Business and the Business Environment Report - Analysis of Tesco

This report provides a comprehensive analysis of the business environment, focusing on the multinational retailer Tesco. It begins by defining different types of organizations, including public, private, and voluntary sectors, and examines their size and scope. The report then explores the relationship between various organizational functions, such as finance, human resources, sales, marketing, and research and development, and how they contribute to organizational objectives and structure. A key aspect of the report is an examination of the positive and negative impacts of the macro environment on business operations, considering political, economic, social, technological, environmental, and legal factors. Furthermore, the report conducts an internal and external analysis of Tesco, identifying its strengths, weaknesses, and how they relate to external macro factors. The analysis includes a PESTLE analysis to assess the external environment. The report concludes with a summary of the key findings and their implications for Tesco's strategic decision-making.

Business and the Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Different types and purposes of organisation........................................................................1
P2 Size and scope of a range of different types of organisation.................................................2
LO 2.................................................................................................................................................2
P3 Relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................2
LO 3.................................................................................................................................................4
P4 Positive and negative impact of macro environment has impact on business operations.....4
LO 4.................................................................................................................................................5
P5 Internal and external analysis of specific organisations........................................................5
P6 How strengths and weaknesses interrelate with external macro factors................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment consist important role in enterprise to determined positive and
negative impact on goods and services. There are several organisations do these things in
efficient manner so that desired results can be accomplish (Mueller and Shepherd, 2016). Present
study based on Tesco which is multinational retailer and promote different types of goods and
services in different areas.
For gaining insight information of the present study, it covers different types of
organisation with their size and scope. Furthermore, it considers relationship between different
organisational functions and how they link to organisational objectives and structure. Moreover,
it consists internal and external environment analysis for the organisation.
LO 1
P1 Different types and purposes of organisation
In UK, there are different types of businesses exists that perform functions and operations
that carry desired level of results to attain creativeness and innovations in systematic manner. In
addition to this, following are different enterprises exists those perform effective functions and
operations with desired level of outcomes: Public sector: Public sector enterprise consist operations and functions which owned by
government and exists to provide services to their citizens. In order to process
outsourcing people engage and deliver goods and services in desired manner. Tesco
company deals in public limited company that merchandise retail products and services.
Public sector business has limited liability so that organisation has been set up by their
owners and run to understand commonly (Hansen, Langevang and Urassa, 2018). As a
result, company can share profits to accomplish responsibility with financial liabilities. Private sector: Private sector business consist important role which comprised and owned
for economy benefits. In this consideration, individual and companies run their
operations with intention to make more profitability. For instance, Iceland Foods Ltd. is a
British supermarket chain which emphasis as private sector and sale different types of
food. In this type of business are sole trader who run business with sole trader to maintain
and keep profitability to make success in it.
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 Voluntary sector: Voluntary sector business considered social activity that undertaken by
the enterprise such as non-profit and non-governmental. This sector is also known as
third sector which is contrast to public and private (Dutt, Hawn and Mitchell, 2016). For
instance, Wellcome Trust is one of the largest charity sector business. Voluntary sector
businesses are working with business partnership so that arrangements ascertained among
two or more individuals.
P2 Size and scope of a range of different types of organisation
With respect to deal in different kinds of organisations, it can be stated that size and
scope different from each other. As a result, it ascertained to focus on effectiveness that assists to
deal in operations and functions. Public sector organisation: Tesco deals in public sector enterprise so that it considered
effectiveness that ascertained with several scopes. In this regard, organisation's activities
is fundamental consideration that relates with extent which helps to sell products and
services. It is multinational brand so that there is wide size of operations and functions
successfully develop in the market to deal with innovation and creativeness. Private sector organisation: Iceland supermarket considered their operations and private
sector enterprise so that they are responds to deal with different franchise. It also assists
to operate stores in different sectors. Therefore, the company is operating to supply
products and services that is great emphasis on limited scope.
 Voluntary sector organisation: The Wellcome Trust consider operations and functions in
desired manner to deal in several operations and functions to take proper care of people.
In this regard, extra ordinary improvements in health ascertained that supporting by
public understanding. As a result, there is major investment needed to take research
initiatives.
LO 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure
Different organisation functions consist operations and functions on different things such
as production, sales, marketing, etc. All these considerations helps to focus on gather relevant
information that are related with structure that defined relationship and interaction between
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different part of Tesco and run with different levels. Functions of the business are key specialism
that are divided into marketing, accounts, production, etc. Following are different functions and
they are interrelated with organisational objectives and structure: Finance function: Finance function of Tesco considered different activities that helps to
keep manual and electronic records in the enterprise. This information can be used to
produce different statement for tax purpose and comply with legal requirements.
Information also used that produce management account and enable to review whole
strategy. In order to considered organisation objectives and structure, it can be stated that
finance department is also responsible towards administering employee expenses and
salaries (Dutt, Hawn and Mitchell, 2016). Human resource function: Human resource function in Tesco determines as main
responsibility such as recruitment, selection, training and development of staff. In this
consideration, developing staff to maximise potential ascertained to further expansion of
objectives. Human resource also need to comply with legislation that are applicable in
country (Hansen, Langevang and Urassa, 2018). As a result, towards objectives and
structure, it is linked through create policies that balance organisational needs. Sales and marketing function: In sales and marketing department, Tesco need to conduct
research that helps to develop strategy and goods to satisfy customers requirements. In
this consideration, market investigated with aiming assess preference of customers. This
is because, the chosen organisation has main aim is to satisfy their customers needs and
requirements. Furthermore, with structure it is linked because sales are responsible for
persuading consumers needs and requirements towards end products that are
manufactured with marketing research (Winterhalter, Zeschky and Gassmann, 2017). Administrative function: Administrative function of Tesco ascertained with several tasks
that includes handling, dealing with enquiries, complaints, catering, etc. In addition to
this, documents also produce in different form that assists to maintain premises of
business and equipments to attain overall goals. Towards business objectives and
structure, the company resolved customers orders that can be successfully proceed to
complete tasks (Vij and Bedi, 2016).
 Research and development function: Research and development functions of Tesco
determined improvement in existing products and services that create new and better
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products. In this regard, production method can be improve that create effective processes
in systematic manner (ORGANISATIONAL FUNCTIONS, 2018). It enables to the chosen
organisation to reduce their cost and increase profitability which remain ahead with
competition. Budget to research and development activities ascertained with innovative
results.
LO 3
P4 Positive and negative impact of macro environment has impact on business operations
Macro environment consist factors that are beyond the control of enterprise. Therefore, it
helps to analyse unpredictable environment where Tesco operates with discussing factors that
affect to its performances and operations. Hence, following elements create impact on functions
of the business: Political factors: Tesco operating their functions and operations in different countries.
Therefore, there are different rules and regulations create impact on the business such as
tax rates, current and impending legislations, political stability, unemployment rate, etc.
For instance, import duty on goods can create impact on the company because inventory
ascertained from outside the UK. Furthermore, due to ongoing financial stability in the
world, many governments encourage creating jobs for domestic population (Vij and Bedi,
2016). Hence, employment opportunities turn into demand for products and diversify
workforce. Economic factors: Economic factors are also influencing with concern for most likely to
leverage costs, demand and profitability. Hence, Tesco must aware with changes in
policies, taxations and other factors that affect to accessibility of finance. It is important
to grow internationally so that diversification in the company helps to gain success.
Diversification and presence in the international market ascertained more success in the
business (Dutt, Hawn and Mitchell, 2016). Social factors: Social factors are also influence to the company with social changes,
trends that indicate customers move in the UK towards bulk shopping. As a result,
increased number of non-food items are offered for sales. Type of goods and services
generally demanded by consumers is also influenced by belief and attitude (Schaltegger,
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Hörisch and Freeman, 2017). This is because, customers of Tesco are more aware
towards health issues due to which approach for food is changing constantly. Technological factors: With the help of advancement in the technology, there are several
opportunities for the chosen business continuously expanded in the market. In this
consideration, two main aspects of the business continuously develop with introduction
of online shopping with facility of home delivery. Furthermore, self-service checkout
points provide convenience and ease for customers (Dutt, Hawn and Mitchell, 2016). As
a result, it turns into Tesco with reduction in labour cost. The chosen company is also
invested significant amount on energy to fulfil their long term objectives that reduce
carbon footprint as well. In order to increase convenience shopping, it can be stated that
time and labour cost will be save successfully. Environmental factors: There are many companies facing issue of immense pressure
from government agencies that helps to solve issues and problems. In addition to this,
companies are also liable to respond these issues that are beneficial for society. In Tesco,
it is essential to encourage customers to save fuel saving routes that helps to collect
unwanted waste material as well (PESTLE Analysis for Tesco discusses its Business
Environment, 2018). The chosen business is committed with use of renewable sources
and generate 100% electricity in 2030.
 Legal factors: In the business legal environment, there are several key areas exists where
law changes that can be affect to performances that ascertained to accomplishment of
objectives. Furthermore, staff members are extremely frustrated with payment wage of
the company. Hence, Tesco faced legal action towards accounting fraud and misleading
with the investors. They need to conduct operations accordance with food retailing
commission (Winterhalter, Zeschky and Gassmann, 2017). Government policies and
legislations are also directly impact on the performances of the chosen organisation.
LO 4
P5 Internal and external analysis of specific organisations
In order to gain desired level of results, internal and external environment analysis assists
to promote more desired outcomes in systematic manner. In this consideration, Tesco operate in
different areas that assists to deal with innovative functions with numerous external forces that
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helps to increase competitive environment (Schaltegger, Hörisch and Freeman, 2017). Therefore,
following aspects can be successfully develop at workplace of the chosen business:
Strength
 Tesco operating with excellence customer services so that it impact positive on existing
customers.
 The company also considered one of the largest and more profitability in supermarket
that helps to emulate and compete with several competitors in large areas of the market.
As a result, it is more profitable to provide wide range of variety (Zur Muehlen and
Shapiro, 2015).
 Tesco has significant cash reserve so that it provides strong financial position in all types
of economic cycle.
 The company develop brand equity with global recognition which stand for in terms of
quality, selection and services.
 Availability of several numbers of stores assists to deal with more customers that appeal
to local and cultural needs of the customers. It helps to offer more personalised service
experience (Ko and Kirsch, 2017). Improvement in use of technology throughout operations and create greater cost
efficiencies increase more service experience.
Weaknesses
 There are several subsidiary businesses of Tesco those are not operating in increment in
financial profits so that it adversely impact on recent credit crises which rebound from
global event.
 High competitive pressure have led into price wars that eroded with retailer profits
margin when the chosen business focused on other way to gain more competitive
advantages (Mueller and Shepherd, 2016).
 Some of the retail formats in certain countries not performed so that expected outcomes
suggested which done into market research that need to be done in systematic manner.
 Consumers also not buying as many items are related with having disposal income so that
Tesco need to adjust their inventory and selection with high cost.
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 Retailers are also highly depend on UK and Europe with its sales so that they spent time
and resources in developing market in its strategic intent. Hence, the company need to
trying and serve in many markets (Madhavaram and Hunt, 2017).
Opportunities
 There are such opportunities towards strategic alliances and other brands that assists to
offers several products and attract more customers in certain areas.
 In different countries, Tesco also underperforming so that there could be opportunities to
work under joint venture in which local company helps to conduct market research. In
addition to this, market intelligence also develop that improve performances in different
areas easily (Dutt, Hawn and Mitchell, 2016).
 There are significant opportunities to grow online shopping for Tesco with home delivery
services in different areas.
 There are several opportunities exists regarding private label market. Emerging market also hold different opportunities in several retail formats so that Tesco
also offers to provide better access to accomplish goals.
Threats
 Economic recession and credit crunch continue threaten to the market share and
profitability of the chosen business in different areas of the world. It reduces number and
size of purchase which is made by consumers (Schaltegger, Hörisch and Freeman, 2017).
 Competitive threats are also coming from global retail giants so that it assists to offer
products at lower prices and greater variety in different areas.
 More innovative and creative products are also required advance technology in effective
manner.
 Food prices are also rising which also reduce consumers can buy and disposal income
which available in front of them.
 Labour threat also increased wages and benefits around the world so that it add cost basis
that put pressure in pricing strategy (Yashkova, Sineva and Kolosova, 2016).
 Rising raw material cost also threatening to the chosen company's profitability and it is
cause to expand supplier network to get pricing on raw material.
 Government regulations and political landscape is also putting high pressure on the
chosen business that adhere to new regulations. As a result, the chosen company need to
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make significant changes for their operating structure for additional expenses
(Winterhalter, Zeschky and Gassmann, 2017).
 With greater stakeholder pressure, environment get suspected. Social responsibility also
adversely impact on Tesco.
P6 How strengths and weaknesses interrelate with external macro factors
Social factors affected in the Tesco with making and considered good products for
different customers. Customer behaviour is main theme of business strategy which helps to make
conscious towards healthy food that adopted in particular business environment. Along with this,
social environment strategy also assists to decision making effectiveness which helps to make
loyalty and right thinking of the selected enterprise (Vij and Bedi, 2016). Furthermore,
technological environment assists to give right information from the enterprise so that strategies
decision assists to make sure that it helps to deal with purchasing behaviour. In respect to
consider interrelationship between external macro factors and strength & weaknesses, following
are certain points considered in the Tesco: Political factors: Tesco operating for excellence customers services so that government is
also looking for safety of customers. In this regard, the chosen company cover different
areas of the international market that assists to focus on goals and objectives which would
be beneficial to perform well in global market (Hansen, Langevang and Urassa, 2018). Economic factors: In the market, there are several competitors exists for Tesco so that in
whole world different services of the chosen business considered to operate in different
areas of the world such as food, cloth, insurance, etc. The chosen company has loss GBP
which create great impact on the business. Goods are sold on fewer price which create the
biggest problem on total amount (Likoko and Kini, 2017). Social factors: Tesco always focuses on customers needs and demand so that they are
trying to fulfil goals and objectives with different social activities. In this consideration,
main weakness is that the company is not looking to make new products to increase
customer attraction in the business. Technological factors: Furthermore, advance technology of the country impact positively
on the functions and operations that would be beneficial to attain desired level of
outcomes. In this regard, more cost occur in front of the chosen business (Papilaya, Soisa
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and Akib, 2015). Furthermore, Tesco is the third biggest global grocer in the world so
that it shows buying power that assists to make sure mainstream economics of scale. Legal factors: However, Tesco face several problems due to certain weaknesses. In this
consideration, it can be stated that current retail market position increase threat for the
company. There are several rising retail company who compete with Tesco such as Asda,
Morrison, Sainsbury, etc. To deal with different competitors, the chosen business need to
reach global brand and follow all rules and regulations.
 Environmental factors: Moreover, Tesco also facing certain issues that related with
environmental factors. For instance, protection of particular environment and focus on
appropriate working to get advantages from economic environment (Sekaran and Bougie,
2016).
CONCLUSION
From the above report, it can be stated that business environment considered important
role in success of every business. This is because, it contains several activities and tasks that
would be beneficial to increase customer satisfaction at workplace. Furthermore, it also regulates
different activities and tasks that helps to get advantages to collect right information. In this
regard, report included different types of businesses that are dealing in distinctive function and
operation to focus on creativeness. Furthermore, it summarised about size and scope of different
businesses that assists to determine effectiveness of the enterprise in successful manner. As a
result, positive attitude of customers assists to deal with right information to accomplish desired
level of outcomes.
Moreover, it articulated about relationship between different kinds of organisational
functions that are interrelated with business objectives and goals. As a result, it assists to
communicate several benefits in the enterprise. At last, it discussed about interrelationship of
strength and weaknesses with external macro environmental factors.
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