulations. It is the sum total of all internal and external factors that influence each
other and work together to affect a business. The present assignment is focusing on the activities
of Tesco organisation, which is the British multinational grocery and general merchandise
retailer with headquarters in England, UK. In the present report, different types of business and
their objectives are covered. Furthermore,, different types of companies,their size and scope of a
range, relationship between different organisational functions and their link to organisational
objectives as well as structures are discusses. Other than that, positive and negative impact of
the macro environment on the business operations plus external and internal analysis of the
company to identify the weaknesses and strengths are covered. ,
LO 1
P1 Explanation and purpose of the public, private and voluntary sector and their legal structures
There are different types of companies in the United Kingdom and they are establishing
their business in different types of locations. Purpose of the public, private and voluntary sector
along with legal structure has been given below:
Royal mint public organisation: -
Purpose: - This type of company work for the government companies and their important
purpose is to promote the well-being to the society and to have accurate economic development
in the nation. Theses types of services usually offered in the metro areas with relation to safe
practice in London (Prajogo, 2016).Royal mint is a limited company that is wholly owned by
their Treasury and is under an exclusive contract to supply all the coinage of the country. Along
with this, public company's main purpose is to earn money and then development in the country.
There are different types of public companies in the UK and they are doing their business for
providing effective services to the people who are living in the United Kingdom. Royal mint
public company is also providing their services to the people and they are earning more
profitability from the business. Other than that, they can invest in the market in order to develop.
Legal structure: - Each and every company should make legal structure for their organisation.
Public limited company is an incorporated enterprise run by the board of directors on behalf of
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the shareholders and has an A.G.M at which shareholder discuss key problems related to the
organisation. The entire rights of the decision are under the government. They follow all rules
and regulation of the law in the UK.
Tesco private limited company: - The main purpose of the private company is to earn profits
by satisfying customers after analysing their requirement. Along with this, in order to increase
their brand value in entire market of the UK, they can expand business in different types of areas.
This type of business has a separate legal identity from the owners. Each and every shareholder
is the part in the private limited company.
Legal Structures: - When owner of AN private limited company is able to establish their
business, they send various legal documents to the registrar of organisations, who issue the
enterprise a certificate of incorporation which allows the business to trade as a private limited
company. The organisation name must finish with the limited words (Botha and Snyman, 2014).
The Cancer Research Voluntary company: -Purpose: - One of the important purpose of this
company is to serve social welfare and promote the services to people. Along with this, they
provide their services which can help to enhance the standard of living among the people. It is a
non-profitable company and providing its services to the people who are not able to survive inn
the global market. Other than that, The Cancer Research company is providing their services to
the people who are facing cancer disease.
Legal structure: - There are some legal structures which can be followed by the voluntary
company. According to rules and regulations of the law, voluntary organisation should follow
the comprises or unincorporated association as the legal structure (Armstrong and Brennan,
2015).
P2 Size and scope of a range of various types of organisations
Royal mint public organisation: -
Size: -Royal mint is the largest company in the United Kingdom. This is spread across 1458
square kilometres across England. They are producing coin for UK government and it is spread
within large number of areas. Other than that, the annual budget of the company is 5 billion
dollars. They have 15000 employees who are working in the organisation and they are being
allotted some task and work according to their profile and knowledge. Moreover, it has number
of assets which can be used for the people who are living in the United Kingdom.
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Scope: - Royal mint company is producing coin for the UK government and the scope or the
organisation is very large. Along with this, coin made by the Royal Mint ARE exploring in the UK
and used by the people WITHIN UK. It is a very big company with large number of scope in the
market (Belás and Sipko, 2015).
Tesco private limited company: -
Size: - Tesco is the biggest retailer chain company in the UK. It has 6,553 stores in different
areas. They are selling their products and services through the supermarket, hypermarket and
superstore in the market. The founder of Tesco company is Jack Cohen. Along with this, in
Tesco private limited company, 476000 employees are working. It is one of the largest brand in
England.
Scope: - Company's scope is based on the size of the business. This company has large size
(Moroni and Araujo, 2015). However, they can expand their business in different areas. Along
with this, there is a large scope of the organisation to fulfil the expectation of people in order to
provide them effective services. They have numbers of branches in the different areas and their
scope is also very large. When a company is able to provide effective service to the customers,
they are able to enhance the revenues of the business. It is the very important factor of the
company. This enterprise is very powerful scope in the nations, and they can expand their
business in any of the areas.
The Cancer Research Voluntary company: -
Size: - It is a non-profitable company, so it cannot explore its size in large areas. There are 3000
employees working in the cancer research company. Along with this, it has some branches in the
market and they are providing their services to people. It is important that they are giving their
services to the people who are not able to afford the services of hospital. Size of the company
may be very small but performance of the organisation is very great and it is beneficial for the
customers (Georgescu and Popescul, 2015).
Scope: - The main purpose and aim of the company is providing services to the people in relation
to promotion of growth and economic development of the nation. They are providing their
services in various areas, so they have lots of scope to serve people who need the services of the
The cancer research company. They are providing the effective services in order to improve the
quality of people's lives after treatment. When any company provide their service without profit
then different types of companies or government offer help to them through fund and another
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source. When they get the help of another companies, then organisation's scope automatically
increases day by day. One of the important benefit of this company is that they can get the help
from another organisations, so they will be able to provide more services to the people. Other
than that, their main purpose is to increase more services in the social care, so more people can
get the effective services of the company.
LO 2
P3 Relationship between different organisational functions and way to link their objectives and
structures
A company has different types of functions and they allot work to the entire employees
according to their profile and knowledge. Other than that, there are different types of functions
and they are maintaining their relationship in the company. t (Khan and Quaddus, 2015). There
are different types of department in the Tesco company and they have team member for
accomplish the work.
Within the organisation, there are number of departments and employees which are
working together and are linked with one another. F company's first function is production, in
that department, they produce the products of the company. Then, they need to labour for this
types of work and then they will be able to produce the goods. Further, company will sale that
products and services in the market. The main player in the selling function is the marketing
department of the company. Through marketing management the organisation can sale and
promote the products and service in the all market. So, they both department are link each other.
In the production department, they need some fund and capital to invest in the company and
need the labour for the work. Along with this, manager of the production team is providing them
different types of work according to employee's profile and knowledge. It is a very effective
function of the company.
When the organisation accomplish the work of production they need the finance for the
another department. Along with this, in this function, company can borrow funds from banks,
finance company or market share. According to this department, employee has the responsibility
to keep all data in safe place. Other than that, it is a record which can be used for daily basis
expenses in the business (Virglerová and Vojtovic, 2016).
On the other hand, company has another department of Human Resource Management
(HRM) which hire employees for the organisation. It is one of the important department of the
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company. Human resource manager plays a vital role in the organisation. Without this type of
department, company cannot get good employees in their company. Along with this, HRM has
some responsibility for hiring the great employees. According to their roles, they can take an
interview and by observing them, they can select the right candidate for the company. It is a very
important section of the organisation. Through it, they can hire the production manager and other
employees for production department. Along with this, they can hire people for marketing and
other departments of the company. Other than that, one of the main responsibility of the human
resource management is that they are take care of all the employees and has power to resolve all
problem of the employees. This department can provide effective employees to the company
who has lots of abilities and skills for accomplish the task at their work place. The another role
of the human resource is that they can arrange the training session and development program for
the employee, so they can increase their information, knowledge, abilities and skills. It is the
very important for the learning of the employees, therefore, they can able to perform effective
work at their work place.
When company want to sell their product and services in the market then they should
make a department of marketing It is also a very important department of the company. Through
it, they can promote and sell their products and services in the market. Along with this,
marketing department has power to promote the products and services in professional way.
Through it, they can increase sales and profitability of the business. Other than that, they can
increase their revenue and brand value in the entire market. Overall, marketing department also
plays an important role in the organisation (Kljucnikov and Paseková, 2016).
There are above all the departments in the company and are linked with one another.
When production department produce the products then they need to finance and capital for the
production, however they are connected with each other. Other than that, when they need labour
and more employees for different types task, then human resource team can help them to hire the
employees for them. Along with this, they need to sale their products and services in the market
for which marketing team can promote and sale the products and services in the market.
However, all department are linked with one another and the objective of all department is to
increase the profitability and revenue of the company. They all have different types roles and
responsibilities but only one objective which is to earn profit for the company. Other than that,
their internal objectives can be according to allotted work by the organisation, so they should
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accomplish the work and task on the time. When marketing team promote the business behalf of
the company, then they need to some information and specific skills, so human resource is
providing them training session and development program for increasing the abilities and skills.
Through this, employees can increase their information and knowledge about the company and
products or services (Savrul and Sener, 2014). Other than that, marketing department is linked
with human resource management, finance and production department of the organisation. There
are different types of departments in a company and when they link with each and other, then it
will be beneficial for the company. Company get the biggest responsibility that they should
maintain the relationship between all department and it is a critical situation of the organisation.
Relationship is not easy to be maintained in the company, because there are different types
people. However they can not understand each other in less time, so company should provide
them special training to understand each other. Other than that, they should provide training
session and development program for the employees according to their requirement. In the
company, numbers of employees are working together, so it need to make a team so they will
know about the help and different types of activities in the business. They can provide the some
team work so they can work with team. They can able to help each other, so they can able create
smooth work station in the company. Each and every organisation should maintain the smooth
work culture in their work place, and for making smooth work station they should accomplish
effective task and work. When they will be able to maintain relationship between all
departments, then it can benefit the business in many ways like they can get the best employee
from the market, they can get more profit and revenues from the business etc. However, they
should follow the entire rules and regulation of the company in order to ensure smooth work in
the organisation.
LO 3
P4 Positive and negative impacts of the macro environment on the business operations
There are different types of department in an organisation, they are allotted different
task, so that they can accomplish the business goal and objectives efficiently. Within an
organisation they need to analysis the macro environment so that they can know about the
positive and negative impacts on the business. Positive and negative impacts of the macro
environment on the business operation are given below:
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 Political impacts: -According to political view, company should maintain the policies of
tax, legislative bills, health and safety laws and authority of the organisation. There are
different types of political effects on business according to the area (Lu and Xu, 2014).
Tesco is the largest company, however, they follow the entire political activities or laws
imposed by the government. When government will change their taxes policies, then
company can get some benefits of reducing cost and some time tax can be increase, so it
will not be beneficial for the company.
 Economic impacts: -This macro method is determinative on economy's performance that
straight impacts on the business. In economic impacts, they can involve interest rate,
foreign exchange rate, and inflation rate. Through this kinds of factors, economy can be
changed according to various changes within the business environment in the nation.
When economy is good, the company also get the benefit from the business, but when it
not good then they can get some loss from the business.
 Social impacts: - Company should analysis about the social and people who are living in
the nation, so it will easy to sale and promote the products and services of the business
(Doh and Ozaki, 2015). Other than that, if company is able to provide effective services
to the people, then they will start the mouth to mouth marketing in the market, but if
company is not able to provide better services, then customers can not purchase the
products and services of the organisation. The main benefit is that, social factor can
increase the customers list but decrease the satisfy customers.
 Technology impacts: - There are number of competitor in the market who are selling
same products of the company. However, they should analysis about the technology
which are using by their competitor in the market. Other than that, each and every
company should use some effective technology in the business. The positive impact on
the business is that they can get the best technology in the business, so they can
accomplish the work very easily, but negative impacts on the business is,they need more
fund to update effective technology in the business (Apăvăloaie, 2014).
 Legal impacts: - Company should make the legal structure of the business, so they will
not face the problems about the legal structure in the future. Positive impacts of this
methods is that company can secure their data and information in safe place and when
they need it, they can able to use it, but negative impact is that when they expand their
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business in another location, then each and every areas and nation has different rules and
regulation of the law. So, they should follow the another area's rules and regulations of
the law.
 Environmental impacts: - According to this factor, company's environment should be
smooth and good, so they can run their business In the market. Other than that,
environment can be internal and external. According to internal factors, company can
include the employees, their behaviours, knowledge. However, when they get the better
employees, then company can get the more profitability and revenues from the business,
but when it will not better, then company should provide training session and
development program to the employees. Other than that, according to external factor,
they can include the customers, satisfaction and promote the business. If they will able to
satisfy their customers, then their products selling will be increase, but customers and
promotion are not effective as required by them, then company can not get benefit from
the business (Konstantin, 2014).
LO 4
P5 Internal and external analysis of Tesco company for identify the strength and weaknesses
Strength: -
 It is the powerful retail brand in word wide, in the top 100 of the world's most valued
brands. It has large number of market in the global.
 Tesco has 6784 stores in the world, however people can get the effective services from
the company (Sinay, J. 2014).
 Prices of the products and services are very attractive, so customers are purchasing the
products and services from the Tesco company.
 Company is able to increase loyalty and faith of their valuable customers, however, they
are satisfy from the products and services of the organisation.
Weaknesses: -
 Tesco is the largest brand in the different market, and they have numbers of business's
stream, so they are getting some bad debt from credit cards and high level of household
insurance claims (Organisation function, 2018).
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 Company has no experience about the different market and technology, so they invest
more money in new web technologies and IT, as well as store refurbishment, and cash
diverting from price reduction strategic.
Opportunities: -
 Company can start the digital marketing with effective website and then they can sale
their products and services through website on the internet.
 Company can provide their services and products with some good offers, however people
will be attract from the company and they will buy the company's products and services.
 Tesco can expand their business in the Australia, where the grocery retail market faces
relatively limited competition yet is fiercely price sensitive (Sharma. and Singhal, 2016).
 Company can manage the customers service department for satisfy their customer,
however they will be able to increase their customers and profit or revenues from the
business.
Threats: -
 Tesco is the number one company in the UK grocery retail market and it means that they
are the target of their competitors like Asda, Morrison's and Sainsburry's.
 Company faced the problem of some rumours which was explored by their competitors.
Through it, they loss their some valuable customers. It is one of the biggest threat of the
organization. In order to solve this issue, they was investing more money in the business
for satisfy the customers (Savrul and Sener, 2014).
P6 Ways to strength and weaknesses interrelate with external macro factors
Tesco company has various strength and weaknesses, and they are trying to increase the
strengths and decrease the weaknesses of the business. There are number of issues evolved from
the macro factors, but they can reduce the negative impact of the macro factors. Each and every
problem has one good thing that they comes with certain solution. When political and
technological factors effect the business, then positive impacts are beneficial for the organisation
in order to increase the strength of the business. On the other hand, when these all macro factors
explore the negative impacts on the business then company can not be able decrease the
weaknesses of the business. Macro factors has some effective impacts on the company, so they
can able to increase their strength and opportunities in the business. Other than that, external
macro factors are interrelate to the company's strength and weaknesses. When they identify about
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the all factors of macro analysis, then they can make the effective strategies and planing for the
business environment. Through it, they can make smooth work environment in the enterprise.
When they will be able to succeed in this process, company will be able to reduce their
weaknesses of their business (Business environment, 2018). Macro factors has seven view of the
business environment, however they can reduce the negative impacts and increase the positive
impacts on the business. So they can able to earn more profitability and revenues from the
business. Along with this, it is very important process for the Tesco company, because if they are
able to accomplish this types of activities, then negative impacts will increase then they can not
able to earn more profitability and revenues from the enterprise.
CONCLUSION
In this report it is recognised that the different types of organisation like public, private
and voluntary sector's purpose and their legal structure. Furthermore, in the report it is concluded
about the all organisation's size and scope of a range of different types of companies in the UK.
Other than that, in the present report it is also concluded that company should maintain the
relationship between organisational functions and they should manage the link to organisational
objectives and structure of the business. Moreover, it is concluded about positive, negative
impacts of the macro environment on the business operation and internal and external analysis of
the Tesco company in order to know about their strengths and weaknesses.
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