Regent College: HND Business Environment Analysis of Tesco Plc

This report provides a comprehensive analysis of the business environment, focusing on Tesco Plc. It begins with an introduction to business and its environment, explaining the significance of various internal and external factors. The report then analyzes the organizational functions of Tesco...Read More

BUSINESS
ENVIRONMENT

INTRODUCTION
A enterprise, company or an organisation who carry out activities in order to provide
products and services within its target market is known as business. They function for meeting
up their desired goals and objectives. The organisation can deliver there products and services on
the basis of monetary or non monetary consideration. Businesses which provides their products
and services for non monetary benefits are termed as not for profits organisation. Firms can be
owned privately or it may be owned by public or government and government authorities.
Management of an organisation depend upon its ownership if its privately owned the owner is
only individual who manages its activities. Apart from this government official are the one who
manages government owned organisation.
There are some interior and exterior factors which affects either in the favour or not in the
functioning for business activities, employees, structure, customers, demand and supply. The
sum of all factors which directly or indirectly impacts organisation operations is defined as
business environment. It includes all macro and micro factors. It is essential for enterprise to
identify negative impacts of all factors and they must be eliminated by taking necessary actions
in order to survive in competition. The following assignment should allow to know the various
aspects of business and the affects of minor and major factors on them.
TASK 1
P1 covered in ppt
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P2 covered in ppt
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P3 Relationship of different organisational functions and its link to objectives
Illustration 1: Departmentalisation : Meaning, Need and Types, 2017
(Source: Departmentalisation : Meaning, Need and Types)
Introduction: Tesco Plc is multinational British retail grocery store operating within the
economy of United Kingdom (Departmentalisation : Meaning, Need and Types, 2017). It
provides high quality of products and services to its customers where it functions. It an third
largest retail organisation in the world.
Main body: - The cited organisation focuses on delivering standard quality of products
and services which helps in improving the quality of their living to their customers which
indirectly focuses on achieving value of enterprise among its customers (Al-Debei and Avison,
2010). Apart from this Tesco Plc aims at increasing organisations profitability with increase in
its brand image. All the functions of cited business are determined under the mentioned diagram.
The features are mentioned briefly as below:
Board of directors: - The board of directors of cited organisation involves ten members
who perform in order to achieve pre-determined objectives of organisation(Becker, 2017).During
the year of 2015 a certain changes were made in the group of board members. A one person has
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elected as chair person and the others seven members were elected and given responsibility of
retired members.
The Board of Directors plays a crucial role in business who implements effective actions
and need to provide guidance and direction to the management director of organisation and later
on they communicate to their subordinates working at different level of functional departments
(Boons and et. al., 2013). The board members of business are have direct relation with goals and
objectives of organisation and they are directly linked with functions of business.
It is important for all members to make effective plans and policies and they are
responsible to take right decisions at right time. This will support in achievement of desired
objectives effectively and efficiently.
Human Resource: - It is significant function of cited organisation which consist of various
members in the form of HR director, manager, and recruiting or appointed officers. These
members perform effectively which helps the organisation in hiring of good individuals with
effective skills and capabilities. The human resource director prepares important guidelines and
procedures relating to the recruitment of applied candidates and directs the existing recruitment
officers of department for recruiting good candidates.
This activities of cited organisation are related and affected the pre-determined
organisational targets which needs to be achieved. Significant recruitment of effective candidates
by the Human resource department of organisation helps in achieving objectives efficiently
within a pre-determined period of time and this reduces the chances of time and money wastage.
It directly assist cited enterprise in increasing its level of productivity and performance. This is
only an significant element which enhances efficiency and effectiveness in operations
(Brinckmann, Grichnik and Kapsa, 2010).
Finance: - It involves arrangement and application of funds of Tesco Plc which are to be
utilized in the operation of business. The department of finance involves financial and
accounting managers. Financial manager perform a significant role in arrangement of funds i.e.
they determines sources for collection of funds and where they have to used. Apart from this,
accountant have significant duty to record all monetary transactions and financial data of cited
business organisation. The budgets are prepared by these department (Bryman and Bell, 2015).
The department support enterprise in determining future needs of funds for operational
and other activities and support in allocating the required work within pre-determined time
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period. This all supports in progress in operation of business which improves effectiveness as
well as efficiency level. This further assist to attain desired targets of organisation.
Administration: - It is a function which is related to the organisations clerical works
which includes maintaining record of consumers, keeping documents safely, dealing with
grievances of customers and other. The following administration sector or unit is directly
connected to the management, preservation and safety of enterprise (Cantwell, Dunning and
Lundan, 2010).
This all helps in solving issues of customers and supports in providing effective services
to customers without any mismanagement. All these supports Tesco Plc in attaining goals of
business by increasing involvement of consumers towards it.
Marketing and sales: - This function of firm is connected with the revenue and
promotion of organisation goods and services. It have complete responsibility to develop
effective marketing plans and policies for promotion of goods and commodities offered by it.
The policy framed by department must be followed by business to achieve its desired goals and
objectives.
It supports cited business in increasing sales for its products and services which is its
main objective. It also assist firm in developing its brand image and increases customers by
undertaking promotional activities(Carroll and Shabana, 2010).
Customer service: - This function is directly linked with the services rendered by firm
towards their consumers. The function of customer service helps in delivering details which are
needed by their users, providing advice as well as providing products and deliver services in
effective and efficient manner. which will support in achieving customers satisfaction.
Conclusion: This function supports organisation in achieving existing customers interest
towards organisation and supports in increasing new customers toward it. It assist business to
sole grievances and problems of customers which helps to develop value of firm among them.
This also increases goodwill and brand value.
TASK 2
P4 Positive and negative impacts of macro environment of business operations
At present, Some factors are there which either directly or indirectly affects the operation's of
organisation (Cavusgil and et. al., 2014). These factors can be internal or external. The external
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environment includes two factors i.e. macro and micro environment. These macro environment
includes certain elements which may have positive or negative impact over the business. These
elements may be beneficial for business or it may harm it. The macro environment includes the
elements that are political, economical, social, technological, environmental, legal which are
described as follows with their negative and positive impacts upon organisation: -
Political: - This component of macro environment may affect positively or negatively
over firm's functioning (Jahangirian and et. al., 2010). The government in United Kingdom have
introduced new policy regarding taxation which have negatively affected operation of Tesco Plc.
Reference company have to make appropriate relation with every ruling and opposition party so
that their business do not get affected.
The significant increase in tax rates according to new policy have supported government
in earning more revenues but on other hand it have declined consumers power in respect of
spending. This declines no. of consumers for goods and delivering services provided by cited
organisation which leads to reduction in sales revenue which an negative impact.
Economical: - The economic system of UK is significantly put efforts to recover from
the conditions of financial losses that affects Tesco Plc positively. It helps in supporting
organisation in increasing its growth rate in a field of retail industry. Apart from this, the
condition of recession within economy of UK has lead to more unemployment which declines
purchasing power of individuals. This results in negative impact over revenue of goods and
utilities provided in cited business (Kolk and Van Tulder, 2010).
Social: - The decline in the birth rate and increase in life expectancy rate affects the
number of senior citizens in a social club of United Kingdom. This factors significantly affects
choice, preferences and needs of individuals. More than people of old age and variation in taste
and preference directly impacts revenue of latest introduced product by Tesco Plc.
Technological: - This component of factors at large perform a crucial function in
affecting operations of Tesco Plc.This brings some optimistic and perverse affects all over the
operations of cited business and it have certain competitive merits and demerits The more uses
of mobiles, tablets, computers and cyber space have supported cited organisation in delivering
efficient services to its customers (Kotler, 2011).
Apart from this more use of advance technology by its competitors leads to declines in
growth of Tesco Plc. If business do not adopts new technological changes it will lose interest of
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customers toward it products and services which will negatively impact over profitability of
organisation.
Environmental: - It is related to the management of business waste, pollution control and
recycling of waste products (Kuckertz and Wagner, 2010). The strict rules and regulation
implied by government of United Kingdom on Tesco Plc in respect of environmental
conservation have force organisation to operate its business functions without affecting
environment due to its activities. Tesco have to adopt appropriate methods which do not lead to
affect the ecological system. For this, they can use less plastic as packing bags, use
environmental friendly vehicles for transportation and plant more and more trees.
Legal: - The various laws framed by government of United Kingdom have adversely impacted
operations of Tesco Plc. Cited firms has too operates in providing financial utilities to its
customers in the form of loans, credit cards and savings. Financial Service Act, 2012 enforced
by UK governance have impacted services in field finance. Its strictness compresses functioning
on cited organisation (Lankes, 2011).
P5 Internal and external analysis of Tesco Plc to identify strengths and weaknesses
It is necessary for an organisation to conduct internal analysis in order to determining the
affects that made either in positive or negative manner. The factors which made impact on the
performance of an organisation negatively is considered as its weaknesses. In order to find out
the merits and demerits of functioning of organisation that comes form the business plans and
policies and strategies, is is required for an organisation to use SWOT analysis techniques which
helps in attaining desired objectives. Tesco is considered as second largest organisation in retail
which operates their functions without damaging environment. To sustain for long term, an
organisation should need to formulate and implement specific strategies and perform accordingly
in order to achieve their desired targets in effective and efficient manner. SWOT analysis of
Tesco:
Strengths: Tesco Plc offers standard quality of goods and delivering services to their
clients which helps them to compete with their rivals. It is considered as retail grocery store
which offers value for money in terms of goods and services. Tesco succeed to among top 100
most valued brand and has better financial position as compared to their competitors.
Weaknesses: Tesco Plc operates many business such as clothing, foods, insurance, furniture and
some financial services and therefore it is difficult for them to manage all business in efficient
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manner. They have not good in the business of mobiles and tablets which affect their overall
performance. They also helps their customers to recover from bad-debts by providing financial
services which reduces their profitability index. Therefore all such demerits which decrease the
performance of business considered as weaknesses.
Opportunities: At present, there are many options and opportunities for organisation to
expand their business which generates more income. Therefore Tesco Plc should concentrate on
grabbing such opportunities in terms of attaining large market size in the competitive world.
They should expand their business towards moving to digital entertainment and real state sector
by raising funds from different sources which helps them to get good position among their
competitors.
Threats: Threats from the competitors in terms of effective skills, resources etc. such as
Asda and Sainsbury affects the performance and position of Tesco Plc. Walmart is such a
competitors who give tough competition to Tesco Plc in terms of skills and resources.So in order
to eliminate threats the organisation should need to formulate and implement strategies and plans
and procedures in effective and efficient manner.
The external analysis of cited organisation in order to determine strengths and weakness
is done by using PEST analysis. It is being described as follows: -
Political: - The significant increase in tax rate by government of United Kingdom have
declined the purchasing power of individuals which leads to decrease in sales and profitability.
This act as an weaknesses for Tesco Plc (Zott, Amit and Massa, 2011.
Environmental: - Laws framed by government of UK in respect of environment
protection have forced cited organisation to make use of green house gases in operations. This
have affected profitability which leads to weakness for firm.
Social: - The variations in taste and preferences of individuals where business operates
leads is directly linked to social factors. These impacts business positively and negatively. The
more number of elder people leads to demand of traditional products and services which is not
provided by Tesco Plc this act as an weakness for business (Sorescu and et. al., 2011). Apart
form this, youth of society demand new innovative products and prefer online shopping which is
effectively provided by organisation and this acts as an important strength for business.
Technological: - Effective use of mobiles and online shopping sites by cited organisation
in delivering its products and services within it target market and customers have acts as an
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important strength for Tesco Plc. This also supports in increasing new customers towards
organisation and helps in retaining interest of existing consumers (Trkman, 2010).
P6 Interrelation of strengths and weakness with external macro factors.
The organisational situation consist of some large exterior extrinsic factors that impacts
on functioning of business firm and it has direct connection with its growth and development.
Such elements impacting operation should need to act as strengths and weaknesses of Tesco Plc.
External environment includes Political, Economical, social, Technological, Environmental and
Legal factors of a economy under which business work. Such elements has directly interrelated
towards the strengths and weaknesses of enterprise (Wild, Wild and Han, 2014). Such factors
are described as under: -
Political factors: - It is connected with the politically condition of country and also rates
of taxes. The bad political condition where Tesco Plc functions leads to weakness for it where as
good condition act as an strength.
Economical factors: - The strength and weakness of Tesco Plc completely depends upon
economic condition of country where it operates. Harsh condition leads to weakness for business
and vice versa.
Social factors: - This factor is related to values, beliefs, preferences and tastes of people
where business operates. Operations of organisation as per values of society is positive strength
for firm apart from this, violating these factor acts as weakness.
Technological factors: - The up gradation of organisation as per the technological
changes in business world help in ease for operations and it is strength apart from this, use of
outdated technology leads to weakness.
Environmental factor: - This factor have direct relation with strength and weakness of
entity. If environment conditions where business operates is favourable according to its activities
then it will acts as an strengths and vise versa (Zott, Amit and Massa, 2011).
Legal factor: - The legal rule and regulations formulated by government of country for
organisation may act as an strengths or weakness. The effective policy of government is and
strength for business whereas harsh rule framed leads to weaknesses for it.
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CONCLUSION
With the help of the given report it can be concluded that there are three different types of
organisations on the basis of their ownership. Such firms establishes their own aims and
objectives. Many of them operates with the motive of earning profits from their offered goods
and their services whereas other activities of delivering services rather than earning profits out of
it. The report also concludes that there are different elements of macro environment which
impacts operation of organisation positively and negatively. It is also being concluded that it is
important for business to determine negative impact and necessary actions must be taken in
order to eliminate the following.
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REFERENCES
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