Business Environment Report: Tesco's Internal and External Factors

This report provides a comprehensive analysis of Tesco's business environment, examining its internal and external factors, strengths, and weaknesses. It explores the interrelationship of various organizational functions, such as marketing, human resources, and finance, and how they contribute to the company's overall goals. The report delves into the positive and negative impacts of the macro environment, including technological, political, social, and environmental factors, on Tesco's operations. Furthermore, it utilizes SWOT analysis to assess Tesco's capabilities and market position, considering its brand image, technological advancements, and customer focus. The report highlights how Tesco adapts to changes in the business environment and its strategies to overcome challenges and capitalize on opportunities. The report concludes with a discussion of the dynamic nature of the business environment and its implications for Tesco's future success.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION......................................................................................................................4
TASK 1......................................................................................................................................4
P1& P2 Covered in PPT........................................................................................................4
TASK 2......................................................................................................................................4
P3 Relationship between various organisational functions...................................................4
TASK 3......................................................................................................................................6
P4 Negative and positive impacts of macro environment ....................................................6
P5 Internal and External environment of Tesco and its Strengths and weaknesses..............7
P6 Interrelation of strength and weakness with external factors ..........................................9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Business environment refers to collection of all activities and all factors which may be
control by a company and may not be. In this environment, there are mainly two types of
factors are included and these are macro and micro factors, these both can impact on the
productivity and profitability of business. Tesco Plc is a big retail business firm and this
industry deals in clothing, books, internet service provider, electronics, software, toys etc.
The size of this organisation is large and it is a private limited company. In this report
mentioned about the various types of business firm and also their objectives. The scope and
size of every company is different from each other (Auzair, 2011). Macro environment and
factors impacts on the business and these impacts can be negative and can be positive on
business activities and its operations. In this present report also mentioned about the
relationship among various organisational functions and in which way they all are connected
with each other. There are some weaknesses and strengths of this Tesco business
organisation. Strengths are the capabilities of business and it helps in doing business in an
effective and efficient manner. The strengths and weaknesses both are related with some
external factors of company.
TASK 1
P1& P2 Covered in PPT
TASK 2
P3 Relationship between various organisational functions
In an organisation there are many functions are working and the work of every
department is different from each other. In Tesco business firm there are some departments
such as marketing, sales, human resource, finance, production, research and development and
many other and the aims or objectives of every department is common. They all are work for
accomplishing the common goals or aims of an organisation which are made by top
management of Tesco (Brașoveanu and Bălu, 2014). All departments of this company are
work together and they all sharing data and information with each other for increasing the
productivity and profitability of business. Some departments of this business organisation are
given below:
Human resource department- It is a min part of an organisation and the main or
primary purpose of this department is to enhancing the company by growth and development
of company by improving the work performance of its employees. The main functions of
Human resource department are to performance appraisal, payroll, training and development,
recruitment and selection etc. It is the responsibility of a Human Resource manager is to
provide training to its existing employees as well as its new employees for increasing their
skills, knowledge and abilities. Training can be related to new machinery or it can be related

with new machinery. With the help of this productivity and growth of company will be
increased. Motivation is the best way to enhancing the performance level of employees.
Marketing department – This department plays an important for do the promotion
of its all products and services. It conducts many promotional activities to aware people about
services. It gives advertisement with the help of banners, newspapers, holders, television and
many social sites. With the help of these all company can create an image in the mind of its
customers. The main functions of this marketing department are to create positive image of
brand at marketplace and among customers, to control and monitor all marketing related
activities etc.
Research and Development department- This business firm conducts research
inside and outside in an organisation. In Tesco Company, there is a researcher and it basically
does or conduct research programme for know about marketing strategies, available products
at marketplace and about existing competitions. Before producing or manufacturing any
products, it conducts research related to customer tastes and preferences and also their
demand.
Production department- The main function of this department is to produce or
manufacture good quality products and service to its customers. For improving and
enhancing the quality standard of its production process or goods, Tesco business firm uses
new technology and machinery (Cantwell, Dunning and Lundan, 2010). This company
produce only those products which can satisfy the need and wants of consumers. It is the
responsibility of production manager is to use good quality raw material in its manufacturing
process.
Finance department- The main function of this department is to manage all funds or
money in an organisation. It is the duty of finance manager is to manage all the finance
otherwise it can affect on all business activities and operations. In Tesco business firm, before
manufacturing or producing any products, the managers of this company see funds and then
arrange all activities.
Sales Department- The work of sales team is to increase its sales of its products and
services. All employees of sales department are working together and its basic motive is to
maximise profit by enhancing its sales. The success and failure is totally depending upon the
sales manager (Carroll and Shabana, 2010). It is very important that sales manager should be
very clear about his/her roles and responsibilities. It is the main duty and responsibility of
manager is to make effective and workable strategies in an effective and efficient way.
Information technology (IT) department- The main purpose of this department is to
handling all data and operations. The main function of this department is to operate and also
support the infrastructure of an organisation. It is the responsibility of IT department is to safe
all data and information of Tesco company.

TASK 3
P4 Negative and positive impacts of macro environment
The business environment consist two types of factors and these are micro and macro
factors. In micro factors includes customers, employees, shareholders, suppliers etc. and in
macro factors consist political, economical, technological, economical, legal and
environmental. Tesco company can easily controllable all micro factors and there is no
control of company on all macro or external factors (Chow and et.al., 2011). The impact of
macro factors can be positive or can be positive on business operations and process. Mainly
the macro environment consist employment, fiscal and monetary policy, spending level of
people etc. The all factors of macro environment can also impact on productivity and
profitability of company. There are some of the negative ans some positive impact of all
macro factors given below:
Positive and negative impacts
Technological- In this present time, everyone is totally depending upon the
technology, without it people can do nothing. Tesco business firm uses new and advanced
technology for improving its business process. With the help of new technology, this business
firm can improve its production as well as its improving the quality of its production and
services. With the help of this, company can satisfy the needs and wants of its customers and
fro m this, the perception of this organisation on mind on customers will be positive.
On the other hand, this technology can be negative impact on business process. If
company will not use new technology and use obsolete technology then in this case there will
be the negative impact of this on business process and it will not improve the quality of its
products or services. From this, sales of business firm will be decreases and its impact will be
bad on goodwill of company and customers will not buy its goods in more quality.
Political and legal factors- The political parties change rapidly or can say in every
year and they all make their rules differently. This political factor can generate an opportunity
and benefit for company. Government makes some rules and regulations, policies under
which company has to run its business firm or its operations. It will help of this there will be
positive impact on business (Colfax, Rivera and Perez, 2010). In legal factor this, parliament
of United Kingdom makes some laws, acts and some policies, it is necessary for company is
to follow and adopt all acts and policies and acts can be related to discrimination, equal
employment opportunity act, employment rights act etc. The government of this country set
minimum wages for employees or can say workers.
If business firm do not conduct its activities and also will not follow all policies and
rules, then in this case there will be negative impact on business activities and the reputation
of company.
Social factors- Society plays an important role in business. To create good impact on
society, then it is necessary for company to conduct some activities for society or local
community. Tesco business firm contribute some part of its profit in the welfare of society. It

expands its business in new areas and with the help of this, there is employment creates for
local people and through this the living standard of local people will be improved. It is
important for company is to include local people in the decision making process related to
them and with the help of this, the goodwill of company will be good and better in the mind
of people. Mainly the social factors consists family, culture, friends, neighbours etc.
If company will not include local community in decision making process and not
coordinate with society then in this case there will be negative impact on society.
Environmental factors- It is the most important factor and the business is totally
depend up on the climate of whether (Commander and Svejnar, 2011). This factor can
directly impact on business operations. At the time of delivery of goods, of environment is
good then in this case goods can easily deliver. If in case, products are not delivered on time
then from this there will be negative affect on business operations.
P5 Internal and External environment of Tesco and its Strengths and weaknesses
With the help of SWOT analysis, Tesco business enterprise can know about its
internal as well as external strengths and weaknesses. Under internal environment consists
customers, suppliers, shareholders, employees etc. and these all factors company can easily
control. On the other hand, in external environment consists political, economical, social,
technological, legal and last environmental (PESTLE) and these all factors company cannot
control or managed. This external factor can also impact on business process or the decision
making process of company.
Strengths
It means the capabilities of business, Tesco is a big retail company and the business of
this company already expands in new market. This business always adopts new technology
for increasing the quality of its products and services. It always works for satisfying the needs
and wants of its consumers (De Jonge, 2011). The foremost priority of this company is its
customers. Tesco deals in many areas such as electronics, internet service provider, toys,
books, software etc. There are some main strengths of this company given below as above:
Figure 1 SWOT analysis

(Source: SWOT analysis, 2017)
 The main capability of this company is that it has a strong and powerful brand
name or image in United Kingdom and it has large number of products
variety.
 The management of this company use and think many innovative ideas to
expand increase its business and the sales of its goods and services.
 Before producing goods and services, this company conducts a research
programme to know about the marketing policies, current products available at
market place, its competitors and most important the tastes and preferences of
its customers (Fernando, 2011). According to this, company produce those
products which can satisfy the demands if consumers or people.
 The big strength of this company is that it uses latest technology in its
manufacturing process or for improving and increasing the quality of its
goods. With the help of advanced technology, this company can or can say
avail its products online or on its website. With the help of this, people can
buy its goods or services through online at reasonable price and without going
any store.
 The employees of workers of this firm are very innovative and talented. The
management of this company also coordinate with its employees and motivate
them, so that they can perform better and also work for achieving the
organisational goals and objectives of company.
Weakness
These are consider as the disability of business which leads to affect the
operations of business. Management have to work on all the issues which lead to
create problem in operating the work properly. Tesco have to identify the
weakness of their own and work in an appropriate manner so that they can
overcome from their weakness (Foerstl and et.al., 2010). Several number of
weakness of Tesco are as follow:
 One of a major weakness of a company is that they only have a establish
name in UK but not in others countries as they have lack of global
presence.
 As they have vast user base in which they are not capable in dealing out
with each and every individual interest. Hence, they have lack of
interaction problem with each and every individual.
 The new inventions are using by company on regular basis as this lead to
affect their finance very badly. Hence, this lead to create problem in
operating the business properly.

 As they have more and more employees which lead to create problems in
them which is not beneficial for a company. As they all have different
interest and desires which create problem in conducting the operations in
an appropriate manner.
Opportunity:
There are several number of chances are identified in a business which have to
grab by the company (Gecevska and et.al., 2010). Tesco have to identify all the
opportunities which are associated with business and work on them for generating
more and more profit. Several number of opportunities for a business are:
 They can generate more and more profit by serving better quality products
for their users.
 They can increase their customer base by opening new stores at all over
the globe.
Threats:
Company have to bear some number of risk also which are not appropriate for
them in their long term. Several number of threats for a business are as follow;
 Number of substitute of a product are getting increasing day by day.
 Number of rivalries are also increasing as per the days which also affect
the profit generation capacity of business.
P6 Interrelation of strength and weakness with external factors
 As with the expansion of many new technology it leads to help the
company in getting the more and more opportunities for the business
which is must. Along with that, company also have a good user base in
which they follow all the legal requirement of business. Moreover, Tesco
always use appropriate resources which are not going to harm the
environment (Hamilton and Webster, 2015). Hence, they can start CSR
business activities for increase user base as this work as an opportunity for
a company. This work as a strength for a company.
 Company have to measure their weakness which is associated with the
political factor in which they will not being so capable at the time when
they dealing with government. Hence, they have lack focused on political
factor.
 Moreover, Tesco have well trained employees in which they can met with
all the obligations of company. As they are going to work in an effective
manner. This leads to provide them strength. Hence, they are contribution
more and more in CSR which increase standard of society. People start
spent more and this lead to contribute in economy also.

It is a major relation of all the strength and weakness of a company with all the
external factors of a business environment (Iskanius, Page and Anbuudayasankar,
2010). Hence, business environment is dynamic in nature and get changed at any
time with no requirement. Managers of a company have to work on all the issues
and make the work successful in nature.
CONCLUSION
It is concluded from the above report that business environment consists two main
factors and those re micro and macro factors. These both can impact on business activities.
Impact can be positive and can be negative. In this report studied about the types of business
organisations like for an instance private, public and voluntary and the purposes and
objectives of all sectors are different. Their size and scope of these all organisations are also
different from each other. The factors of macro environment are not controllable by business
organisation. In this present report mentioned about the negative and positive effects of
macro factors on Tesco operations. In Tesco Company, there are many departments are
working and the functions of every department is different. In this report also studied about
the strengths and weaknesses of this business firm.

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