Business Environment Analysis Report: TESCO PLC - MOD003353

This report delves into the business environment of TESCO, a major player in the retail industry. It begins by examining TESCO's organizational structure, highlighting its hierarchical framework and the roles of key personnel like the CEO and board members. The report then underscores the importance of PESTEL analysis, emphasizing its role in identifying political, economic, social, technological, environmental, and legal factors that influence a business. The core of the report is a detailed PESTEL analysis of TESCO's external environment. It explores the impacts of Brexit and economic conditions, social trends, technological advancements, environmental concerns, and legal and ethical considerations on TESCO's operations and strategies. The analysis provides insights into the challenges and opportunities facing TESCO in the dynamic retail landscape.

Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Task 1 ..............................................................................................................................................3
Discussion about the organisational structure of TESCO. .........................................................3
Task 2 ..............................................................................................................................................5
Evaluate the importance of carrying out PESTEL analysis for an organisation.........................5
Task 3 ..............................................................................................................................................7
Use the PESTEL framework to analyse the external environment of your chosen company....7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
books and journals ....................................................................................................................10

INTRODUCTION
Their is continues development in retail industry because of changes in business
environment. It can be define as the surrounding business organisation which is directly related
to function of firm in an area where it want to sale or currently selling in its products. TESCO
will be the chosen organisation in this report where it is trading in retail industry. Food and
clothing products are major focused products of organisation. In front of this report there is
discussion about the overview of TESCO and its organisational structure. In middle of this
report, importance of PESTEL will be discussed where organisation has to identify various factor
which will help firm in managing it performance. Ending of this report is consist of PESTEL
analysis of retail industry where organisation is trading (Perera, 2017).
MAIN BODY
Task 1
Discussion about the organisational structure of TESCO.
Summary of TESCO
TESCO is a retail multinational organisation which was founded by Jack Cohen in 1919
as a group of market stalls. TESCO is trading in retail sector where it is selling its product to
various kind of customers as well as sellers. It is currently operating more the 7000 stores all
over the world where its major operations are in UK, Australia and Asia. The period of 1950-60
is golden period for TESCO where major changes related to product and marketing was done by
organisation. This help organisation in achieving success as well as increasing market share. This
is directly related to firms production and help firm in using diversification strategy (Rastogi and
Trivedi, 2016). TESCO is biggest retailer for current time where organization is serving its
product to various customer in market. Company is also going to lunch its product in electronic
market where it will provide quality products. TESCO is increasing its operation by the use of
diversification strategy from year 1990, company now operating in areas like books, clothing,
electronic, furniture, and many more which help company in survival and increasing its capacity
to perform in various sectors.
Organizational structure of TESCO
This is important for TESCO to use proper structure in organisation. As this will help it
in managing its operation and also facilitate smoothness in different functional of organisation to

allocate roles and responsibility to different individual in organisation so that they can perform
with fuller efficiency and will lead to success of organisation in business environment. In cuurent
time TESCO is using, hierarchical structure for performing at global level by managing different
function related to productivity and profitability in organisation. Hierarchical structure can be
define as that kind of structure which is used by organisation to identification of various roles
and responsibilities in organisation to different individual according to there ability and
performance (Islam and Mamun, 2017). This will aid organization in managing structure where
whole organisation can be build up in single structure with various roles and responsibility of
each individual according to their level of authority in firm. In context of TESCO , firm use this
structure in the way where a individual remain at top position in organization and guide other in
direction of its goals, Objectives and visions.
In context of TESCO, it can be seen form above mention chart that organization is follow
this structure where the board member are supreme authority in organisation. This also states that
after board, the authority goes in the hands of various committee in organisation which are as
audit, corporate responsibility, nominations, remuneration, disclosure committee. In present time
Dave Lewis serving as CEO of TESCO PLC. He joined it in September 2014 since than
organisation is TESCO is performing far better. At the time of his joining it was last time when
team of board member is rectify. In present, TESCO is working with 10 member board by
including CEO Dave Lewis. The major objective of organisation is achieve its goals and
objective by expanding the business organization and making it useful for firm to proper use of
resource by minimising the cost and increasing the customer benefits. Board in TESCO always
focus on performance of organisation and achievement of its objectives in current time.

The above mention chart shows the information about assignment of roles and duty to
different individual. This also states flow of work within TESCO. According to chart it can be
seen that regional manger came first where there is division of work with highest authority and
responsibility in organisation. This will help organisation in management of work at regional
level where work can be divide according to location of various stores. After regional manger,
the second most Authorised person in TESCO is store manager, store manager are most
responsible person in TESCO who has various kinds of roles in organisation and liable for
complete management of different organisation's stores (Gupta, 2019). After that, there is
division of authority in three part on the basis of type of product. TESCO is dealing in three kind
of products. There are food, non food and services. So division of structure Is also done on the
basis of food , non food and services. This all division sates that organisation has its main focus
on bring stability in organisation where it can serve quality product to customer by management
of productivity and specialization.
Task 2
Evaluate the importance of carrying out PESTEL analysis for an organisation
PESTEL analysis: It is that analysis which is use by business enterprise to identify
various factors which are related to functioning of organisation in current business environment.

It include study of political, economic, social, technical, economic and legal environment
factors. These factor has there direct or indirectly influence on working or organisation. They
also impact on future goals of organisation and will lead to success of operation in current and
future time by proper identification of these factor (Helmold, 2019). Study of these factor also
enable organisation to identify the current trends in business environment which can be use to
achieve organisation goals by making strong polices and procedures to deal with uncertainty in
environment surrounded by TESCO.
Importance of conducting PESTEL analysis by organisation
PESTEL analysis is the framework which it essential for organisation and managing this
will help firm in achieving various objectives which minimising the wastage of resource. This
make it valuable for organisation dealing in particularity retail industry. There various other
important of this framework which are disused below:
Help in identification of business changes: Business environment is changing
continuously and this also impacting the firm business. This is because the is continuous
development in business by bringing new technology and changing trends so it is important for
organisation to deal with these changes for achieving success in managing business
environment. This is important for organisation to use PESTEL analysis as this will help firm in
identification of various trends and will also help firm in achieving success.
Strategic planing: It is important part of every organization as it help firm in planing for
future event as well as objective of organisation. It is mandatory for organization, to plan in
strategic way so that firm can achieve its objectives by efficient use of resource and management
of successful operation. Here PESTEL can help TESCO by identification of various elements
related to functioning of organisation and achieving its objectives. This will also help
organisation identification of various impact of outside factor and use them for strategic
planning (Aithal, 2017).
Cost reduction: Cost reduction always help firm in achieving commutative edge in
market because of low cost product and higher quality services. PESTEL will help TESCO in
managing low coast because it will identify various trends in market which will help organisation
in identification of current technology and use of more productive ways tyo reduce the cost in
organisation. PESTEL is also important for firm because it help in effective utilization of
resource which also act as way of cost reduction.

Develop alertness: Alertness in business can be define as the ability of individual and
organisation to response the changes in environment and use the in factor of firm so that
productivity can be maintained and objectives of organisation can be achieved by ,minimum
wastage of resources. PESTEL analysis will help organization in developing alertness in
individuals as well as managers. This is because it help firm in identification of impact related to
different function on organisation in outside factor. This impact will be helpful to develop some
measures so that firm can deal with future challenges which will come across in near future.
Identification of opportunity: Their are several opportunity in business environment
which are useful for organisation and can be used for growth purpose. Present market is full of
business opportunity and use of PESTEL analysis will hel0p organisation like TESCO to grab
these opportunity in current market. Their are various methods and factor in PESTEL analysis
which are helpful for organization to use these opportunities and manage success in business
environment. For example PESTEL will help organisation in identification on new
communication means which can be use by firm to make its communication channel more
stronger and use efficient strategy (Kangwa and Mutambo PANDEY, 2017).
PESTEL analysis is important for every organisation as it help firm in identification and
evaluation on business environment consist of macro environment factors which will lead to
success full decision-making and easy success.
Task 3
Use the PESTEL framework to analyse the external environment of your chosen company
PESTEL framework for TESCO PLC
Political factors: It include those factors which are associated with political condition of
the area where organisation is performing its different operations. There are various operation
which has there direct impact of organisation performance and are related to political operations
and codification of organisation. In context of TESCO it also deal with various factors which are
related to function of organisation in business environment. TESCO has the major impact of
BREXIT on functioning of enterprises in current business environment. This has both positive
and negative impact on organisation. The positive impart of BREXIT on TESCO is that it
provided various opportunity to organisation for increasing its market cover by the use of new
polices formulated by government to boost the business of London base company. This also
impacting negatively on organisation because due to changes in political environment of

London organisations also change its polices which can cause negative impact on resource of
organisation. Due to changes in polices of government, organisation has to change its structure
because it is operating at global level. It require more resource for managing flexibility in
organisation (Lam, Lidl Hong Kong Ltd, 2018).
Economic factors:These factor are those which are related to performance of
organisation in the economic conditions of the area where organisation is trading and selling its
goods and services. There are various economic factors in external environmental which impact
organisation directly. These are growth rate, employment rate, interest rates, exchange rates and
may more. This all is directly related to different function in organisation and will lead to success
and failure of firm operations. In context of TESCO organisation is facing the impact of slow
economic growth. This impacting negatively on organisation performance because due to slow
demand organisation is not able to meet its sales targets and all this impacting on profit of
organisation. Their is one more factor which impacting on the performance of organization that
us high standard of living. This factor impacting positivity because it help organisation to charge
higher prices of its product by serving quality products to its customer.
Social factors: It include all those factor which has here direct impact on performance of
organisation due to changes in social trends, behaviour, Influence of culture and many more
social things. In context of TESCO it can be said that organisation is functioning its performing
its function in the sociality of UK. Social factor in UK are changing continuously this is because
there are number of new up-gradation and high income of individual provide them the power to
change trends. This changing trends are also impacting the business of organisation in current
times this has positive impact on performance of TESCO, because it is using a proper research
and developed t department which help firm in identification of new trends and behaviour of
individual customer so that firm can take strong decision and make corrective action for these
trends (Shieh, LIFE & LIVING INTERNATIONAL Ltd, 2017).
Technological factor: This factor is most important for organisation working in retail
industry. This is because it directly help firm in reaming in consumption from its various other
competitors and gain maximum advantage in business world. This include the changes and
bringing of new technology in functioning of organisation which will help firm in bringing
productivity and reducing the workload of employees. In current time TESCO is leading in
technological innovation in organisation because it prefer to regularly up-garde technology so

that management of different function can be done easily. This impact both positive-manner and
negative manner on TESCO. The positive impact of this is that help firm in something the work
flow but negative impact of this on firm is that it reduce profitability because changes in
technology will impact firm profits.
Environment factor: Environmental factors are those which are directly related to
environment surrounded near organisation. It incudes factors like climate, geographic location,
resource and many more. These all are related to liability of organization towards environment
protection. In current busies scenario TESCO is a leading organisation which also fulfil its
liability regrading environment. Their are various program which are stared by organisation and
directly related to protection of environment. These program are use of renewable energy instead
of non renewable energy and target of zero carbon emission. Both of these are impacting
positivity on organization as they helping TESCO in building sound image by fulfilling it
responsibility.
Legal factor: This is consist of those factors which are related to working of organization
in nation. In contest o0f TESCO it is performing at global level so it is important for organization
to deal with various kind of laws. TESCO is using a police where it try to follow each and every
law related to functioning of organisation in respective country where it is selling its products
and services this will also help organisation in achieving its goals and objective by saving
organisation from any legal liability. This all impacting organisation positively because it is
following rules formed by each and every nation government where organisation is trading.
It can be seen from above mentioned analysis about Tesco that there are various factors
which can impact on organisation and will leads to success within current environment but
manager of organisation has to keep this in mind to formulate effective strategy.
CONCLUSION
It can be evaluated from the above mention report that organization is working in
dynamic environment where there is regular changes in business operation which can lead to
change in polices and governance of organisation. In relation to TESCO this can be seen that
firm can use PESTEL analysis as it will help firm in getting information about new various
internals and external factors and will lead to increase profitably and productivity.

REFERENCES
books and journals
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET), 3(1), pp.384-388.
Islam, F.R. and Mamun, K.A., 2017. Possibilities and challenges of implementing renewable
energy in the light of PESTLE & SWOT analyses for island countries. In Smart Energy
Grid Design for Island Countries (pp. 1-19). Springer, Cham.
Gupta, 2019. British Airways-A SWOT and PESTLE Analysis-The impact of Europe 2020
policy. NOLEGEIN-Journal of Corporate & Business Laws, pp.1-11.
Helmold, M., 2019. Tools in PM. In Progress in Performance Management (pp. 111-122).
Springer, Cham.
Aithal, P.S., 2017. ABCD Analysis as Research Methodology in Company Case
Studies. International Journal of Management, Technology, and Social Sciences
(IJMTS), 2(2), pp.40-54.
Kangwa, S. and Mutambo, V., PESTLE and SWOT analysis of the potential for mining
Zambia’s low-grade copper ore deposits: the case of Kakosa South deposit.
PANDEY, B.C., 2017. Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing strategy.
BookRix.
Lam, W.H., Lidl Hong Kong Ltd, 2018. Pestle. U.S. Patent Application 29/589,977.
Shieh, J.C., LIFE & LIVING INTERNATIONAL Ltd, 2017. Mortar and pestle set. U.S. Patent
Application 29/571,745.