Detailed Analysis of TESCO's Business Environment and Operations

This report provides a comprehensive analysis of TESCO's business environment, covering various organizational types, including public, private, and voluntary sectors, along with their respective legal structures. It explores the size and scope of these organizations, focusing on TESCO as a case study. The report delves into the relationship between different organizational functions and their interconnections across various departments, such as HR, Sales & Marketing, and Finance. Furthermore, it examines the positive and negative impacts of the macro environment on business operations, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The internal and external analysis of TESCO is undertaken to identify strengths and weaknesses, and how these relate to the external macro factors. The report concludes with a summary of the findings and recommendations for future business strategies.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1 Different types and purposes of organisations; public, private and voluntary sectors and
legal structures............................................................................................................................1
2 Size and scope of a range of different types of organisations.................................................3
TASK 2............................................................................................................................................4
3 Relationship between different organisational functions and their link with different
departments.................................................................................................................................4
TASK 3............................................................................................................................................5
4 Positive and negative impacts the macro environment has upon business operations...........5
TASK 4............................................................................................................................................8
5 Internal and external analysis of specific organisations in order to identify strengths and
weaknesses..................................................................................................................................8
6 Strengths and weaknesses interrelate with external macro factors.........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is defined as a combination of different factors that have an impact
on business in terms of performance, profitability and growth (Vasilcovschi and Georgescu,
2012). These factors can be both external and internal. TESCO, is one of the leading companies
in United Kingdom which is dealing in retail sector. Firm has around 6,553 in different
locations. Present assignment will focus on different types of organisation along with its sizes
and scope. In addition to this, report will discusses about company's key stakeholders. Every
organisation has various departments thus, interrelationship between these departments has been
discussed in this assignment. Other than this, with the help of suitable examples positive and
negative impact of macro environment has been outlined in this. Lastly, internal strengths and
weaknesses of specific business in being explained.
TASK 1
1 Different types and purposes of organisations; public, private and voluntary sectors and legal
structures
Each company which is establishing itself in market environment work with a motive of
getting maximum benefits and providing better services to its customers. In order to execute
operations,company is required to consider some of the factors like finance, planning,
implementing strategies etc., It is require by every organisation to provide healthy workplace to
its employees so that they can work in a productive manner and accomplish goals and objectives
in a speculated time frame (Toedt, 2014). Moreover, types and purpose of organisation can be
classified into three segments and all these are explained below for better understanding.
Public Sector: This is a part of the economy of nation and consist of both public services
and public enterprises. In simple terms, companies that comes under this are basically controlled
by public funded agencies. Firms that are not included in this segments comes under private and
voluntary organisation. Crown Prosecution Service is a public prosecution agency in England
which conduct criminal prosecution. Main work of this agency is to decide whether the case
should be prosecuted.
Purpose of Crown Prosecution Service: This organisation work with the purpose of
giving legal advices to investigating agencies and police while doing any kind of investigation.
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This help them in knowing whether the criminal is verdict or not and if it is than what kind of
criminal charges can be applied (Hussin and et. al., 2017).
Legal structures of Public Sector:
Local Government: It is the administration sector which shares low power in a state.
Local government keep an eye on the activities which are running at local level and further they
give details to top authorities.
State Government: It is linked with national government and work according to the
order given. State government have a right of making effective decision which are beneficial for
the state and people who are living in it.
Central Government: It shares high power and determine as a supreme governing
association. The main purpose of central government is to make policies, rules and regulations
which is further provided to state and local government to be follow so that activities can be
performed in an effective and timely manner.
Private Sector: Companies involved in private sector are regulated and controlled by an
individual moreover, it can be said that government doesn't have any kind of control (Sood and
Sukthankar, International Business Machines Corp, 2013). Private sector can also be called as
citizen sector because of the less involvement of governing bodies. TESCO is one of the largest
organisation in terms of revenues. It is a private sector firm that provides its products
worldwide.
Purpose: TESCO is working with the purpose of providing best quality services and
products so that they can sustain in market for longer team. In addition to this, they are working
with the motive of becoming one of the leading companies across globe.
Legal Structure of Private Sector:
Sole Proprietorship: They are also known as sole trader and it is considered as one of
the simplest form for operating business because it doesn't require any kind of legal entity. A
sole proprietorship can run its business under the name of owner or any fictitious name.
Partnership: It is a kind of agreement which is done between two or more persons or
parties with mutual understanding. In this, partners can have equal shares on resources or there
can be a possibility that one person have maximum share of liabilities (Charfeddine, BAnıl and
Ficici, 2017).
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Voluntary Sector: There are companies who establish their business for gaining maximum
benefits but there are some organisation who work for the well being of society and people who
are living. These organisation comes under voluntary sector, Oxfam is one of the firm that
includes 20 independent charitable organisation and they work for eliminate poverty from the
world.
Purpose of Oxfam: This organisation is operating in most of the countries and there they
are working with the purpose of eradicating poverty from the society. For doing this, they are
providing services and facilities after analysing issues and problems which are present
(Warkentin, Sugumaran and Sainsbury, 2012).
Stakeholders: Each company needs stakeholders and firm perform their activities in
order to influence these stakeholders so that they can invest funds which can further aid company
in executing their plans in an effective manner. Internal stakeholders which may include
employees, volunteers etc., and external stakeholders that consist of suppliers, partners and many
more. Thus, they both are categorised under stakeholders.
2 Size and scope of a range of different types of organisations
Public Sector: Companies that work under this are mostly regulated by government and
they tend to provided a large range of services and facilities like infrastructure, public transport,
public education health and care etc., Crown Prosecution Service is an organisation that is
helping governments and magistrate courts in giving appropriate suggestions like what kind of
criminal charges should be given to a person who is found guilty.
Size: Currently this organisation is operating its agency in London, and in this more than
6,900 staff members are working besides this 2,900 are solicitors and barristers (Burayidi,
2013).
Scope: Crown Prosecution Service is working in London and assisting police and
investigating agencies for resolving an issue or problem related to what kind of charges victim is
to be given. Moreover, CPS can think of operating its agencies in other parts of the world so that
better decision can be taken and criminal activities can be minimised.
Private Sector: Companies that comes under this sector plays a crucial role in the
economy of the nation and this includes industries, commercial firms etc., Government doesn't
have control over firms.
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Size: TESCO, is a trading company in United Kingdom and since 1919 they are
providing goods and services which are superior in quality (Hahn, Reimsbach and Schiemann,
2015). Firm has around 6,553 shops in number of locations and revenue generated is
approximately £55.9 billion. Other than this, company have its subsidiaries like TESCO bank,
TESCO mobile etc.,
Scope: Company has its business worldwide as they are dealing in retail sector but they
can also try in manufacturing goods and products by themselves. Therefore, it will enable
company in selling their own products. As a result, this will increase sales and profitability in a
given period of time.
Voluntary Sector: These are the organisation who tend to do work in order to give better
services and facilities so that lives of people can be upgraded. For example: Oxfam is working
for the eliminating poverty from the society and for this they are developing strategies and
functions.
Size: In relation with Oxfam, they are operating and working for the well-being in around
14 countries and these countries organisation is first identifying the issues and eradicating the
same. In different nation, a large number of volunteers are participating and playing their crucial
role in executing plans in an effective manner (Charalampous, 2012).
Scope: In terms of scope Oxfam can think of working in different field other than
focussing on eradicating poverty.
TASK 2
3 Relationship between different organisational functions and their link with different
departments
In a company there are various kind of departments who perform their activities in order
to give benefits to an organisation. For instance: sales and marketing department is working for
improving profitability of the company and for this, they are incorporating their different tools
and technologies. Therefore, in TESCO, company is maintaining better relationship with other
departments which is enabling firm in executing their plan in a better way. Thus, in order to
understand the roles and their link with different departments it has been stated below:
Human Resource Department: In an organisation they are considered as an important
department because their role is to hire eligible candidates who are best fit for the job. Thus,
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Human Resource Department can be be linked with each and every division of the sector as
according to the requirement they select candidates (Esparza-Aguilar and De la Garza-Ramos,
2017). For instance: Sales and marketing department requires a salesperson so, HR department
by considering this will hire candidates who are best for the post.
Production/Operation Department: This department can be linked with the division of
research and development because the information that are provided by them are used for
providing services and facilities to its customers. For this, R&D conducts surveys and take
feedbacks so that they can get to know about the choices and preferences of customers. For
example: With the help of this, TESCO is providing providing goods and products which can be
used for daily purpose.
Sales and marketing: Company cannot enhance its sales if they are not promoting or
marketing its services in a better manner. As a result, customers will not be able to know about
the services a firms in giving thus, it will ultimately decrease sales. Therefore, for the purpose of
sales and marketing company is using social media platform and it is enabling them in
connecting with valuable customers. Other than this, it is assisting firm in delivering goods and
services as per the choices and preferences (Cui and et. al., 2013).
Finance Department: This is the department which can be linked with every other
division of the company because every department needs funds for executing their plan and
obtaining profitability. Therefore, in terms of TESCO, finance department of this company go
through all the activities so that nobody is entertained and funds are divided equally.
Research and Development: This is one of the crucial department in an organisation as
they provides with data and information which are required for delivering better services and
facilities. For example: targeted customers wants that company give online services so that time
consumption can be reduced. Thus, main work of research and development is to identify this
and deliver it to the firm so that work can be done accordingly.
TASK 3
4 Positive and negative impacts the macro environment has upon business operations
TESCO, is a multinational retail company generally known for delivering food and non-
food related products. While running a business there are certain factors like internal and
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external factors which can have positive and negative impact on business environment.
Henceforth, PESTLE analysis has been discussed below:
Political Factor: Since TESCO, is dealing in retail sector and they are operating
worldwide at global level. This segment mainly includes tax rates, laws and legislation, rules and
regulations etc., according to the current situation of instability of finance, regulatory bodies of
nation are motivating these sectors in creating more job opportunities for people who are living
in local areas (Tchoffa and et. al., 2016). As a result, TESCO is playing a crucial role in the
same and they are providing employment thus, it is increasing workforce and as a result,
company is gaining benefits ion return.
Positive Factor: In United Kingdom there is stable government which is acting as a
positive factor for TESCO, because there is no need of changing policies and strategies on a
regular basis for operating business in an effective manner.
Negative Factor: Sudden implementation of taxes, rules and regulations can act as a
negative factor because this can force company in changing their strategies and action plan.
Thus, it is crucial that company make schemes for coping up with issues and problem.
Economical factor: This is the factor that influence the behaviour of customers and in
relation with TESCO, economic factor is the main things which is to be consider as their
demand, supply, profit and leverage cost etc., Other than this, there are some elements that are to
be considered like changes in policies, taxation process and many more. Although TESCO is
operating its business worldwide but their main revenue is depend upon market of United
Kingdom as they have a market share of around 30 percent.
Positive Factor: If country's economy will be stable than they will likely to spend more
amount of money which will ultimately increase the sales and profitability (Voznenko and
Roman, 2015).
Negative Factor: If there is a sudden change in economic policies or in the time of
recession company can face losses because they will prefer to spend less amount of money on
premium or luxurious products.
Social Factor: According to the survey it has been analysed that people in United
Kingdom has moved towards bulk shopping and one-stop shopping. In addition to this,
customers are now purchasing goods according to the latest trends. Thus, it is required that
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TESCO, deliver goods and services according to the needs and wants of customers by making
changes on a regular basis.
Positive Factor: If customers are getting products as per the choices than it will
ultimately generate more and more revenues for the company (Pandowo and Tikker, 2016) .
Negative Factor: Making modifications in the strategies and policies and providing
products accordingly can put a negative impact because it fulfilling all the needs and demands
might not be possible for them.
Technological Factor: With the change in course of time new and latest technologies
have evolved and these are assisting firm in giving better services. For instance: in relation to
TESCO, technology have provided opportunities in two distinct way first it has helped company
in developing online shopping application with the use of which firm can provide better
facilities. Secondly, the concept of self-service checkout points which has minimised the labour
cost for the company.
Positive Factor: Use of latest tools can reduce the time and cost of company and in
return it will give them benefits.
Negative Factor: Employees can might face difficulty in understanding some
complicated technologies . Other than this, use of latest tools can reduce the capacity of
employees for a certain period of time (Samantaray and Sriramadhesikan, International Business
Machines Corp, 2015).
Environmental Factor: According to the current environmental issues government have
now focussed on this factor. As they are spreading awareness, In relation with TESCO, they are
focussing on carbon foot-printing and by 2020 they will reduce its carbon foot-printing by 50
percent.
Positive Factor: the move of TESCO company of implementing carbon foot-printing
will reduce pollution to some context and this can work as the first move towards saving
environment.
Negative Factor: In relation with TESCO, if rain or any other climatic issue arises than
logistic department can face difficulty in delivering goods and products to respective customer.
Legal Factor: Under this generally rules and regulations are considered which are
formulated by regulatory bodies. Thus, these are to be considered by companies for giving better
services.
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Positive Factor: Legal factor bind companies in following same rules and regulation
who are dealing in same sector because of this, no single firm is benefited (Kuhle, 2015).
Negative Factor: As TESCO, is operating its business worldwide so for them following
rules and regulations of so many nation is not possible. As a result, it will act as a negative factor
for the company.
TASK 4
5 Internal and external analysis of specific organisations in order to identify strengths and
weaknesses
Every company who are running their business at national and international level have
some positive and negative sides which can have an impact on business operations. Therefore, in
relation with TESCO, its SWOT analysis is mentioned below for better understanding:
Strengths Weakness
 TESCO is dealing in retail sector and is
providing services all over the world
so, their product portfolio is strong.
 In order to fulfil the demands and wants
of customers TESCO, make
modifications in its model which assist
them in fulfilling all the requirements.
As a result, company gains competitive
advancement.
 Company is using enhanced
technologies which is enabling them in
creating greater cost efficiencies and
improved consumer service experience.
 Increase in competition has gave rise to
price war because of which TESCO's
profit margin decreased and other
companies gained competitive
advancement.
 Due to less disposable income people
are not purchasing goods and items and
because of this, it is leaving high cost
of inventory (Jonoski, Jakimoski and
Petreski, 2015).
 Instead of non-financially feasible
company is trying to serve in too many
markets as a result sales are decreasing.
Opportunities Threats
 TESCO must grab the opportunity of
strategic alliances with other brands as
it will assist firm in offering more
 Economic recession or sudden changes
in policies can act as a threat as this can
hamper working of the company.
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suitable and reliable products.
 In the countries where company is not
having valuable income there they can
grab opportunity of working in joint
ventures this will ultimately improve
performance.
 Other than this, rise in competition is
the biggest threat for companies.
6 Strengths and weaknesses interrelate with external macro factors
External macro factors are the factors that cannot be controlled by firm but it puts both
positive and negative impact on the business of a nation. It can act as a strength or in some cases
it can be considered as weaknesses (Vasilcovschi and Georgescu, 2012). Therefore, factors are
mentioned below along with strengths and weaknesses.
Political Factor:
Strengths: In United Kingdom, government is stable which for most of the companies
works as a strengths because they doesn't have to make changes in the policies and strategies. As
a result, company can now deliver good quality products to its customers.
Weaknesses: Although, government of UK is table in nature but sudden implementation
of taxes and other activities can lead company in making changes in policies which can
moreover, effect their activities, sales and productivity.
Economic Factor:
Strengths: With the rise in economy, it will increase the purchasing power of customers.
Along with this, it can provide job opportunities to most of the people who are living in that
place (Toedt, 2014).
Weaknesses: Customer's purchasing is greatly influenced by the economic condition as
if people doesn't have sufficient amount of money than they will not be able to purchase goods
and products.
Social Factor:
Strengths: Delivering excellent commodities as per the needs and wants of customer will
help company in improving its customer base and this will ultimately increase sales and
profitability.
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Weaknesses: There can be a possibility that customer choices and preferences changes
on a continuous basis and this can lead company to loss because of manufacturing product in
bulk (Hussin and et. al., 2017).
Technological Factor:
Strengths: In today's scenario, technology has provided with maximum benefits thus, ion
terms of strength it has enabled company in delivering goods that are of best quality.
Weaknesses: implementing new technologies cannot provided benefits all the time
because there might be a possibility that employees can take time in understanding the same.
CONCLUSION
From the above report it has been concluded that business environment in a company
includes both internal as well as external factors. Some of the factors are in control of the firm
but some are not. This assignment provides with the information related to different sectors
under which company operate its business. If organisation are different than its size can vary and
thus, with the help of this things can be understood in a better manner. Other than this, PESTLE
and SWOT analysis has provided the factors that are to be considered so that business can run in
a smooth way.
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