Business and Business Environment Report: Tesco's Strategic Analysis

This report provides a comprehensive analysis of Tesco's business environment, examining its organizational structure, the different types of organizations (public, private, and voluntary sectors), and their legal structures. The report delves into Tesco's vision, mission, size, scope, and legal structure as a private sector entity. It explores the relationship between various organizational functions, such as human resources and marketing, and their impact on organizational objectives. Furthermore, it identifies and explains the positive and negative impacts of the macro environment on Tesco's operations. The report also conducts internal and external analyses to identify Tesco's strengths and weaknesses, and it concludes by examining how these strengths and weaknesses interact with external macro factors. The report also provides an overview of the NHS and Oxfam as examples of public and voluntary sector organizations respectively.

Business and
Business
Environment

Contents
INTRODUCTION...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary sectors and
legal structures...................................................................................................................................3
P2 Explain the size and scope of a range of different types of organisations.....................................5
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure..............................................................................................7
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.........................................................................................................8
P5 Conduct internal and external analysis of specific organisations in order to identify strengths and
weaknesses......................................................................................................................................10
P6 Explain how strengths and weaknesses interrelate with external macro factors.........................12
CONCLUSION..................................................................................................................................13
REFERENCES..................................................................................................................................14

INTRODUCTION
Business environment is basically determine as a sum of all the internal and external
factor that has direct and indirect impact upon business decision making (Avramenko, 2012).
These kind of factors and forces affect a firm’s ability to create and maintain a successful
customer relationship. Both internal and external factors have different impact upon business
activities as impact of internal factors are controllable whereas external factors are beyond
the control. This report is based on Tesco which is British multinational general merchandise
and grocery supermarket founded in the year of 1919 by Jack Cohen. This organisation
provide quality products and services in at worldwide by operating in different subsidiaries as
Tesco stores, Tesco Bank, Tesco mobiles, Tesco family dining ltd. and so on. This report is
going to determine purpose, scope, size and legal structure of public, private and voluntary
sectors organisation. Further it will also determine interrelationship between different
organisational departments of an organisation as well as impact of internal and external
factors upon business operational activities. At last, it will define how macro factors can be
consider as strength and weakness for a firm.
MAIN BODY
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.
In an economy, different type of organisations operate that are classify separately on
the basis of their business nature, purpose and business objectives (Ballard and et. al., 2012.).
As per the given scenario of this assignment, organisations are classified in three different
sector as Public, Private and Voluntary for which organisations are selected as NHS, Tesco
and Oxfam. A detailed information of these organisations are determined below as:
Private sector organisation
Private sector organisations are known as an essential part of economy of a country.
These kind of organisations are run by individuals, companies and group of individuals. Main
objective of such organisations is to make money and gain sustainability to run their business
for a long term duration. For example, Tesco is a private sector organisation which provide
several services at worldwide. This organisation was founded by Jack Cohen in the year of
1919 with a store but now this organisation produce own products and services.
Different type of private sector organisation:

 Joint venture: Joint stock companies are those in which financial resources are
limited but it leads to heavy risk burden. In these kind of ventures capital can be
raised through the sale of different value shares.
 Sole Proprietorship: When a business is managed by an individual, it is called sole
proprietorship in which its owner shares all costs and benefits by itself (Belás and et.
al., 2015). It is the easiest and oldest way of doing business. In this business, there is
minimal restriction in terms of easy develop to dissolve.
 Partnership: When two or more individual works together with an aim to earn
desired profit and growth is called partnership. These kind of firms are formed by
signing partnership agreements that contains profit sharing, authorised member
details, capital progression and so on.
Goal: The goal of Tesco is to be the leader of market by serving quality products and services
to customers in easier way.
Purpose of Private sector organisation
One major area in which public and private companies are overlap is determine a
desire of profit maximisation. In these companies, profits are restricted to the company’s core
owner who can be just one person or a group of individual who invested in the company with
a motive to earn maximum profit. As one major purpose of Tesco is to become a market king
by serving quality products and services to their target customers.
Public sector organisation
Public sector organizations are known as entities formed to manage the policy and
procedure as well as operating requirements that allow a government to achieve its public
governance goals (Bharadwaj and et. al., 2013). For example NHS is a public sector
organisation which was founded at Wales, Scotland, Northern Ireland and England in the
year of 1948. The organisation basically provide healthcare services to the patient by
following rule and policy of government.
Different type of Public sector organisation
 Public or statutory corporation: Statutory Corporation is a corporate body which is
formed by special parliamentary act or central legislations. This kind of firm is
entirely funded by government. The legislative act decides objects, limitation and
power of these division.

 Departmental undertaking: The departmental activities of these organisations as
governmental department as there is no separate existence of hem than government
bodies. This operates under the overall supervision of one government ministry or
department.
Goal: Aspires the highest standard of professionalism and excellence in order to provide
quality clinical and healthcare facilities to the customers.
Purpose of Public sector organisation
The basic objective of public sector organizations is to provide essential services to
vulnerable and large sections of society (Charter, 2017). It fulfils all the essential roles by
hiring and running it as profitably. As the major purpose of NHS is to improve wellbeing and
health of patients by providing the excellence care through professional bodies. All the
activities are NHS are controlled by government.
Voluntary sector organisation
These kind of organisations are basically established with an aim to support and
enrich society without any motive to earn profit. In these organisations, there is no
interferences of government. AS Oxfam is a voluntary sector organisation which was
founded in the year of 1942 with an aim as alleviation of global poverty, advocacy, disaster
relief and pro-migration.
Different type of Voluntary sector organisation
 Trust: Trust is basically set up to manage land or to receive fund for a particular
purpose which contains society benefits.
 An Unincorporated Association: These kind of corporations are basically through
the agreement among the people who are coming together for a specific reason and
objectives.
Goal: To create lasting solution against poverty and injustice by empowering people to create
a shining future which secure and free from inappropriate conducts.
Purpose of Voluntary sector organisation
The purpose of Voluntary sector organisations is to identifying need of individuals
and communities after that initiating a project to meet their requirement by providing them

help and services (Cohen and Kietzmann, 2014). As the major purpose of Oxfam is to
develop solution against poverty or to develop justice for poor people.
P2 Explain the size and scope of a range of different types of organisations.
For all the organisation there are set aims and objectives that assist them to sustain in
the market for a long term duration. All the business activities of a firm is based on their size,
structure and scope. There are some details of Public, Private and Voluntary sector
organisations are determined below as:
Tesco
 Vision: Vision of Tesco is to Needs and wants of customers all around the world,
implement modern and innovative ideas as well as grabbing opportunity through a
range of loyal customers.
 Mission: Mission of Tesco is to make better things together that can be in the terms of
combining quality products and customers services at worldwide.
 Size: Tesco is a leading organisation in UK in which more than 450,000 employees
are working and providing their quality services in its different subsidiary (Craig and
Campbell, 2012). Organisation provides its quality services at worldwide by its
different ventures as Tesco bank, Tesco Ltd store, Tesco mobiles and so on.
 Scope: Tesco basically render their services in the market with fundamental element
strategy. The determination of this strategy is to extent market at which firm can
easily sell its products and services. Thus, the Tesco is pay their maximum attention
to expand their business in those areas in which customers are more likely to purchase
its services.
 Legal structure: Tesco is fall under the legal structure of Public limited company.
This organisation has large number of working entities in which they provide quality
services to their customers.
NHS
 Vision: Vision of NHS combines three major elements as quality of care, better health
services and quality values.
 Mission: Mission of NHS contains providing quality in health care services for
betterment of customer’s health.

 Size: In NHS, around 106,430 doctors, 285,893 nurses and health visitors are
employed with around 30,000 managerial bodies and so on (Groebner and et. al .,
2013).
 Scope: NHS is basically provides its services to more than 64.6 million patient in UK
as well as approx. 54.3 million in England. Now organisation looking to expand its
maximum services in which they already exist as Wales, Scotland, Northern Ireland
and England more effectively.
 Legal structure: NHS is a Public corporation which is formed with the special
funded support of parliament. The government provide them all the support services
in order to enhance opportunity of public services as medical treatment, test, and care
facility etc.
Oxfam
 Vision: Main vision of Oxfam is to make world Poverty free. Further, to work for
justice includes women and disable person.
 Mission: For Oxfam, major mission is to create appropriate solution against poverty
and injustice.
 Size: Oxfam is medium sized organisation which provides health facilities in UK in
order to resolving issues of poverty, relief from disaster, pro-migration, policy
research and so on. It works in 20 independent charitable organisation within the
country (Hair Jr and et. al., 2015).
 Scope: Now organisation is looking to expand its service at worldwide in order to end
injustice and poverty appropriately.
 Legal structure: Oxfam is Unincorporated association which was setup with an
agreement among several individuals and group for an objective to work against
injustice activities and poverty.
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In an organisation, several departments are working together for attaining
organisational targets goals and objectives appropriately. All these activities of operational
departments are based on business structure (Hillary, 2017). As Tesco follows hierarchical
organisational structure in which flow of communications varies in department to department.

Major reason behind this organisational structure is a large and multiple layer in which
different departments are working at several locations.
Figure 1Tesco Organizational Structure. 2019
Matrix structure: This is an effective organisational structure that allows multiple
departments to communicate easily. Under this organisational structure, employees have to
report to multiple managers as person who allot task to them as well as to their functional
manager. In this structure, the relationship between different departments are set up as a grid
or matrix.
Divisional structure: This is a type of structure in which management groups each
organisational function into different division. All these division contains necessary
knowledge, information and resources to support organisation’s operational and functional
activities. All the divisions under this structure, handles specific area that helps to attain
strategic objectives of firm.
Functional structure: This is a most common structure of organisation in which
management groups employees on the basis of their set of task and role. In these kind of
structure, employees require to report to their team head and team head have to report to CEO
of the firm about all the working activities of firm.
The interrelationship between different organisational departments are determine
below as:
Human resources and marketing: In an organisation, marketing and human
resources department play an essential role. Human resource play a crucial role in which

major responsibility of HR manager is staffing, recruitment, staff management, employee
retention and so on. On the other hand, marketing division play a responsible role in order to
promote organisational services in target market as well as to analyse customer requirement
towards organisational services. Both these departments’ work together in Tesco as HR
department works to analyse requirement of marketing employees after that they conduct
recruitment and selection process in which skilled employees are hired to attain
organisational requirements.
Marketing and finance: Marketing and finance departments in Tesco works to attain
organisational opportunities after proper market analysis. In this regard, finance department
provide them proper financial support by managing fund on the basis of marketing division
requirements. On the other hand, marketing division also works for finance division in order
to analysing opportunity of fund raising (Hilton and Platt, 2013). All these activities assist
Tesco to analyse areas of market growth in which firm can operate their new stores easily.
Major activities are marketing division is to conduct promotion, branding and planning in
which finance division provide them advisable help to conduct marketing activities
appropriately.
Finance and Human resource: Both these division of Tesco work as an internal
body. Tesco has a major dependency of its operational departments in order to manage all the
activities of different locations. In terms of finance department, Human resource provide its
contribution by hiring skilled and capable employees which have ability to manage and
record all the financial information of firm. On the other hand in respect of Human resource,
finance division provide them all the support services as funds in order to conducting all the
necessary activities for firm as employee retention, recruitment and new staff hiring and so
on. Both these departments working together in order to provide appropriate contribution in
business decision making. Thus, management of Tesco also pay their maximum attention in
the advices of all the working departments.
All the operational department of Tesco are not only working to enhance business
approaches but also to provide desired business advice which can be required for business
growth.

P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
For an organisation, it is required to analyse direct and indirect impact of external
factors upon their business decision making (Janita and Miranda, 2013). These factors can
impact positively and negatively therefore it is required for TESCO to conduct appropriate
strategy in order to manage their impact properly.
Figure 2: PESTEL ANALYSIS, 2018.
Impact of external factors on Tesco is determine below as:
Political factor: Tesco operating its business in more than 12 countries thus it is exposed
to many political factors that can affect organisational functional and operational activity in
direct and indirect manner. Major political factors include unemployment rate, economic
condition, tax rates, and fluctuation in governmental policy etc.
 Positive impact: Government of UK pay their maximum attention to develop direct
relationship with international countries. Thus, this process might aid Tesco to operate
their business worldwide.
 Negative impact: Local council of UK proposed tax on large supermarket which is
known as Tesco Tax but UK government refused this initiatives in order to avoid
price hike. These kind of governmental interference can create conflicts for Tesco.

Economic factor: These factor includes condition and situation of a state or a
country. It includes economic growth, interest rate, fiscal policy, disposable income etc
(Laudon and Traver, 2016).
 Positive impact: Tesco is largest supermarket of UK that has numerous stores in
several countries. They offers more than 745K jobs opportunity for workers in their
stores. On the basis of this, firm provide its own contribution in economy
development of UK. Thus, government of UK support business activities of Tesco.
 Negative impact: In UK, labour cost is known as most important factor in term of
supermarket business. In the year of 2018-19, minimum wages rate is increased by
4.4% in UK thus this shift has cost millions of pound for Tesco in UK.
Social factor: This factor includes behaviour and requirement of customers towards
specific product and services.
 Positive impact: Due to the changes in trend, consumer buying behaviour have
moved towards one-stop shopping as well as bulk shopping. In this regard Tesco
implements changes in their business practices and offered desired sale on more likely
products.
 Negative impact: Tesco needs to make changes in their products by shifting towards
organic services because in society, customer are more concern about their health.
Thus it can affect consumer buying behaviour in direct and indirect manner.
Technological factor: It factor include impact of advancement, innovation and new
technology upon business operations (Prins and Cybercrime, 2011).
 Positive impact: Tesco is getting opportunities by adopting retrial technologies in
their stores. They introduce RFID technology in order to increase in-store experience
for their customers. These kind of practices assist in gathering desired information for
business uses.
 Negative impact: Few years back, Tesco was facing some major issues like poor
customer experience and horsemeat scandal that can raises issue for organisation and
its online presence at worldwide.
Environmental factor: These factors determine issues which are raised due to steps
avoiding behaviour of firms towards environmental safety.

 Positive impact: Tesco emphasises on using paper bags rather than plastics. In
regard of environmental safety, firm adopt strategy of reuse, reduce and recycle their
products and packaging. In this regard government provide its own contribution to
Tesco to initiate such environmental safety initiatives.
 Negative impact: Implementation of the strategy for product recycling and reuses can
increase the overall cost of the firm.
Legal factor: This factors contains some specific regulations and rules which are
initiated by government of a country for those organisation who run their business in specific
industry (Savrul, Incekara and Sener, 2014).
 Positive impact: Tesco implements proper code of conduct as well as mention all the
policy clearly in front of their customers and employees. It creates transparency and
develop legal behaviour in organisation.
 Negative impact: Fluctuation in governmental policy and practices impact negatively
upon business decision making of Tesco as well as create barriers for business
operational and functional activities.
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.
Tesco is a well know British multinational grocery retailer which expended its
business rapidly and within few years it become the largest retailer and second largest
globally. This organisation create its capability on the basis of internal elements, functional
and operational activities. This organisation has been running its business operation in around
14 countries and has approx. 7000 retail stores across the world. The Swot analysis of the
organisation will assist in determining internal and external strength and weaknesses of the
firm. On the basis of these kind of practices, Tesco an implement business strategic
approaches in their organisational practices that can assist them in attaining target objectives
and goals.