Business & Business Environment Report: Tesco's Macro & Micro Analysis

This report provides a comprehensive analysis of Tesco's business environment. It begins by explaining different types of organizations and their characteristics, including public, private, and voluntary sectors, and then explores the size and scope of various organizational structures such as sole proprietorships, partnerships, and corporations. The report analyzes the link between organizational structure, size, and scope with business objectives, as well as the advantages and disadvantages of interrelationships between organizational functions. A PESTLE analysis is applied to assess the macro environment's impact on Tesco. The report further examines the relationship between organizational functions and objectives, analyzes different organizational structures, and identifies the positive and negative impacts of the macro environment on business operations. It also discusses the interrelation of strengths and weaknesses with external macro factors. Finally, the report conducts an internal and external analysis of Tesco to evaluate its strengths and weaknesses, providing a detailed overview of the company's business activities and environment.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P 1. Explain different types of organisation................................................................................1
P 2. Explain the size and scope of a range of different types of organisations...........................2
M.1 Analyse how structure, size, and scope of different organisations link to the business
objectives. ..................................................................................................................................2
M 2. Advantages and Disadvantages of interrelationship between functions............................3
M 3 Apply PESTLE to support analysis of macro environment................................................3
LO2..................................................................................................................................................4
P 3. Explain the relationship between different organisational functions in relation to
objectives and structure. .............................................................................................................4
M 2. Analysing the advantages and disadvantages of different types of organizational
structures and their interrelatedness............................................................................................6
P.4 Identifying the positive and negative impacts the macro environment has upon business
operations. ..................................................................................................................................6
P6. Interrelation of strength and weakness with external macro factors.....................................7
Conduct the internal and external analysis of Tesco in order to analyse strength and
weaknesses. ................................................................................................................................8
CONCLUSION ...............................................................................................................................8
REFRENCES ..................................................................................................................................9

INTRODUCTION
Business environment means all internal and external factors of the firm that impacts
over working of enterprise and that affects functions of employees, customers, supply, demand
and business regulation etc. business environment plays an important role in identifying the
strength and weaknesses of the organization. Assignment is about the businesses and its
environment. Tesco is a British multinational groceries and general retailer. It is headquartered in
Welwyn Garden city, England UK. The present report is based on the business activities of the
Tesco. The assignment will provide the information about various types and purposes of the
organization along with the size scope and range of different types of organization. The
assignment will give the deeper insight of interrelationship between the various organization
along with their advantages and disadvantages. Report will focus on the external and internal
factors and their interrelatedness with each other.
LO1
P 1. Explain different types of organisation.
There are differed kinds of organisations and number of in it divided in three sectors as
public enterprise private enterprise and voluntary sector organisations. The objectives of this
organisation are quite differed from each other.
Public sector- It is owned and run by the legal authorities for the people. In this, individual uses
of pay the taxes to the government and this money used to finance the public sectors (Prajogo,
2016). The main object of public sector enterprise is provides services effectively so that better
resources can be generated and it will provide benefit to the community.
For example- Tesco is working as public sector enterprise. The main aim of this entity is to earn
high amount of profitability by providing effective services to customers. For this, they are
taking various initiatives in manner to make attractive modifications in products so that they can
attract the customers.
Private sector- This enterprise are owned and run by the private individuals. Thus, it may be
inclusive s are franchise, private companies and other for the benefits to the community (Smith,
2016). The main object of private sector enterprise is to make profit, grow business, increment in
market share and this all activities use to maximise the sales.
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For example- Apple is private limited company and it puts its major consideration over the
quality services. The main aim of this firm is to provide products that can be effectively
differentiated from another product in market in functions and design. With help of providing
quality services they can have long term sustainability in market
Voluntary enterprise- This sector is involves in number of enterprise as are charity, non-profit
bodies and business communities etc. This enterprise are generally relates with the non-profit
enterprise and non-governmental enterprise. This enterprise is not set up in terms to earn long
term benefits. This is organises to provide social benefits to the individuals.
For example- It is the kind of charity organisation in the United Kingdom. The aim of this firm is
to provide services to poor people who are not able to deal with the expenses. They provide
services as to diagnosis the problem, treatment, prevention and proper assistance in disability
from cardiovascular disease. This entity also works with the premature death and disability from
cardiovascular disease.
P 2. Explain the size and scope of a range of different types of organisations.
The range of different types of organization includes the sole traders, partnership and
corporations.
Sole proprietorship- It is that type of organization which have small business with one
owner who manufactures one type of goods or a specific services (Prickett, Brennan and
Stolwyk, 2015). The owner of the sole proprietorship have unlimited liability for any sort of
claim for the business that provides affect to owner personally. This type of range of business
served the society or community and basically restricted to local boundaries because of their
size. For instance- the scope of elixir are numerous. It is very much fruitful for the entities that
want to make quick decision. They can also establish their business operations as a partnership.
The business can also add different expert in its operation.
Partnership- Another type of range of organization that is larger than sole
proprietorship. The organisation is known as partnership firm when two or more partners joint
together for the commencement of business in order to achieve one common goal. It range from
minimum two member as an owner or multiple partners. It also have unlimited liability.
Partnership firm can produce the various ranges of products and services but it is still restricted
to set location because of its size.
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Corporations - These are larger than sole proprietorship and partnership. Corporations
have unlimited owners due to ownership of stock and ability of transfer. The owners of
organization are not liable for any of the claim against the business. The boundaries of
corporations are limitless because of their size they produce goods and services internationally.
Private limited company- It is private limited company and it has some restrictions. This kind
of business is very much comfortable for minded people to operate the business functions
systematically. The owner of this firm gets engaged in an operation so that things can be
conducted effectively. Thus, Apple has vast opportunities to expand in various industries with
the accumulation of capita, human resource and skills.
Public limited company- Being the public limited company Asda has ample of opportunities to
enlarge their business activities in the market. Thus, they have options to expand business
investing in new project. For it, they need adequate finance. Thus, managers are responsible for
any management done. It has the vast possibility to raise funds for implementation of its future
plans.
Name of business- Asda house, south bank, west Yorkshire, England.
Number of locations- increment 631 as of 31st January 2017.
Operating income- $ 1 Billion.
Number of employees- 180000
M.1 Analyse how structure, size, and scope of different organisations link to the business
objectives.
Structures sizes and scope of the various organizations is closely associated with the goal
of the business organization. Al Private l businesses are run for common goal that is profit
earning. Profit earning is the primary objective of the business. Organization set their targets
according to the efficiency of their organizational structures. If the organization have less staff in
their structure do not have sound knowledge regarding their roles and responsibilities than it
become impossible to achieve the target due to not have proper clarity in their work. Talking
about the size of the businesses, small organization earns less profit than the larger size
organization. The turnover of small size organization can be $ 1 million but on the other hand the
turnover of large organization is over $1 billion approximately. The business objectives can be
set by reviewing the scope of their business. In any firm serves national customers than they will
set their objective accordingly.
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The structure of includes sole trader, partnership and corporations. The organizational
structure of sole proprietorship is narrow as they have limited functions and can be easily tackle
by the few members of organization (Verschoore, Wegner and Balestrin, 2015). The scope of
these type of organization is very effective as the owner of the firm have all the power to take
decisions and they also requires the less funds. The objective of the organization in corporations
can vary or companies to companies. The overall effectiveness of the organization can provide
the huge impact on the various aspects of organizational objectives.
M 2. Advantages and Disadvantages of interrelationship between functions.
The most important advantage of a function's interrelationship is that grouping of staff
ensures dependable level of department competence (Swoboda, Elsner, and Olejnik, 2015).
Employees are managed by single person with experience in their similar functional area, which
provides them reason to hold for long time. Apart from this, it results in more efficiency and
speed of work as that experience person is likely to do the task much effectively than normal
people. Disadvantage is that, if a single work needs to be done by two departments, which will
result in company losing its competitiveness. For example, if marketing department is in need of
IT and if it is slow then the entire process can be fail in terms to leading to loss of a company.
M 3 Apply PESTLE to support analysis of macro environment.
 Political factors :- since Tesco is a retailing company that operates worldwide, so the
global political forces may adversely affect the company's performance. These include,
tax rate, acts of laws, and stability of the country in which it operates (Rastogi and
Trivedi, 2016). Thus, Apple products charges high taxes and it affects the customer
preferences. This may impacts on the working of the enterprise in harsh manner.
 Economic factors :- it has been determined that, these factors are considered as main
concern for Tesco, as the firm is most like to leverage cost, profits, prices and cost.
Hence, it should be aware of any changes in policies that may arise due to government.
The firm as British heart is also taking initiatives to provide good assistance in terms to
provide monetary benefits to poor people who really need to it.
 Social:- due to variety of changes in trends of customers that occur globally may affect
company's working. Hence, Tesco must raise the number of food items that it offers for
sale. The Apple is also taking initiatives to bring modifications in products and services.
This will help to enhance the brand image in the market.
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 Technological: - nowadays the advancement in technology have brought new
opportunities for various retailing companies operating globally (Swoboda, Elsner, and
Olejnik, 2015). Therefore, Tesco must look towards development and introduction of
online shopping. Furthermore, Apple is also taking various initiatives in terms to bring
modification in product and services. This brings long term retention of products in
market.
 Environmental: - these factors include increase pressure on various organisations to solve
environmental problems and adopt eco-friendly ways that benefit society, Tesco has
reduced its carbon foot print by 50%.
 Legal :- government impose policies and legislations may affect Tesco. To facilitate this,
it should provide its customers with price reduction strategy (Zalengera, Blanchard and
Gondwe, 2014.).
LO2
P 3. Explain the relationship between different organisational functions in relation to objectives
and structure.
It has been determined that each function of an organisation needs to work together, so
that the entire organisation has the same goal and objectives. In order to attain this
communication across various functions Is an important activity (Srihari and et.al., 2015). It
begins with setting up of well-defined objectives with which each functional department is aware
of. Further, then these objectives are required to be broken into specific objective for each
function.
Different types of organisational functions are:
 Design and production: - to create a product or service in a company, will need to join
labour, capital, materials, energy and information (Smith, 2016).
 Finance function: - this function of an organisation keeps records of money received and
paid by them. It has been determined that, it is important to manage the cash flow of a
company, as if not handled properly there are chances that company may lose control
over business.
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 Human resource function :- this function is considered as the most important resource of
a company. Apart from this the responsibility of a human resource manager is to recruit,
select, train and develop employees.
 Sales and marketing function ;- under this function, marketing department finds strategies
to meet customer needs. Marketing department, in its research will investigate the market
they are targeting at (Schenk, 2017.). Further, responsibility of sales department is to
pursue consumers to buy the finished product, manufactured by marketing research.
 Sales and marketing function ;- under this function, marketing department finds strategies
to meet customer needs. Marketing department, in its research will investigate the market
they are targeting at (Prickett, Brennan and Stolwyk, 2015). Further, responsibility of
sales department is to pursue consumers to buy the finished product, manufactured by
marketing research.
 Administrative function:- this function of organisation deals with tasks such as mail
handling, dealing with complaints, computer services etc.
 Research and development function:- it has been determined that the aim of this function
is to enhance current products, develop new and improved products, better the production
method, etc. This function allows an organisation to minimise costs, increase profit and
remain ahead in competition. Distribution department :- this function of an organisation is responsible for collecting
orders & delivering them to consumers at the right time and right place.
Types of organisation structure:-
 Divisional structure :- this type of structure is used in larger companies that run in vast
geographic areas (Prajogo, 2016.). It is link with production department of an
organisation. Further, this type of structure provides flexibility to larger organisations
with several divisions. Divisional structure facilitates coordination and communication
among various functional departments of a company. Thus, Tesco has also adopted
division structure so that they can run their business function in the coordinated manner.
 Functional structure: - This structure is set up in an organisation so that marketing, sales
and production department work smoothly to achieve company's objectives. This type of
structure work well with small businesses in which every department depend on
knowledge of its workers. However, one disadvantage of this function is that it
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communication between departments can be limited. For example- in this, British heart
follows functional structure so that they can able to perform business activities in
systematically manner.
 Matrix structure :- it is another type of organisational structure which is also a hybrid of
divisional & functional structure (Oliveira, Thomas and Espadanal, 2014). It has been
discovered that, this structure is basically used in multinational companies enables
benefits of both the above structures. This department is link with finance department of
a company and ensures completion of work on schedule and within budget.
M 2. Analysing the advantages and disadvantages of different types of organizational structures
and their interrelatedness.
The advantages of the interrelationship between organisational functions is that
specialisation (Naidoo and Gasparatos, 2018). As all departments are made according to their
specialisation so there is less chance of insecurity. Therefore, the disadvantage is that the every
department is segregated on the basis of their function so no other employees of different
department can help there. In this, the Tesco, Apple and British heart is taking various initiatives
in terms to provide effective services so that brand image of the firm can be enhanced.
P.4 Identifying the positive and negative impacts the macro environment has upon business
operations.
Macro environment consisted of some external factors which cannot be controlled and
also effects the decision making, performance and strategies of the organization. The external
factors involves the cultural, economic, legal and technological changes etc. Macro
environmental factors includes-
Political factors
It consisted of government activities and changes in the regulation and polices. The
marketing decisions of Tesco can be affected by the organization (Mylan and et.al., 2015.). For
instance, the Govt. provides the subsidy to the retail business than it positively effects the
marketing decisions of Tesco.
Economic Factors
The economic factors includes the labour cost which is an important economic factor
that can effect the Tesco. The economic factors directly impacts the buying behaviour of the
customer's which provide the negative impact to the Tesco (Kurnia and et.al., 2015). For
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example, the annual bill of amounting 4.5 billion and the increase in minimum wages rate is
increased by 4.4 % for 25 years, therefore, the upward shifts has cost Tesco millions of pounds in
UK.
Social and cultural factors
The target customers of Tesco comes under the social and cultural factors. The social and
cultural factors including changing pattern of consumers can affect the operations of Tesco
negatively as well as positively (Jenkins and Williamson, 2015). Because of social changes the,
trends shows that customers in the UK shifted towards the bulk shopping and one – stop
shopping.
Different types of goods and services demand by consumers is merely get effected by
their beliefs and attitudes which in turn influences the social conditioning.
Technological factors
The changes and advancement in technologies have brought various new opportunities
for Tesco (Burton, Yamin and Young, 2016). Taking an advantage of technology Tesco has
entered themselves in e commerce which not only increases the sales and also helps them in
customers engagements.
Legal factors
Legal factors includes the policies which directly impacts the performance of company.
To facilitate the policies imposed by the government, Tesco renders the its customers price
diminution on the fuel they purchase.
Environmental factors
Due to increased pressure on companies for the addressal of issues related with
environmental also to adopt various ways of operations which provide the benefit to the society.
For this, Tesco committed itself in reducing of carbon footprints by 50 % by 2020.
Therefore, these are some macro factors which provides the positive and negative
impacts on the operations of the business organization.
P6. Interrelation of strength and weakness with external macro factors.
Strength and weakness of Tesco are related with macro factors. Therefore, if company
fails in analysing its strengths and weakness they can not face external factors that affects
enterprise. Thus, it has been explained as per below context-
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 Political factors- this includes legal rules and regulations. Thus, change occurring in these
factor affects Tesco directly. To face and overcome such factors, cited company should
have experts and specialised staffs.
 Economic factors- this factors include change in interest rates, inflation rates, exchange
rates etc. if Tesco is financially stable, then such changing rates will not affect its pricing
and marketing strategy. Cited company must always be ready in order to face such
economic factors.
 Social factors- This includes changing taste and preferences of a society. Thus, to face
such challenges, Tesco must have good staff, workable financial resources and natural
resources. They must have a strength in order to fulfil change taste of the customer in
order to meet objectives by attracting customers (Brownlow, Neely and Urmetzer, 2015).
 Technological factors- Tesco must have strength to update its old technology into new
and latest one. This will help quoted company to meet customers with help of social
media and customers will get easily attracted to them.
 Environmental factors- Tesco use natural resources in order to provide products and
services. So they have to prepare various strategies so that it do not get misused because
it has to follow government laws.
 Legal factors- legal factors includes law that affects business to great extent. The cited
company has to fulfil various procedures regarding laws in order to trade internationally.
◦ Therefore the opportunities and threats of internal analysis interrelates the macro
factors of the organization.
Conduct the internal and external analysis of Tesco in order to analyse strength and weaknesses.
This analytical tool is known to be used for conducting internal analysis of the firm where
in the present context, it has been used for a well-known retail organisation called TESCO. It
basically helps in determining the key strengths of the firm along with its weaknesses,
opportunities and threats. Below is the SWOT analysis of TESCO- Strengths- A foremost forte of this enterprise is its leadership position in the market.
This is specifically in context to its UK based market where it is also known for its
effective online operations. Also, it is known to have a strong portfolio of its property.
Lastly, its Clubcard is depicted to be an effective customer information tool.
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 Weaknesses- Despite of some of its major strengthening factors, it is also known to
have certain weaken areas such as its diminishing financial performance for being
extremely relied on its domestic market, i.e., UK. Other than this, it has also suffered
from reduced morale of its employees. Apart from this, its brand image has severely got
affected because of an income scandal in the year 2015 which has also impacted on its
profitability. Opportunities- There exists several numbers of opportunities for TESCO in terms of
getting ahead towards a successful business recognition. This includes pursuing a
global strategy of market expansion. This will also assist TESCO to grow themselves in
the financial sector to provision such related services as a way of enhancing its non-
food range of retail products. Besides this, it can also adopt various effective strategies
of marketing as a way of reaching large number of customers with efficiently designed
policies that together meet the changing needs of consumers. Already being strong in
accepting the technical advancement in the market, TESCO can refer to undertake more
such technological progressions to enlarge its reach to the consumers.
 Threats- A vital threat to TESCO is from a rising state of competition in the retail
industry of UK. Also, fluctuations in currency is referred to be yet another threat for
which, it has led to incapable cost leadership.
CONCLUSION
From the above study it can be concluded that business environment plays an essential
roles in identifying the current business position, competition outside in market and so on. The
assignment has provided the information about various types and purposes of the organization
along with the size scope and range of different types of organization. The present report is based
on three different organisations as Tesco, Apple and British heart. The assignment has given the
deeper insight of interrelationship between the various organization along with their advantages
and disadvantages. Report has focused on the external and internal factors and their
interrelatedness with each other. It has also covered various negative and positive aspects of the
macro factors in the organisation.
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