Business Environment Report: TESCO's Macro and Micro Analysis

This report provides a comprehensive analysis of the business environment, focusing on TESCO as a case study. It begins by defining the business environment and exploring different forms of organizations, including for-profit, non-profit, and non-governmental organizations, along with their respective sectors (public, private, and voluntary). The report then delves into the size and scope of organizations, differentiating between micro, small, medium, and large scales. Key concepts such as organizational structure are discussed, with an emphasis on line, divisional, functional, and matrix structures. The analysis extends to the application of PESTEL and SWOT frameworks to assess the impact of macro-environmental factors on TESCO's operations, including an internal and external analysis. The interrelation between strengths, weaknesses, and external macro factors is also examined. The report concludes with a summary of findings and provides relevant references.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different forms of organisation.............................................................................................1
P2 Size and scope of organisations............................................................................................3
P3 Organisation structure and functions.....................................................................................5
TASK 2............................................................................................................................................7
P4 Positive and negative impact of Macro environmental factors an organisation operations...7
P5 Internal and External analysis of TESCO..............................................................................8
P6 Interrelation of Strength and weakness with external Macro factors ...................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is defined as place where operations are executed by individuals to
attain goals and objectives. Management require to asses internal and external factors to ascertain
market situations and system abilities. Shareholders, employees, suppliers, partners and
customers are various components whose responsibility is to deliver adequate items and services
in marketplace (Bah and Fang, 2015). Present report is based on TESCO which is popular retail
store established in UK. Executive require to provide different variety of items in according to
needs and wants of people. This assignment defines various kinds of organisation such as micro,
small, medium and large; that vary with each other on basis of scope, size, structure and
objective. Organisation have different departments such as HR, production, marketing, sales,
research and development. Management require to coordinate their work and take care
appropriate activities are executed in system. PESTEL and SWOT analysis helps superior to
identify effect of macro environment factors have on system performance.
TASK 1
P1 Different forms of organisation
Business environment consists various kinds of firms which vary with each other as they
have different size, scope, structure and objective. Individuals started enterprise to deliver
adequate items and services in market; thereby fulfil needs and wants of people (Georgescu and
Popescul, 2015). Therefore, these are different forms of firms which are stated below:
Basis of Comparison For Profit NPO NGO
Meaning This aspect include
enterprises which
individuals started to
deliver items and
services in market to
generate adequate
revenue from business.
Entrepreneur prime
motive is to improve
This element defines
those firms which are
established by persons
to provide products
and services to fulfil
needs and wants of
public. Profit
generated from
business is invested
This is specified as
non- government
corporations which are
started by individuals
to provide welfare to
society. These
organisation get
support from
regulatory bodies as
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market position and
image, thereby incur
large amount of
income.
again in firm as owner
want that operations
are conducted
adequately.
they provide various
benefits such as
taxation and other
schemes to promote
NGOs.
Area of Operations TESCO has outlets in
UK, Asia, Europe and
in many other nations.
NHS provides
healthcare services in
England, Scotland,
Wales and Northern
Ireland.
Oxfam has branches
in worldwide including
UK, Europe, Asia, etc.
Objectives Main motive of such
organisation is to
provide variety of
items to enhance
customer base; thereby
enhance sales and
profitability.
NPO prime goal is to
promote art, science
and commerce
concepts in
marketplace.
Main aim of NGO is to
conduct appropriate
activities to improve
conditions of
community and
economy of country.
Companies TESCO NHS Oxfam
These are various kinds of organisation which have these purposes which are discussed beneath:
Public Sector: This is kind of sector which includes firms that require to function in
according to structure and strategies that are specified by government. Business persons which
are employed in enterprise require to execute adequate business activities as per legal procedure .
Along this, they even require to share profit among people that are involved in business. Crown
prosecution services is a public sector enterprise which prime aim is to give opportunities to
working class individuals (Hair and et. al., 2015).
Purpose: Crown Prosecution services is firm whose aim is to examine cases which are
investigated by police and other organisation. This company duty is to authorities have
prosecuted correct person which has committed offence, so that adequate justice is given to
guilty individual whenever possible.
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Crown Prosecution services has headquarter in London and takes care of criminal cases
of England and Wales.
Private Sector: This form of segment includes enterprises which are set up by
entrepreneurs to generate appropriate profit from business. These organisation provide different
variety of items and services in according to taste and preference of people. This help individual
to garb attention of large number of persons; thereby enhance sales and generate adequate
revenue from business. TESCO is retail store which provides different variety of groceries,
household items and clothes in according to demands and requirements of people.
Purpose: TESCO main aim is to offer wide range of products and services to have
adequate customer base. Retail store includes groceries, household products, clothing and
insurance facilities to people to fulfil their needs and wants. This benefits company to have
adequate number of customer base and enhance profitability.
Voluntary Sector: This segment include organisation which is started by group of
persons which makes agreement and conduct business to attain goals and objectives. These
individuals frame program and plan to deliver adequate items, services and job opportunities.
Oxfam is an example of voluntary sector which conduct activities to overcome difficulties and
problems from market (Eling and Schaper, 2017).
Purpose: Oxfam prime aim is to reduce poverty, relief disaster, conduct research and
enhance employment opportunities, so that people are able to gain adequate money to maintain
living standards. This helps authorities to improve state of country by providing appropriate
facilities to public.
P2 Size and scope of organisations
Market consists various forms of firms which differ with each other on grounds of size
and scope. Thus, this is explanation of size and scope of small, micro, medium and large which
are described beneath: Micro Scale: In this kind of sector, firms which are small in nature and are set up by
individuals to earn adequate funds for their livelihood and for financial security. Such
organisation are started by single person, so it comprises small amount of capital and few
number of members. Panda food grocery store is micro scale firm which has limited
resources that is funds and manpower which is around 20 members.
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 Small Scale: This kind of sector includes businesses which are bigger than micro level
firms. Enterprise have 50 to 100 members so business person is able to generate
adequate revenue from business. These are firms which have priority to expand business
and operate in various segment to increase their customer base. Hence, business person
is has large amount of market share and position (Pearson, 2017). Unicorn is small scale
retail store which has headquarter in UK and 70 members.
Mission: Provide organic products that is fresh and processed food and drink to establish
appropriate image and goodwill in market to attract large number of people. Medium Scale: In this form of sector, organisation have nearly 300 workers which help
individual to carry out appropriate business activities; thereby deliver adequate items and
services in marketplace. This help owner to generate profit to enlarge business and open
branches in same city and in other nations to have large customer base and enhance sales
volume. Exponential-e which is digital firm is medium scale enterprise which has
adequate manpower and able to generate adequate revenue from business.
 Large Scale: This kind of sector consists firms which provide different variety of
products and services in marketplace to grab attention of large number people. These are
organisation which have more than 500 members and is able to generate 250 million
dollars from business (Kolk, 2016). TESCO is appropriate example which is operating
business globally. Firm offers wide range of clothes, groceries and home items to attract
large number of customers which purchase things in according to their requirements and
needs. This help manager to enhance sales volume and generate good amount of profit
from business.
Size: TESCO has large number of branches which help management to have adequate number of
customers. UK, Ireland, Thailand, etc. are various countries where company has outlets to
enhance sales and profitability.
Scope: TESCO prime aim is to construct customer value by delivering quality items to people.
This help firm to satisfy buyers and create loyal clients to enhance image and reputation in
market.
Different types of organisations:
Basis Small Micro Medium Large
Objective This kind of Prime motive of Prime goal of Main purpose of
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sector main aim
of such firms is to
provide items and
services in
according to
demands of
people and
generate adequate
income. This help
proprietor to
maintain good
lifestyle and
utilise market
opportunities
effectively.
owner is to earn
adequate income
and funds for
their livelihood;
thereby became
financially
secured.
organisations is to
operate business
globally. By
expanding
business and
establishing
branch in foreign
nations help
business person to
increase customer
base and sales.
such enterprises is
to provide
different variety
of items to
increase customer
base and incur
large amount of
profit from
business.
Market share Small firm has
70% market share
in UK.
Micro scale has
almost 50% share
in market.
Medium scale has
almost 45% share
in market.
Large scale firm
has nearly 30%
market share.
TESCO is
Growth and
sustainability
Unicorn has
opportunity to
open new
branches in same
city and other
nations to
enhance customer
base.
Panda food
grocery require to
provide quality
items to create
adequate position
in market by
delivering organic
things to
customers.
Exponential-e
has chance to
expand business
in different
nations to have
increase number
of customers and
sales volume.
TESCO is large
scale firm which
have opportunity
to enter into other
market segment
and sustain
profitability.
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P3 Organisation structure and functions
Micro, small, medium-size and large enterprises are various forms of firms which are
present in environment. Every organisation will have different scope, size, objective and
structure which vary on basis of business persons fund availability.
These are various kinds of organisation structure which administration select on basis of size of
firm which are discussed beneath:
Line organisation: This kind of structure is appropriate to be used by micro and small
enterprises which have less number of members. Administration will be able to keep connection
with subordinates and directly communicate information to lower persons. This help
management to make employees perform tasks effectively and attain targets within specified
deadline. Thus, organisation goals and objectives are accomplished timely.
Divisional organisation structure: This is another structure which defines that large
scale firms which have branches in different countries require to use resources efficiently.
TESCO have outlets in UK, Europe, Asia, etc. uses this structure to utilise funds and have
adequate customer base which helps manager to enhance sales and profitability.
Functional organisation: This form of structure is appropriate to be used by medium and
large scale firms which require to utilise funds, material and manpower efficiently.
Administration have large number of amount of capital so they will be able to establish branch in
different nations. Human resource, finance, production, marketing, research and development are
various departments which are formed by top personnels so that business operations are executed
efficiently (Hillson and Murray-Webster, 2017). This organisation structure is used by TESCO
which define that different department such as human resource, finance, production, IT,
marketing, R&D to accomplish goals and objectives timely.
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Matrix Organisation structure: This form of tactic is used by firms to utilise resources by
constructing grid in which employees from each segment is selected to helps manager conduct
project properly. This structure is used by TESCO which has large branches in different nations.
For this, different department are connected to execute activities effectively and enhance
capabilities of members by giving them new and different work from regular exercises.
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Illustration 1: Functional and Divisional Structure
(SOURCE: Functional and Divisional Structure, 2018)

Functions of organisation:
 HR manager of TESCO take care that adequate workforce in available. Along this, they
even motivate and dedicate members to make them function effectively and complete
tasks within specified deadlines. Besides this, finance unit responsibility is to use funds
properly and take care that appropriate business activities are conducted.
 Production department is plays essential role as they provide items and services in
according to taste and preference of customers.
 IT unit members require to use adequate technologies and advertise information to people
about varieties of items provided by TESCO.
 Along this, R&D team require to conduct market survey to anticipate demands of public;
thereby provide adequate products in their stores.
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Illustration 2: Matrix Structure
(Source: Matrix Structure, 2018)

Therefore, these are different department which help administration to conduct activities
effectively and utilise resources efficiently. This benefit executive to increase customer base and
sales. Thus, company is able to generate adequate profit and enhance market position and image.
Transactional organisation structure: This tactic is used by large scale firm which has
outlet in different nations. TESCO uses this structure which helps management to organise and
conduct business globally.
International organisation structure: This is another structure which defines that
organisation uses this aspect to export products to other nation to increase sales volume and
profitability.
TASK 2
P4 Positive and negative impact of Macro environmental factors an organisation operations
PESTEL analysis is tool that is conducted by heads to anticipate external factors and their
influence on business. This help superiors to identify strengths and weaknesses of each element
which are stated below:
Political factors: This component defines that regulatory bodies frame various policies in
respect to taxation so that they are able to manage business operations. Along this, government
has constituted different legislations such as trademark, copyright, patent and so on to secure
intellectual properties of company.
Positive: TESCO is retail store which require that enterprises system function legally which help
executive to increase their market share and reputation (Hamplová and Provazníková, 2015).
Along this, management have license which help them to function legally.
Negative: Administration of TESCO faces various challenges and difficulties as they require to
import and export items from one nation to other. Thus, taxation policy will affect business
operations.
Economic factors: This element specifies that government fix exchange and interest rate
to regulate functionality of business.
Positive: Low interest rate and high growth helps retail sector firms to reduce operation cost and
generate adequate revenue from business. Along this, UK has inflation so people have sufficient
income to purchase items appropriately and fulfil their demands. Thus, TESCO has adequate
customer base which helps manager enhance sales volume and profitability.
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