Business Environment Analysis of Tesco Corporation: A Report

This report provides a detailed analysis of Tesco's business environment, encompassing both internal and external factors. It begins with an overview of the business environment, highlighting the significance of macro-environmental factors like political, economic, social, technological, and legal aspects. The report then delves into a SWOT analysis, examining Tesco's strengths (e.g., global presence) and weaknesses (e.g., low-cost strategy). Furthermore, the report explores the application of Porter's Five Forces to the retail sector, assessing the threat of new entrants and the bargaining power of suppliers. The conclusion emphasizes the importance of environmental analysis for business sustainability and discusses the different types of organizations. References to academic sources are included, providing a comprehensive understanding of the topic.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of content
■ Introduction
■ LO3
■ LO4
■ Conclusion
■ References

INTRODUCTION
■ Business environment encompasses the
various business activities that help the firm to
gain opportunity and lead to effective
functioning by enhancing the overall growth
and development.
■ It involve the role of an individual as well as
business entity that cannot control the
functioning of an external environment
irrespective of that it affect the long term
growth and profitability

Positive and negative impact of macro
environment upon business
■ Political factor
■ Economic factor
■ Social factor
■ Technological factor
■ Legal factor
■ Environmental factor

Internal and external analysis in order to identify strength and weakness
Strength
 Tesco has leading market share as it has global presence instead of
remaining dependent upon the home country it has expanded
successfully with the emerging economies. Thus, due to which it earns
enormous revenue (Swot analyses of Tesco corporation, 2019).
Opportunity
 Tesco company can form partnership or strategic alliance in order to
wipe out competitive pressure and attract the customer in order to
flourish the business process.
Weakness
 Tesco being price leader adopts low cost strategy which hampers its
profit margin. Although it has huge brand image but in spite of that
increase in price can drop the profitability of company.
Threat
 As Tesco has expanded its business in Asian market which is
developing market and often experience political instability that can
affect the existence or profitability of firm.

Strength and weakness of macro factors
Factors Strength Weakness
Political The political condition of the developed countries
are stable which lead the Tesco to plan and
implement the strategy effectively
Any sudden changes in the government regulation
explicitly affect the performance of firm due to
which they may experience lack of adequate
profitability.
Economical In order to expand and conduct portfolio
investment Tesco generate the demand by
gathering the attention of customer and fulfil their
requirement.
Any change in the economic cycle, taxation rate or
foreign direct investment create hindrance in the
performance of respective company (Laudon and
Traver, 2016).

Porters five forces
■ Threat of New Entrants- In Retail sector, it is complex to
attain economies of scale and entry barriers is low. It is
beneficial for the existing large companies like Tesco not
to deal with any kind of risk. It can be said that the sector
related business environment is in the favor of them.
■ Bargaining Power of Suppliers- In the retail industry, there
are large number of suppliers. They have less control on
prices and also make the suppliers bargaining power. The
suppliers provides standard raw material at reasonable cost
so that it can manufacture better quality of goods.

CONCLUSION
■ From the above report it has been determined that it is essential for the firm to study the
environment in which it function and take necessary precaution in order to influence the
functioning of business to sustain within compensative environment. Along with that
there are different types of the organizations that fall on different category such as
private, public and voluntary on the basis of their structure, scope and size that differ
from one to another.
■ Further, for the effective functioning of business internal and external factor need to be
effectively analyzed to enhance the productivity of firm.

REFERENCES
■ Sun, H. and Richardson, J. T., 2016. Students’ perceptions of the academic environment
and approaches to studying in British postgraduate business education. Assessment &
Evaluation in Higher Education. 41(3). pp.384-399.
■ Ward, D.M., 2015. System and method for integrating a business environment with a
process control environment. U.S. Patent 5,463,555