Analysis of Tesco's Business Environment: Internal & External Factors

This report provides a detailed analysis of Tesco's business environment, focusing on the impact of various micro and macro factors on the company's operations and decision-making processes. It begins with an introduction to the importance of the business environment for organizational productivity, followed by an examination of the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal factors) and their specific effects on Tesco. The report also includes a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to evaluate Tesco's internal capabilities and external challenges. Furthermore, it explores the interrelation between internal and external factors, highlighting how these influence strategic decision-making and the achievement of organizational goals. The conclusion emphasizes the significance of understanding these factors for effective business operations and provides relevant references. The report underscores the importance of adapting to the ever-changing business environment to sustain success and growth within the retail sector.

Business and Business
Environment

TABLE OF CONTENT
• Introduction
• Pestel
• Swot
• Impact of company strength and weaknesses on decision making of organization
• Interrelation between external and internal factors of organization
• Impact of micro and macro factors on decision making and objectives of organization

Introduction
The business environment is most important for productivity of organization. This presentation is providing the
brief about impact of different micro and macro factors on the business environment of tesco. The impact of this factors is
also studied for decision making and goal completion of company.

Impact of External Factors on Organization
Political factors
The decision and policies which are implemented by government can have impact on the performance and
business environment of organization. Tesco is a retailer company and change in the import and export policies can affect the
business of Tesco. The product which are imported from international market for sale will be affected by this change in the
government policy. The other changes like change in taxation policy and trade policy of government can affect the business
of organization.
Economic factors
The issues like change in taxation policy, foreign trade policy and economic crisis are included in the economic
issues. Change inn taxation policy can make huge impact on the pricing policy of tesco. Higher tax on good can reduce the
business of organization. The international trade taxation policy can affect the exporting of tesco. Situation like economic
crisis can cause different problems to company. It will affect the employee retention rate of company.

CONT…
Social factors
The social issues like average income of people, education level and culture of locality and company can affect
the business environment of organization. Low average income of people will not be able to buy the premium product of
tesco. This can reduce the business of company. The education level of people or employee can improve the company
productivity. Well trained and educated employee can better understand and implement policies of company. This can
improve the profit of company.
Technological factors
The difference between current technology used in company and latest technology used by competitor can affect
the positioning of tesco in global market. Implementation of the latest technology can improve the business of organization.
The implementation of artificial intelligence, automation, RFID and block chain management technique can improve the
performance and quality of company product which is good to gain market advantage.

CONT…
Environmental factors
The environmental factors like geographic location, weather condition and location of Tesco store can affect the
business of company. Geographical condition of local place decides the reach of customer to the store. If it is difficult to reach
to the local store can cause reduction in profit of company. The extreme weather condition can prevent the company to sale
some weather conscious product in retail store. The location of business, traffic and surrounding also can make huge impact
on the business of Tesco.
Legal factors
The legislation also can make impact on the business of Tesco. In some location some products or good are bane
cause of local tradition culture can prevent the company to sale this product. The bane on liqueur and non vegetarian food can
also reduce the business of organization.

Impact of Internal Factors ON Organization
Strength
• One of the largest grocery and retail store in UK
• Market occupation of Tesco is high.
• Global diversification of Tesco show its market presence.
• High range of product in retail; store.
• Largest employer in UK.
• High technology is implemented in organization.

CONT…
Weaknesses
• Fraud and accounting scandals in organization.
• Decreasing profit of company.
• Financial errors in business.
• Low cost strategy is used in Tesco.
• Poor operational performance.

CONT…
Opportunities
• Engagement and partnership with other global brands.
• Joint ventures can increase the business of Tesco.
• The emerging market in other country are good opportunity to company.
Threats
• Brexit is bigger threat to Tesco.
• Other competitor in the market.
• Economic crisis and recession.

Impact of Internal Factors on Decision Making of
Organization
The different internal factors of organization are related to the SWOT factors of organization. The strengths of
organization can help the organization to improve profit and business of tesco. This strength of organization can help the
organization to take decision related to new changes and innovation in the organization. As the diversification of tesco store
is on global scale and it is difficult to implement changes in the business. This factor can force the company to think about
required changes before implementation. Weaknesses of tesco can prevent company to make changes in the policy of
organization.

Interrelation of Strength and Weakness with the
external Factors of Organization
The external factors are not in control of organization. Different factors can help the organization to improve
the productivity of company. Various external factors like political, economical, social, technological, environment and
legal factor can affect strengths and opportunities of organization. The different policies increase the chances of
company expansion in other countries. Better taxation and foreign policy can help the Tesco to expand its business in
the emerging market. Social factors can affect the market of organization. The poor operational performance of Tesco in
specific market can be improved by changes in economic policy. This is how different external factors can affect
strengths and weaknesses of organization.

Impact of External and Internal Factor on
Decision Making and Goals of organization
The internal and external factors of organization can affect the decision making of Tesco. If company is planning
for introducing innovation in organisation can be supported by strengths of company. The authority can take the decision
with full confidence if internal factors are supporting it. The external factors like government tax policy can prevent the
company to make changes in the pricing policy of company products. It is important for the Tesco to take look at external
and internal factor to make their decision effective in implementation. The threats of economic crisis and inflation can force
the company to make changes in process and policies of company.