Business and Business Environment Report: Tesco Case Study Analysis

This report provides a comprehensive analysis of Tesco's business environment, encompassing various organizational aspects. It begins by differentiating between public, private, and voluntary organizations, providing examples like the BBC and Action Against Hunger, and then focuses on Tesco as a case study. The report delves into Tesco's legal structure, purpose, size, scope, vision, mission, and stakeholders. It examines the interrelationship between different organizational functions, such as finance, marketing, operations, and human resources, highlighting their collaborative roles in achieving common goals. Furthermore, the report explores the positive and negative impacts of the macro environment on Tesco's operations, followed by an internal and external analysis to identify the company's strengths and weaknesses and how these relate to external factors. The report concludes with a summary of key findings and references to relevant sources.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organizations.......................................................................1
P2 Size and scope of a range of different types of organizations...............................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions.......................................................4
TASK 3............................................................................................................................................6
P4 Positive and negative impacts upon macro environment upon business operations.............6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of organization to identify strengths and weaknesses............8
P6 Strengths and weaknesses interrelate with external macro factors........................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................11

INTRODUCTION
Business environment of an organization includes all internal and external factors of
environment which have impact on operations and activities of company. It also includes all the
individuals and other entities who have interest in firm (Botha, Kourie and Snyman, 2014). The
current report is based on Tesco, it is an multinational British retailer. It is headquartered in
Welwyn Garden City, UK. This is world largest grocery and general business in retail industry.
This assignment specifies different types and purpose of organizations that are public, private
and voluntary. Furthermore, interrelationship of various functions and their link with structure is
stated. Besides this positive and negative impact of macro environment on operations of business
is defined. In addition to this, internal strengths and weaknesses of firm interrelationship with
external macro factors is described in the report.
TASK 1
P1 Different types and purposes of organizations
There are different types of organizations which have different purpose and reasons.
These are public, private and Voluntary organizations which are explained as follows:
Public organization: This kind of companies are managed and owned by the government
with full control. They do not operate for making profits but for serving the nation. They arrange
funds from taxes, fee and from other financial transactions of government (Prajogo, 2016). Public
companies provide their products and services at less cost than private sector companies as they
are highly focused towards satisfying their consumers. These organizations serves in education,
electricity, healthcare, police services, infrastructure, gas and oil. British Broadcasting
Corporation (BBC) is a public service broadcaster which is oldest and largest broadcaster of the
world. It is headquartered in London, United Kingdom.
BBC Legal structure:
Shareholders – It is also known as stockholders who is an individual, company and
institutions which manage at least one share of the company stock.
Board of directors (BBC) – It is the group of people who are supervise and manage all
business operations and activities of an organization which main motive is to earn profit.
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Board committee – There are various number of committee which are made up of non
executive director as required by the Charter. It includes Audit and Risk Committee and many
more.
Purpose: Main purpose of these organizations are to provide their services to whole
nation. So that they can help in development of country. Purpose of BBC is to serve public by
make them inform, educate and entertain, to support individuals in learning. They provide
innovative and high quality services to serve diverse communities of nation.
Legal structures:
State government: This is an authority of subdivision of nation that part and coordinate
political rights with government of country. They have power of making decisions and
controlling functioning of state.
Local government: It is lowest level of governing body of of a territorial division that are
city, district and town . They ascertain and conduct measures for developing and enhancing
conditions of region.
Central government: This is higher association that distribute power with other level
bodies which are state, local, regional. They formulates laws and rules for entire nation for
governing and taking care that economic state of nation develops.
For example, BBC company follow central government through which they distribute
power with the other level authorities under state, local and regional.
Private organization: These companies are operated and controlled by individuals and
organizations, not by the government (Wetherly, 2014). These companies run their business
activities for making profits as much as they can. There is very less involvement of government
in the activities and interest of company. Private organizations make high contribution in
economy. They set prices of goods and services by making comparison with the prices of their
rival companies. TESCO is a private multinational organization dealing in groceries. It has
headquarter in Welwyn Garden City, UK.
TESCO legal structure:
Store manager – They are managers of the company who are responsible for all business
services and facilities which are maintained in the store.
Regional manager – They are such person who are responsible for handle and manage all
regional operations and functions in order to attract large number of customers.
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Food and safety manager – In an organization, they are manage and opearte all food
quality based functions and operations in effective manner.
Purpose: This kind of organizations' purpose is to make profits by providing products and
services to the target customers. Aim of Tesco is to provide economic household goods by
reducing costs or prices and offering more products in their stores.
Legal structures:
Sole trader: It is kind of firm that are incorporated and run by single person for making
income for their livelihood. These scale of organization which are regulated by an individual aid
them to make fast decision-making. But, they have shortage of resources which impact on market
reach and business (Reynolds and Rohlin, 2014).
Partnership: This is another form of private in which two or more people that work in
collaboration for generating profit. All partners signs partnership deed that defines rights and
rules for making them function effectively. This scale of companies have sufficient resources to
have large coverage and customers for making higher profitability.
For example, TESCO follow sole trader legal structure where they are sale different and
unique type of products and services to their customers in the large market place. With this, they
are satisfy all needs and demand of buyers in proper manner in order to gain high income and
profitability.
Voluntary sectors: These organizations undertake activities which are related to the
welfare of the society. They are nonprofit and non-governmental organizations. In this they do
not earn money as they are indulging in charity work. Individuals come in this sector as they
want to help in development of society and they are not focused on profit making. Action
against hunger is a nonprofit organization which provide food solutions to hungry peoples. This
was established to eliminate the world hunger.
Action against hunger legal structure: Beneficiaries – They are offer variety of services and facilities to the poor people for
giving benefit to the company. Protectors – In an organization, the protectors are work voluntary for reaching with needy
people who required help regarding home, food and so more services. Trustees – They are donate their money for help poor and needy people to the voluntary
organization which reduces difficulties of the users.
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Purpose: Main aim of these organization in this sector is to provide benefit and develop
society by providing solutions to social issues (Sodeyfi, 2016). Purpose of Action against hunger
is to reduce the number of malnourished child provides access of water and solution to reduce
hunger.
Legal structure:
Trust – This is the type of voluntary organization in which money should be managed
and maintained in proper manner for reach with end goals and targets. It establishes the
relationship with three parties which includes trustees, donors and beneficiaries. In this, trust are
non democratic organization which have no membership structure.
An incorporated association – It is that type of legal structure which are mainly used by
small businesses for attaining short time goals, lower income and it is not intend to employ large
number of people.
Action against hunger follow trustee legal structure which they are offering services and
facilities to poor people.
P2 Size and scope of a range of different types of organizations
Public, private and voluntary are three forms of organization which vary in context of
size, scope, objective which is specifies below:
Public organization: British Broadcasting Corporation (BBC) is public firm which has
headquarter in London, United Kingdom. This is largest organization which is conducting
business globally that help seniors make profit of about £4.954 billion.
 Products and services: British Broadcasting Corporation offers broadcasting, web portal,
radio facilities to people.
 Size and scope: British Broadcasting Corporation has branches internationally for which
around 21, 000 staff members are employed for providing items and services to public.
Company's scope is to maintain their market
 Vision, mission and business objectives: Vision of British Broadcasting Corporation is to
be most inventive firm which provide good services to people. Mission is to enhance
individual's life by providing them services, education and entertainment (Solomon and
et. al., 2014). Stakeholders: Investors, employees, suppliers, public and other people which contribute
in business. British Broadcasting Corporation beginner is John Reith which has other
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members support in running business that are Sir David Clementi as chairman, Lord Hall
of Birkenhead (Director- general) and Anne Bulford (Deputy Managing director).
Private organization: TESCO is international firm which has headquarter in England, United
Kingdom. This is top company which is ninth retailer in all over world which help firm to have
large customer base and market reach.
 Products and services: TESCO provide different items which are clothes, furniture,
books, petrol, financial and internet services to people.
 Size and scope: TESCO outlets in various countries are about 6, 500 which help firm to
make profit of £55.9 billion. Company have around 476,000 staff members for providing
quality products and services to buyers (Arasti, Zandi and Bahmani, 2014).
 Vision, mission and business objectives: Vision of TESCO is to create loyal buyers and
dedicated employees for growth of firm. Mission is to become top retail firm in all over
the world. Goal of TESCO is providing quality and trendy items to customers for position
firm superior than rivals.
 Stakeholders: Jack Cohen is founding father of TESCO whose team are John Allan (Non-
executive chairman) and Dave Lewis (Team CEO).
Voluntary sectors: Action against hunger is a non- profit organization established in UK, New
York, Spain and many other nation. It is an international humanitarian firm which reduce hunger
condition of nation.
 Products and services: Action against hunger provides basic amenities that are food,
water and other items to needy people. They gives support to malnourished children and
other solutions for sustainable development of country.
 Size and scope: Action against hunger has outlets in nearly 50 countries which help them
to provide services to about 13.6 million individuals. Organization scope is to reduce
hunger level of nation.
 Vision, mission and business objectives: Vision of Action against hunger is to transform
and make whole world free from hunger. Mission is to become as leader that compete
against malnutrition. Company's goal is to provide safe basic items and adequate
solutions to needy people (Belás and et. al., 2014).
 Stakeholders: Action against hunger has large number of workers and volunteers which
help organization to give solutions and services to people.
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TASK 2
P3 Relationship between different organisational functions
Organisational functions helps a business into performing their different activities in an
efficient manner. These functions are performed in order to achieve goals and objectives by
enhancing productivities and profitability. Tesco, is a third largest retailer in the industry. Being a
larger organisation company needs to maintain relationship among all the functional departments
as they collectively work for accomplishment of common goals. The following are the
interrelationship among different functions of Tesco:
Finance function: Every company needs finance and funds for performing their activities
in an efficient manner without facing any shortage of funds. This department make funds
available for every department to conduct their daily activities (Hair Jr and et. al., 2015). In
Tesco, they prepare financial statements of the company to fulfil all legal requirements. They
provide financial information to top level management so they can make effective business
strategies. Finance department is related to the marketing department as it provides enough fund
or finance for conducting various marketing and promotional activities. Production department is
also related to finance as it needs money for producing goods and services. By preparing
estimated budget they allot funds to production function.
Marketing and sales function:This department promote products and services of the
business to attract new and to maintain existing consumers in an innovative way. In Tesco, this
function identifies the need and demands of customers, determine target markets and consumers.
They need to consider preferences and choices of their buyers to make them satisfied and to
increase profits level of company. Their activities includes advertising, packaging and promotion
for designed products. It is related with as it gives information to production or operation
department about needs and want of target consumers by conducting market research so that they
can manufacture products and services accordingly.
Human resource: Role of this function in an organisation is to recruit, select and to
provide required training and development. They helps all employees to increase their skills,
potential and knowledge by giving these opportunities to increase their potential level. HR of
Tesco create rules and policies for employee welfare and to maintain balance in organisation. It
helps in hiring individuals for vacant job posts (Saleem, 2017). If is related to other departments
as they recruit new employees for various department of business. It helps sales and marketing
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function by making availability of individuals for performing activities related to the marketing
of products and services. It also assists in proving skilled and knowledgeable person so that they
can conduct research for analysing the demands of target market.
Research and Development function: This department perform research and
development activities for making innovation and to improve existing products and services. It
focuses on enhancing manufacturing processes to ensure that all the activities are completing in
an effective manner. Tesco can reduce cost from innovative procedures thus they can increase
level of productivity and profitability (Cairncross, 2014). Finance department provides and
allocate funds for conducting research and development. Marketing department provides required
data and information to this department for conducting research in specific areas.
Organisation structure: This is a tactic which state hierarchy that is followed in a firm for
attainment of goals and objectives. Functional, divisional, matrix, project are various structure
that are used by management for distribution of people in different units. Administration of
TESCO uses divisional structure to operate globally. This help firm to have large market reach
and customer base for enhancing sales volume and revenue.
TASK 3
P4 Positive and negative impacts upon macro environment upon business operations
PESTLE analysis is a tool which is used to identify and evaluate the impact of external
factors on business. A business can identify the positive and negative impact of the following
factors to determine their affect on business activity and profits:
Political factor: This factor includes the intervention of government in business processes
and activities. As Tesco is operating its activities on a large level so actions and decision taken by
the government have a large and significant impact on its activities (Shenkar, Luo and Chi,
2014).
Positive impact: Government of UK is encouraging domestic employment. So by this
Tesco will have diversity in workforce and their products.
Negative impact: Due to change in taxation policies Tesco will have to scarifies their
profits as they have to pay more amount to the government.
Economical factor: Theses factors includes economic growth, interest, inflation, foreign
exchange, unemployment rate etc. all these factors impacts the decisions and strategies made by
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the company. Tesco will have great impacts as these factors will affect the productivity and
profitability of company.
Positive impact: Decrease in interest rate will have an positive impact as Tesco can
borrow more money at low cost.
Negative impact: High unemployment rate in nation will leads to low demand of products
and services from customers.
Social factor: It includes the factors related to the society like demographics, culture,
education and attitudes etc. Tesco is focusing on producing goods and services according to the
beliefs and attitudes of the consumers.
Positive impact: Company will have chances to increase their customer base and
profitability by providing products as per the demand of consumers.
Negative impact: Change in consumers perception and attitudes for the products will
move them to the other products and services of rival firm (Kolk, 2016).
Technological factor:These factors includes technical aspects related to the industry.
These can be change and innovation of new technology, adoption of effective processes for
achieving higher productivity and profitability.
Positive impact: Technology has provided online shopping which has created the ease for
organization for providing there services to customers.
Negative impact: Introduction of new technology by competitors by be harmful for the
company as it will attract and capture their market share.
Environmental factor: It includes aspects which are related to the environment and
ecological conditions of nation. Tesco is determined for decrease 50% carbon footprint by 2020.
Positive impact: Focus on improvement of environmental factors will improve their
business processes.
Negative impact: Unfavorable climate changes will affect the way business is doing its
activities.
Legal factor: These are the rules and regulations related to industry. It consists consumer
rights, health and safety, standards of advertising etc. Tesco influenced on health and securiy of
their consumers and employees (Eurich, Weiblen and Breitenmoser, 2014).
Positive impact: Focus on protection of consumers interest will create a good brand
image of company.
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Negative impact: Unfavorable change in standards and laws will have negative impact on
the activities of Tesco.
TASK 4
P5 Internal and external analysis of organization to identify strengths and weaknesses
Swot analysis determine and analyze the external and internal factors that affects the
business of a company. The following is SWOT analysis of Tesco:
Strength - TESCO Plc mainly serves ample number of customers consists with drilling
contractors, equipment brokers, oil and gas companies. With the help of this sort of customer
base, this organisation have not made themselves dependent upon a single segment or company
for its revenues and this can be considered as a strength for this business organisation. On the
other hand, TESCO Plc, already carry heavy pressure that led to face price wars and this have
given high competitive advantages (Charter, 2017).
Weaknesses – It is being analysed that. TESCO Plc have been through heavy
controversies with a number of business organisations like Varco and Weatherford for violating
some of their patents. This have led TESCO Plc to face number of issues like legal costs
increased for defending the infringement claims. Along with this, if any of the claims proven
right can impact TESCO's business and image and this can be considered as a weakness for this
organisation.
Opportunities: Tesco has opportunity to invest in research and development as it runs its
business in competitive market. It will help in improve current technology. Company can make
strategic alliances with other companies to get better access. It has opportunities for increasing
their online customer base.
Threats: Company deals in global market and it is very uncertain to be make constant
profitability. Competitive market will lead them to share their profit share with other companies.
Labor threat has increase due to the high wage rates in global market (Zsambok and Klein,
2017).
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