Business and Business Environment Analysis for Tesco UK

This report provides a comprehensive analysis of Tesco's business environment. It begins with an introduction to the business environment, defining internal and external factors that influence organizational operations. The report then delves into the interrelation between organizational departments...Read More

Business
and
Business Environment

Table of Contents
INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................4
Covered in PPT..................................................................................................................................4
TASK 2....................................................................................................................................................4
P3: Interrelation between different organizational departments and their linkage with
organizational objectives..................................................................................................................4
TASK 3....................................................................................................................................................5
P4: Impact of macro-environmental factors.....................................................................................5
TASK 4....................................................................................................................................................6
P5: Internal analysis of organization for identification of strengths and weaknesses......................6
TASK 5....................................................................................................................................................8
P6: Interrelation of macro-environmental factors with organizational strength and weaknesses...8
CONCLUSION.........................................................................................................................................9
REFERENCES..........................................................................................................................................9

INTRODUCTION
Business environment is the combination of internal and external factors which
affects the business operations of an organization either in negative or positive manner.
Internal factors include quality of human resources, business structure, corporate culture etc.
which affects the performance of employees as well as an organization. On the other hand,
external factors includes political, economical, social, technological etc... Which largely
affects the sustainability and profitability of an organization. Therefore, the management are
held responsible to establish an effective plans and policies in order to deal with such factors
so as to achieve desired goals and objectives. Tesco, a UK based company which is engaged
in offering fresh and quality food products at reasonable prices is taken for the purpose of
preparing this report. The project includes the different types of organization and their scope
and purposes. Interrelation between various departments of organization and their linkage
with organizational objectives are also explained under this report. Internal and external
environment which affects b business operation of an organization are included under this
report.
TASK 1
Covered in PPT
TASK 2
P3: Interrelation between different organizational departments and their linkage with
organizational objectives
There are different departments in an organization who performs different business
functions in order to achieve organizational goals and objectives. Therefore, the growth and
success of an organization is based on such departments. These departments include
marketing, production, human resource etc. which gives maximum support in helping
company to achieve competitive advantage. The management of Tesco is held responsible to
analyses the performance of each department sin order to find out each contribution in
achieving desired goals and objectives (Bovee, Thill and Raina, 2016). It helps them to
identifying the deviations which restricts departments in giving maximum contribution.
Interrelation between functions of departments of Tesco is briefly explained as below:
Human resource department: Such departments are responsible to recruit and
develop skills and knowledge of employees with a motive of getting maximum support from
them in achieving desired goals and objectives. The HR manger is liable to manage several
functions such as workforce planning, performance appraisal, fixation of salary etc.
Therefore, the HR department is wholly responsible to enhance the performance of
employees and bringing motivation and self-confidence among them through conducting
training and development programs, rewards, compensation etc. This will increases the
chances of achieving desired goals and objectives within predetermined time period.

Marketing department: Such department is held responsible to market the products
and services in order to attract large number of customers. It can be done through following
various promotional strategies such as advertisement on TV, Newspapers, social media etc.
This will help company in gaining huge customer base and generate huge revenues as well
(Saleem, 2017).
Finance department: Such department is responsible to arrange financial resources
from various sources such as investors, financial institutions etc. with the help of which the
business operation cannot be interrupted. Having adequate amount of funds help company in
adopting advanced and updated technology in different processes of business activities in
order to maximize the quality of products.
Production department: It is most valuable department of an organization on the
basis of which customer’s needs and requirements has to be fulfilled. As Tesco is engaged in
offering food products thus it important for production department to use healthy materials
while producing food products in order to maximize their quality. Through conducting
research, the production department are able to manufacture demanded products due to which
the company can easily achieves its desired goals and objectives (Commander and Svejnar,
2011).
Organizational structure
Structure of organization is divided on the basis of requirements which are briefly
described as below:
Function based: It is such a structure which is based on the business functions
performed within an enterprise. For example, Human Resource, marketing, finance etc.
Geography based: In this type of structure, the organization is divided on the basis of
different regions of countries to which quality food products need to be offered. The
company prefers those locations where they get large number of employees for the products
and services they offered.
Product based: It is type of structure which is based on the diversified products
provided by n enterprise. For example, Tesco has provided wide range of products such as
fruits, vegetables, meats etc.
Consumer based: Such type of structure is based on the needs and preferences of
customers. The main motive of such structure is to identify the changes required in current
products and accordingly make suitable changes in order to increase the level of satisfaction
of customers.

TASK 3
P4: Impact of macro-environmental factors
Every organization which are operate in competitive market should required to
consider macro-environmental factors and implement corrective actions and measures in
order to deal with such factors so that they business functions are not much affected. Tesco is
one of the largest retailer company which are operated in different countries thus they are
easily affected from such factors which includes political, economical, social etc. which make
either negative so positive impact on the business operations of an organization. The
management is held liable to determine all such factors and make an effective e decisions and
plans in order to cope up with such factors. For this, they need top first conduct PESTLE
analyses which help to know the problems they may faces due to such factors (Dahan and et.
al., 2010).
PESTLE Analysis:
Political factors: It is the factors which are related with stability government, taxation
policies etc. which can affect the sales figure and growth of an organization. Therefore, Tesco
should require to operate its business in such countries the government are more stable due to
which they cannot faces so much problems regarding following rules and regulations. For
example, if the government changes in UK and bring new taxation policy then it will affect
the income and profitability of organizations in adverse manner.
Economical factors: The income of people is depend on the economy of country thus
Tesco need to focus on expanding their business to such countries where the economy is
increased. For example, expanding business to Japan will bring profitable result to company
as the purchasing power of people in Japan are high due to increases in economy.
Social factors: Such factors include the interest and behavior of customers which may
affects business decision and plans made by management of an organization. Fro example,
 Due to lack of knowledge, the customers prefers to buy local products which can
damage their health. This will negatively affects the dales figure of Tesco. Tesco need to produce such products which are more in demand due to generating
huge revenues (Hall, 2011).
Technological factors: It is related with adoption of new technologies and tools
which increases the efficiency of work of employees as well improve quality of products.
Using advanced technologies in different process of business activities brings beneficial
result to company. For example, Using e-commerce and internet help Tesco to attract
maximum number of customers through providing relevant information and benefits of
products.
Legal factors: There are certain legal laws and legislation which need to be comply
by organization if they want to exist in such country. The management are liable to ensure

whether organization follows such laws and regulation and if not then suitable action should
be taken. For example, Government introduces various acts such as Equality etc., 2010 which
need to be implemented within an organization so as to provide equal right to employees.
Environmental factors: It is ethically liable of every organization to execute business
operations without harming environment which directly affects the health of customers. For,
using Poly bags while delivering products spoils the environment on large scale. Thus, the
organization should perform CSR activities for the betterment of society (Osterwalder and
Pigneur, 2010).
TASK 4
P5: Internal analysis of organization for identification of strengths and weaknesses
Along with the external factor, internal factors also makes huge impact on the
business operation of an organization. Therefore, the management of Tesco are liable to
conduct SWOT analysis in order to identify their actual strengths and weaknesses so as to
remove them as early as possible.
SWOT analysis:
Strengths:
 Tesco is sixth largest retail organization in world on the basis of revenues generated
by them every year (Nishitani and et. al., 2012).
 The company has achieved strong brand identity in competitive market world thus
more trustable and reliable by customers.
 It has operated its business functions in different countries and capture 28.12% of the
market share of UK itself.
 Using advanced technology in the process of business activities due to which they can
provide quality food products at an affordable prices.
Weaknesses:
 There are large number of small retailers in UK which shifts large number of
customers towards them.
 Tesco has indulged in various controversies related yo quality of their product due to
which their brand image are much affected (Kang, Lee and Kim, 2010).
 Customers has wrong perception that low-priced products carry low quality due to
which Tesco sometimes may failed to attract customers.
Opportunities

 The organization should focuses on merging with other companies delegating in same
sector which help them in generating huge sales and revenues.
 Tesco should also required to sell their food products through online which affects
their sales figure in positive manner.
 Should required to market their products through using various promotional tools
such as social media, advertising on newspaper, TV etc. which helps in influencing
the interest and buying behavior of customers.
Threats
 Due to high completion in retail industry such as Marks and Spencer affects their
customer base (López-Gamero, Molina-Azorín and Claver-Cortés, 20117).
 Changes in economy of country in which they are operates may affected their
business operations and profitability.
 Because of increasing the prices of labors, Tesco should spend more which affects
their annual income.
TASK 5
P6: Interrelation of macro-environmental factors with organizational strength and weaknesses
The management of an organization are required to interrelate macro-environmental
factors with their strengths and weaknesses through which they have an opportunity to utilize
their strengths in order to achieve desired goals and objectives within limited period of time.
PEST analysis help Tesco in identifying the affect of external factors and their strengths and
weaknesses of Tesco which are given as below:
Political: It is related with factor which changes the decision of management of Tesco
regarding expanding business to other countries. The company should required to expand to
such country in which government are more stable.
Strengths: The management of Tesco has formed different legal teams who are liable
to identify such country where the chances of achieving growth of business are more.
Weaknesses: It has operated in different countries due to which rules and regulation
of each county will be difficult for management to understand (Kolk, 2016).
Economical: Every country has different economical conditions which affects the purchasing
power of people as well. It will affects the sales figure of company thus need to analyses and
follow economic policies reading various segments.
Strengths: Tesco has captured approx. 24.8% in UK where the economy are more
stable. It will help them in achieving huge profitability.

Weaknesses: Higher international exchange rated in different countries affects their
sustainability and profitability.
Social: This factors includes interests and preferences of customers which affects the
production activity of an organization. The management need to determine all such factors
and identity the food products which are more in demand.
Strengths: R&D of Tesco are held liable to conduct research and find out which
products maximizes the interest and satisfaction level of customers. This will help company
in producing such demanded products in large quantities.
Weaknesses: Issues may arises between the employees due to conflicting inters
taming between them which will bring negative result to company.
Technological: It is related with technologies which help company in reducing wastage and
produce optimum quality products. As Tesco has generate huge revenues every revenues thus
they are more capable to implement advanced technology in the process of performing
different business activities.
Strengths: It helps in producing quality products with minimum cost of production
which improves their image in front of the customers.
Weaknesses: Adoption of advanced technology required huge amounts and if such
implementation will not bring profitable result to company then such funds goes waste.
CONCLUSION
It has been concluded from the above project report that an organization with an
effective management can able to achieve growth and success in competitive market
environment through performing in complex business environment in an effective and
efficient manner. There are internal as well as external factored which also need to be
considered by management and determine their impact on b business operation through
which they are able to make corrective actions and plans in order to cop up with such
influencing factors.

REFERENCES
Books and Journals
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance.The Review of Economics and Statistics. 93(1). pp.309-337.
Dahan, N. M. And et. al., 2010. Corporate-NGO collaboration: Co-creating new business
models for developing markets. Long range planning. 43(2). pp.326-342.
Hall, T. J., 2011. The triple bottom line: what is it and how does it work?. Indiana business
review. 86(1). p.4.
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford
University Press, USA.
Kang, D., Lee, J. and Kim, K., 2010. Alignment of Business Enterprise Architectures using
fact-based ontologies.Expert Systems with Applications. 37(4). pp.3274-3283.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study.
Journal of Business Research. 64(4). pp.427-435.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on
Japanese manufacturing firms. Journal of environmental management. 105. pp.121-
130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for
visionaries, game changers, and challengers. John Wiley & Sons.
Saleem, M. A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of Society and Space. 8(1).
Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
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
Relationships between PEST and SWOT. 2017. [Online]. Available through:
<http://smallbusiness.chron.com/relationships-between-pest-swot-10083.html>.