Global Business Environment Portfolio Paper 2: Tesco Report

This report provides a comprehensive analysis of Tesco's global business environment, focusing on internal and external factors impacting its operations. The report begins with an introduction highlighting the importance of analyzing the global business environment for companies like Tesco. The main body of the report consists of a detailed SWOT analysis, outlining Tesco's strengths, weaknesses, opportunities, and threats. The analysis highlights Tesco's leadership in the retail sector, strong product portfolio, concentrated operations, acquisition mistakes, market opportunities, technological advancements, intense competition, and changing consumer preferences. The report then examines the impact of external environment drivers on Tesco's functional areas, specifically the operations and research & development departments. It discusses how political changes, labor costs, consumer preferences, and legal considerations influence these departments. The report concludes by emphasizing the importance of both internal and external environment analysis and highlights the key findings from the SWOT analysis and the impact of external drivers on Tesco's business. The report references relevant academic journals and online resources to support its findings.

GLOBAL BUISNESS
ENVIORNMENT
PORTFOLIO PAPER 2

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT analysis.......................................................................................................................3
Impact of driver on functional areas.......................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
In this competitive world it is very necessary for the companies to analyse the global
business environment as there are many changes taking place within the environment globally.
Thus, for this it is necessary for the company to analyse these factors (Hamilton and Webster,
2018). Thus, the present report will outline the internal environment of Tesco and the impact of
the drivers of external environment of the operations and research and development department
of the company. Tesco is a multinational chain of merchandising and groceries store founded by
Jack Cohen in the year 1919 headquartered in Welwyn Garden City in Hertfordshire.
MAIN BODY
SWOT analysis
Elements Descriptions
Strengths  The major strength of the company is that it is the leader in the
retail sector. This is a strength because of the reason that this will
increase the operations of the company and market share all over
the globe.
 Another strength is the strong product portfolio because the
company deals in a wide variety of product types and thus, this
attracts more of the consumers.
Weakness  The major weakness of company is that it has some concentrated
operations because 45 % of the revenue is contributed by Canada,
US and Mexico. Thus, if there will be any problem with these
three countries the profit of the company will be affected to a
great extent.
 Another weakness is some acquisition mistake which were made
by the company. For instance, the acquisition with Nobbies
Garden and Giraffe Eatery were not successful and Tesco had to
again sold them (SWOT analysis of TESCO, 2019).
Opportunities  The major opportunity for the company is to tap the market in
which the company is not currently operating. This can be done
with help of different options of strategic alliances like joint

venture, merger and acquisition, takeover and many other options.
 Another major opportunity for the company is investing in
technological advancement taking place. This is an opportunity
because of the reason that if the company upgrades to latest
technology then this will attract more of the consumers (Doh,
Luthans and Slocum, 2016).
Threats  The first and foremost threat is the high and intense competition.
This is a threat because of the fact that the with this high
competition the consumers are attracted towards the product and
services of other competitors.
 Another threat is the fast- changing consumer preferences and
taste. This is a threat because of the reason that if Tesco does not
adopt to these changes then the consumer will not like the product
and services of the company.
Impact of driver on functional areas
The two functional areas on which the impact of the drivers of external environment will
be studied are the operation department and the research and development department of Tesco.
The first driver is the changes in the political sector impacts both the operational and R&D
department because every country has different rules. Thus, for Tesco to operate in multiple
countries has to research for the political background of the country and the requirements to start
operations in that country.
Another driver is the labour cost which belongs to the economic factor of the external
environment. This impact the operation department of Tesco because of the reason that if the
labour cost will be high then the production cost will be high for the company. This is majorly
because of the reason that labour will be paid high wages and this will add on to the cost of
production. This will also impact the R&D department as they will have to research for the
alternate labour options where the labour rates are low.
One more driver is the taste and preferences of the consumers (Tallman, Luo and
Buckley, 2018). This is also a major driver which affects both the operations and the R&D
department. This is majorly because of the reason that there are continuous changes within the

taste and preferences of the consumers. It is the role of research and development department to
work in more effective manner so that they can identify the latest trends in the market. then
convey these changes to the operations department so that they can make changes in accordance
to those needs and preferences. Like in present, the more preference is given to the healthy food
in order to remove obesity. Thus, operation department of Tesco need to make the product in
accordance to healthy food preferences.
Another driver is the legal considerations which the company faces at time of managing
operations at international level. This is majorly because all the countries have their own specific
rules and regulations and this need to be followed by Tesco. Thus, here the research and
development department have to thoroughly research for all the requirements of the laws to
operate in that country. Thus, this need to be conveyed to the operations department as well so
that they will produce the goods in accordance to their procedures only.
One more driver is the use of process of operations which do not harm the environment.
This is necessary because if the company uses environment harming operational procedures then
the consumers will not like the products (Peng, 2018). Thus, for this R&D department will
thoroughly analyse all the production system and then the system which will be good will be
good for the environment.
CONCLUSION
From the above report it is concluded that the along with the analysis of external
environment it is very important to analyse the internal environment as well. Thus, the present
report outlined the internal business environment of the company with help of SWOT analysis.
This is used because this model will outline all the capabilities and weakness of the company.
Also, the impact of the drivers of external forces was discussed on the operations and the
research and development department of the company. These impacts were like legal
considerations, political factors, labour cost, taste and preferences of the consumers and many
other such related factors.

REFERENCES
Books and Journals
Doh, J.P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015:
Perspectives on the 50th anniversary issue of the Journal of World Business: Introduction
to the special issue.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Peng, S., 2018, November. The Status and Countermeasures of Rural E-commerce in Shandong
Province Based on SWOT Analysis. In 2018 International Conference on Economy,
Management and Entrepreneurship (ICOEME 2018). Atlantis Press.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.
Online
SWOT analysis of TESCO. 2019. [Online]. Available through: < https://digitalwale.com/swot-
analysis-of-tesco/>