Business Environment Report: Macro Factors Impacting TESCO Operations

This report provides a comprehensive analysis of TESCO's business environment, examining both internal and external factors. It begins by defining the business environment and highlighting the significance of macro factors such as political, economic, social, technological, environmental, and legal influences, using the PESTLE framework to assess their positive and negative impacts. The report then delves into TESCO's internal environment using a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The interrelation between macro factors and TESCO's strengths and weaknesses is also discussed. The analysis includes examples of how changes in political regulations, economic trends, social shifts, and technological advancements affect TESCO's operations. The report concludes by summarizing the key findings and emphasizing the importance of understanding both micro and macro factors for effective business management and strategic decision-making, supported by references to academic journals and publications.

Business
Environment

Introduction
Business environment is defined as the combination of internal and external factors. This
business environment include supplier, government, market economic trend etc. in this external
business environment include political, economic, and legal etc. In this manager of Organization
should understand the environment. TESCO is the third largest retailer in world by gross revenue
its headquarter is in Welwyn garden city, UK. In this report its help in understand negative and
positive aspect of macro environment on the business. At last this is effective in understanding
the SWOT of the company with the interrelationship with of macro factors.
TASK 1
P1. Identify the negative and positive impact of macro environment on
business operations with example.
In this there are many factors which affect the business it may be negative and positive.
With the help of PESTLE analysis it is easy to understand macro factors which give negative and
positive impact on the business operations.
Political factors: This are the factors which is determine as the extent in which a
government influence certain business with their rules and regulation. These political factors
include tax policy; fiscal policy etc. changes in the rules and regulation give negative impact on
the business. When UK government change its rules and regulation regarding the businesses then
its affect the businesses operation. Changing in the rules and regulation create problem and risk
to set up again. For example in 2014 a group of local council asked UK government for changes
in tax. This is refuse by the government and similarly political initiative may succeed in the
future with the negative impact on Tesco. In this there is positive impact in this buying poltical
risk insurance the way from which business can manage its political risk.
Economic environment: In this there is a some economic factors which affect the
business such as interest rate, supply rate etc. This factors has some positive point and some are
the negative points. In this for businesses are a positive point for example it help TESCO
Company for the growth and the development. The amount of money is invested for the growth.
In this there are some negative aspect are also there for example: at the time of recession
businesses face a lot of losses this affect businesses negatively.
Social environment: These are the factors which affect the businesses in several ways.
In this now days society is changing on the continue bases. In this now the customer is more
related to the network in which the more dependent on the technology. This technology factors
also affect the businesses. In this businesses need to focus on the every aspect like cultural
changes. The positive part of in the this in this if company is not focuses on the changes then its
create the negative impact on the customer.

Technology environment: This technology affects businesses in many various ways.
This work very effective in term of business in this in business all the information of customer or
the businesses can be gathered easily. This negative and positive part in this technology effective
in time saving and for the up gradation. For example company like TESCO is effective in which
advanced technology is used for retaining its customer for so long. This also has its negative part
in which through the help of technology other competitors want to break the goodwill of the
business in the market.
Environmental factors: In this there are internal and external factors which affect the
businesses. For example with the high pressure of environmental issue and adopt ways ways of
operations which help in becoming better society. In this Tesco reduce carbon by 50% for the
betterment of the society.
Legal environment: This are the term which is used in the favor of employee in the
businesses. This is the term and rules which is made by the government for the welfare of
employee who are working in the organization. For example the food retailing commission in
2004 suggested a code of practice should be introduced which would be ban many current
practices such as changing prices. This work positively in term of welfare of the employee.
TASK 2
P2 Discuss the internal and external environment of the businesses
For understanding the internal and external environment of the business it can be easy to
understand with the SWOT. In this SWOT analysis explain the strengths, weaknesses, opportunity of the
business. SWOT of TESCO Company is explained below:
Strengths: This is define as the positive part of the businesses that what are the plus and
positive point of the company. In term of TESCO THERE are several part of TASCO company which is
work as the strengths for this company.
 Tesco is the company which won the many various award for the its retail excellence and also
the overall shopping experience.
 TESCO is the company which is considered as the one the most largest and profitable retail
format in the world. this also provide strong financial positions.
 This company as known for the cash reserved and the have a wide range of property .
 This company is consider the brand equality it it name and with the global reorganization and
respect. This is stand for the quality, selection and services.
 This retailer company has long standing history in the UK giving it assurance that it will be
continue in the long term in future.
 This company has improved the use of the technology throughout the operations.

Weakness : This is define as the drawback of the company. That an organization should focus and
improve it :
 In this there many subsidiaries which are not operating well and as they are more vulnerable to
certain external factors.
 In this some of the retail formats in certain countries has not performed according to the
expectation. It is suggesting the TESCO might not done as much marketing research according to
the requirement
 In this customer are not buying this because having less disposal income and the retailes is not
adjusted its inventory and selection.
 This company is more focus on UK and its sales. This has to spent some time and source on
developing other market.
Opportunity: This is known as area from which an organization grow more in the market.
 In this there are the opportunity in the private label market.
 New market still holding opportunities for certain retails format that TESCO is already offers but
that can provide better access to the western good area this demand
Threat: This is known as the factors from which an organization should take care.
 In this economic recession and the credit crunches will continue to threaten market share and
opportunities in the area of reducing size of purchase which made by the customers.
 Food prices are the high around the world which is also reduce the buying behavior of customer
and disposable income.
P3.Interrelation between macro factors and Strengths and weakness of the
business operations
In this there are the relationships between the macro factors and Strengths and weakness which
is explained below:
Strengths: This is considered as positive part of the organization in this all the factors of macro
environment can relate with this. In TESCO it has improved the use of technological factors throughout
the operation of the businesses this help in creating the greater cost efficiencies and enhanced service
experience. Its various store formats appeal to local and cultural needs, helping its offers a more
personalized service experience. Technological factor affect the strengths of the business.
Weakness: Some of the retail formats in certain countries have not performed effectively.
Competitive pressures have led to price wars that have nor performed as well as expected, suggesting
TESCO might not have done as much market research as they should have done. The weakness of
business affect the business operations.

Conclusion
From the above mention report it has been concluded that business environment is define
as the combination of internal and external environment. There are many factors which affect
the business operations the can be negative and this can be positive. There are some political
factors which affect the businesses positively and negatively. In the organization there are some
micro and macro factors which affect the organization. Macro factors can be understand by the
PESTLE model. Micro factors can be understand by the SWOT analysis. In the model its show s
Strengths and weakness of the company and its relate to the macro factors. This study shows the
effect of micro and macro factors on the business operation.

References and journals
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Siewiorek, A., Saarinen, E., Lainema, T. and Lehtinen, E., 2012. Learning leadership skills in a
simulated business environment. Computers & Education, 58(1), pp.121-135.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.

Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics, 114, pp.159-171.
Lee, J., Kao, H.A. and Yang, S., 2014. Service innovation and smart analytics for industry 4.0
and big data environment. Procedia Cirp, 16, pp.3-8.