Impact of Business Environment Factors on Tesco's Performance Report

This report provides a comprehensive analysis of Tesco's business environment, focusing on the factors influencing its performance. It begins with an overview of Tesco's operations, highlighting its position as a leading British retailer. A literature review explores various aspects of organizational structure, including different types of organizations, interrelationships between departments, and the impact of internal and external environments on business operations. The review also covers the influence of globalization on organizational strategy and decision-making. The discussion and analysis section applies SWOT and PESTLE analyses to Tesco, identifying its strengths, weaknesses, opportunities, and threats, as well as political, economic, social, technological, legal, and environmental factors affecting its performance. The report concludes by summarizing the key findings and their implications for Tesco's future.

Business Report

Table of Contents
INTRODUCTION......................................................................................................................3
OVERVIEW OF TESCO...........................................................................................................3
LITERATURE REVIEW...........................................................................................................3
DISCUSSION AND ANALYSIS..............................................................................................5
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................9

INTRODUCTION
Business environment can be defined as a area of the business near different activities
related to business of an organisation is to be done (Hamilton and Webster, 2018). Business
environment consists of various factors directly impact on profitability and productivity of
the business internally and externally. In this current report the chosen organisation is Tesco.
The purpose of this report is to identify the business environment and its impact on
performance of organisation. In relation to the current report, the beginning of the report is
consisting of detailed overview of the organisation. The middle is consisting of a literature
review on different topics which are related to views of different authors on some issues
within the business environment. in the end of this report there is detailed analysis of impact
of business environment internally and externally where the two Framework SWOT analysis
and pestle analysis will be used.
OVERVIEW OF TESCO
Tesco is a leading British retail giant which is established by jack Cohen in 1919.
Tesco established as a group of small retailer and now it is the largest British retailer in whole
UK and third largest retailer in whole world. In current times, Tesco is operating more than
10000 stores where it employed approximately 1 lakh employees worldwide. The main
business of Tesco is in retail industry where it sale all kind of products related to food healthy
lifestyle telecommunication electronics and many more. Organisations continuously
developing its function and market cover every year.
LITERATURE REVIEW
The different types, size and scope of organisations
In viewpoint of (Prajogo, 2016), Organisation can be divided various types if
organisation is divided according to the prophet then it will with divided in profit table
organisation and non-profit organisation. According to the author profitable organisation are
those which seeks to earn profit from its operation which are generally selling and purchasing
of goods and services. in relation to the non-profit organisation these are and use which work
to deliver their services to the society where they expect nothing in return. Further, author
also divided organisation according to their scale and size. There are three type of division
according to the scale and size of the organisation which are micro and small organisation
medium size organisation and large organisation. as it can be seen from the name small and
medium organisation are those which have no higher operating cost and medium organisation
are those which are based on medium level of operation and doesn't work at higher level.
Large organisations are those which work at larger level as well as higher level of resources.
Further other also divided organisation in sole proprietor, partnership and limited company.
Sole proprietor are that kind of organisation where the owner of the firm is a single proprietor
and working at smaller level where the owner has personal liability to the organisation. in
context of partnership it is a joint venture between the two parties where they are working on
a particular project by mutual understanding and benefits so that they can do the business
operation effectively. limited company are those in corporations which have separate legal

identity within the eyes of law and has perfect structure to work as a high level organisation
which is performing at large scale.
The interrelationship of functions on organisational structure
According to findings made by(Gaganis, Pasiouras and Voulgari, 2019) it can be seen
that within the organisation there is closed interrelationship between the different
organisations department. This is because organisation has to perform different functions by
the integration of different departments like human resources department, information
technology department, finance department, marketing department and production
department. According to the author there is close relationship between each and every
department within the organisation because organisation can achieve its goals and objectives
by fulfilling the requirement of each and every department as well as maintaining a proper
coordination so that goals and objectives can be achieved. according to the author division of
work will flow in an appropriate manner so that a cooperative environment can be established
within the firm and a proper structure can be followed so that firm can gain maximum
advantage by the use of different factors and reduce the negative impact of improper
corporation and high level of conflicts because of low level communication. This can be seen
that it is important to maintain communication for achieving the business goals because there
are various situations in front of the organisation where the communication between each and
every department is mandatory to transfer some relevant information for achieving the goal
and objective.
The impact of internal and external environment on business operations
In viewpoint of(Cherunilam, 2016) there are various factors within the internal and
external environment of the business which directly impact on the performance of the
business as well as different business operations. Author also states that there are two kind of
factors internal and external environment which have direct impact on the business operations
this is because internal factors include the strengths weaknesses opportunities within the
organisation which will directly related to the performance of the manager as well as current
situation of the organisation within the business environment. This situation will impacted
because of weaknesses of the organisation which has to be combined by the firm by using
effective analysis. author also states that external environment also impact on the
organisation directly as it impact on the performance of the organisation because there are
various external factors like political factors social factor economic factor which have their
great impact on the performance of the fun because of continuous changes within these
external environmental factors. These factors are also necessary for the organisation to
achieve its business objective as well as reducing charges of error in future. For identification
of internal and external factor organisation can use SWOT analysis and pestle analysis which
is helpful to the firm in decreasing the negative impact by primarily identifying these factors
which can impact the organisations performance and decision making ability in near future.
The influence of globalisation on organisational strategy and decision making

According to (Eling and Schaper, 2017) globalisation has direct impact on the
organisation strategy and decision making ability because globalisation is a phenomenon
which is related to development of the various new technological means and interaction of
two different economies technology and services and can perform different business activities
for mutual benefits. author also states that globalisation directly influence the organisation
strategy and decision making policies because globalisation bring new development within
the policies and strategies of the organisation which has to be keep in checked by the
manager of the firm. This will directly influence on the functioning of the organisation where
it has to implement new and developed strategy according to the changes within the
globalised market. due to globalisation the competition also increased within the market
which has to be checked by the manager of the organisation where different decisions has to
be taken according to the changing trends and policies within the globalised market.
Globalisation also helpful to the organisation increasing its sales and this will directly impact
the decision-making ability and organisational strategy because due to globalisation
organisation can sell its product at global level but for adopting this form has to change its
organisational strategy as well as make effective decision to achieve better results.
DISCUSSION AND ANALYSIS
In relation to Tesco, organisation is operating as a private legal company which is
operating at larger level and registered as a private limited company which is also listed on
different stock exchange. It is important for the organisation to identify the business
environment where it is grading and achieve its business objectives in an appropriate manner.
in relation to Tesco there is close relationship between the different department of the
organisation and every department was in backbone for other department so that the proper
cooperative environment can be established within the firm for achieving its different
business goals and objectives. Organisation crystal structure where from divided different
departments in HR, finance, IT, research and development, production and marketing
department. These all department work together within the Tesco so that a proper operation
can be established and delay in work can be reduced by managing the resources in an
effective manner.
SWOT analysis: It is that analysis which is used by the organisation to identify the
internal factors which impact on the performance of the firm (Akhtar and Sushil, 2018). It
includes strength weaknesses opportunities and threats of the firm within the current market
which can impact its performance and will directly influence the decision making ability in
current business environment. In relation to Tesco, SWOT analysis of the organisation is
discussed below:
Strength:
 The major strength of Tesco is the customer base of the organisation, Tesco is
operating from long period of time within the UK where it maintains a proper
customer base where it cover more than 30% market within the retail industry of UK.

 Quality product is also strength to the organisation because best to provide quality
product to its customers who directly help it satisfy the needs and requirement of the
customer. This act as a major strength of the organisation.
Weakness:
 Tesco is operating from a long period within the UK and due to this there are various
other organisations which also started their business and have a better infrastructure as
well as new and innovative ideas within the functioning which can impact
environment of Tesco because of low availability of innovation and technology.
Opportunity:
 Current business environment is full of different opportunities which can be used by
the organisation to achieve the goals and objective in an appropriately. In reference to
Tesco, company has a great opportunity to do acquisition and merger so that it can
increase its market cover as well as improve the services by bringing technology of
other organisation (Lee, 2017)
Threat:
 There are various kinds of threats within the business environment which can impact
the performance of the test within the market. The major threat which is faced by the
organisation is competition from its competitors because in current time the
competitors of the Tesco are operating at higher Level where they are using proper
infrastructure and facilities to eliminate the competition from Tesco.
Pastel analysis: It is an analysis which is used by the organisation to identify its external
environment where organisation is trading. it include different factors within the external
environment which can impact the performance of the organisation and will also lead to
impact on the decision making ability and different operations to be performed within the
near future. In relation to the Tesco pestle analysis is discussed below:
 Political factors: Political factors are those which are impacting the organisations
performance directly. In relation to the organisation Tesco, there are various political
factors within the economy of the UK which can impact on the organisation positively
and negatively. The major political impact which impacted negatively on the
organisation is terrorism. This is because due to continuous increment in terrorism
organisation has to shut its global operation in various countries. This impact
negatively on the revenue of the organisation (Escalera and Chiang, 2017).
 Economic factor: Economic factors are those which include changes within the
economic condition exchange rates GDP growth and many other factors related to
economy. In relation to Tesco, it is operating at global level where it has to deal with
various economic factors. In relation to UK, current economic factors are in favour of
Tesco which will helpful to the organisation in increasing the profitability because
higher employment rate as well as higher level of GDP will directly improve the

standard of living within the individual and will promote quality purchasing which is
inbuilt of higher profit of organisation.
 Social factor: In relation to Tesco, there are various social factors and trends within
the society of UK which impact organisation in both positive and negative manner.
Continuous changes with the trend culture and preference of individual within the
society of UK will impact the test for negative manner because due to changes in
trends within the culture and other thing Tesco also changed its products and services
which implement a high cost on maintenance and reduce the profitability level of the
organisation in final accounts (Fabus, 2018).
 Technological factor: In relation to Tesco, technological factor are those which
include the continuous changes within the technology of working within the
organisation. Tesco is facing a positive impact for technological factor because
organisation follow continued development policy where it regularly update its tools
and software which are necessary to achieve the objectives within the test no logical
factors and using these factors in the benefit of the organisation.
 Environment factor: Environment factor are those factor which are related to the the
environment where the organisation is trading. it include different factors like climate
change geographical location as well as pollution which are related to the
performance of organisation. In relation to the environment factors impacting
positively on the organisation because does quiz using a proper strategy where it is
trying to minimise the use of non-renewable resources so that form can fulfil its
corporate social responsibilities as well as achieve the maximum satisfaction to the
individuals by fulfilling its obligation to work environment. Tesco is using
greenhouse systems which will help company in reducing the negative impact toward
the climate change and increasing the Goodwill of the firm in the market (Bejtkovský,
Rózsa and Mulyaningsih, 2018).
 Legal factors: Include all those rules regulations and policies which are formed by
the legal structure and authorities within the economy where the organisation is
trading. tattoo global level so it has to perform all the rules and regulations in an
effective manner which are formed by different legal authorities so that firm can
reduce its legal liabilities and can achieve its goals and objectives by fulfilling its
legal obligations in different economy
This can be seen that pestle analysis is important for the organisation to identify the
external environment and achieving the goals and objectives in an appropriate manner by
making solid decision-making system and improve its working within the environment
(Abdullahi and Zainol, 2016).
CONCLUSION
It can be concluded from the above mentioned report that there are various factor
which impact the business environment internally and externally and these can be e used for
the achieving the goals and objectives of the firm by making effective policies. It can also see
in that spot and pestle analysis are the important part for the firm which helped form in
identification of different factors and their impact on the organisations performance.

REFERENCES
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment
in delivering business performance. International journal of production
Economics, 171, pp.241-249.
Cherunilam, F., 2016. Business environment. Himalaya Publishing House.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling, 78, pp.275-
292.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal
of Operational Research, 258(3), pp.1082-1094.
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain
business environment. Business Process Management Journal.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE
STUDY SLOVAKIA. Journal of Security & Sustainability Issues, 7(4).
Bejtkovský, J., Rózsa, Z. and Mulyaningsih, H.D., 2018. A phenomenon of digitalization and
E-recruitment in business environment. Polish Journal of Management Studies, 18.
Abdullahi, A.I. and Zainol, F.A., 2016. The impact of socio-cultural business environment on
entrepreneurial intention: A conceptual approach. International Journal of Academic
Research in Business and Social Sciences, 6(2), pp.80-94.
Escaleras, M. and Chiang, E.P., 2017. Fiscal decentralization and institutional quality on the
business environment. Economics Letters, 159, pp.161-163.