401/113MANSC-EL - Business Environment: Tesco Case Study Report

This report provides a comprehensive analysis of Tesco's business environment, examining the micro and macro elements that influence the organization's operations. The report begins with an introduction to the business environment and then delves into the specific case of Tesco, a multinational retail company. It explores the nature of the business atmosphere, illustrating the impact of environmental forces through SWOT and PESTEL analyses. The report assesses the significance of these forces at the organizational, market, and industry levels, utilizing Porter's Five Forces model to evaluate the competitive landscape. Furthermore, it examines the needs of various stakeholders and measures the appropriateness of Tesco's responses to policy actions taken by key stakeholders. The conclusion summarizes the key findings, emphasizing the importance of understanding the business environment for organizational success. The report also includes references to support the analysis.

The Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explain understanding nature of atmosphere that company operate in................................3
Illustrate effect of environmental forces on business organisations at a micro as well as macro
level........................................................................................................................................3
Assess the importance of effect of environmental forces at business organisation, market, and
sector or industry level...........................................................................................................3
Explain understanding need of a variety of stakeholders to selected organisation................3
Measure appropriateness of responses of organisations to policy actions taken by key
stakeholders............................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCE...................................................................................................................................5

INTRODUCTION
Business environment involves micro and macro elements that impose direct impact on
functions of organisation. It is important for organisation to assess overall elements in an
appropriate manner. In this report, the TESCO is taken as a chosen company. It is multinational
company provide superior kind of goods and services to its user in the market. In this
assignment, there is a discussion regarding stakeholder analysis that will alter and influence
company. It also provides an explanation regarding environment that impose direct effect on
organisation and also the appropriateness of responses in which policy is undertaken by main
stakeholders (Al Baghlani, 2018).
MAIN BODY
Explain understanding nature of atmosphere that company operate in.
The TESCO is multinational company provide superior kind of goods and services to its
user in the market. It is British international retailing company and its headquarters in England.
In context of profit, it is the third biggest and in context of revenue, it is ninth biggest retailing
supermarket in world and the company was founded in year of 1991 and presently they operate
in 12 countries with around 6553 store. Tesco PLC is not only offering retail goods but also the
focus is on dealing with mobile network, broadband as well as insurance services and many
more.
Illustrate effect of environmental forces on business organisations at a micro as well as macro
level.
The impact of environmental forces on business organisation at both micro and macro
level is given (Dammer, 2017). For analysis these impact, the SWOT and PESTEL is used that is
going to be mentioned below:
SWOT Analysis
SWOT analysis helps in assessing factor while improving market as well as operating
strategy. They focus on assessing strength, weakness, threat, opportunity that is useful for
appropriateness of company. SWOT analysis is going to be given below:
STRENGTHS WEAKNESSES
Due to have leading share in market around
28.1 % is determined as strength of
Tesco charged for fraud in year of 2017 in
context of misrepresenting process that is

organisation. determined as a main weakness of
organisation.
OPPORTUNITIES THREATS
Tesco focuses on launch of Jack lower price
rivalries of ALDI that is determined as
opportunities for organisation.
Due to having different number of competitors
such as ALDI, LIDI that decreases profit
margin of organisation.
PESTEL Analysis
The PESTEL analysis assesses unpredictable atmosphere in which Tesco operate their
business by providing discussion regarding factor that impose positive effect on performance of
Tesco. Therefore PESTEL is adopted by company is given below:
Political factor the organisation operated business in 12 country involving Asia as well as
Europe. There are various elements involves tax rate, political instability unemployment rate and
many more. For instance, import duty on product can impose direct effect on Tesco because it
imports some kind of inventory from outside UK such as China as well as in East Asia.
Therefore, it imposes positive negative effect on company. In addition to this, due to having
political instability within UK it impose positive effect on functions or activities of business
organisation.
Economic factor labour cost is significant factor that imposes direct effect on UK
supermarket. For example in 2018, the minimum rate of wage is enhanced by 4.4 % it increases
cost of company that imposes negative effect on organisation. The organisation also emphasizes
on enhancing borrowing price at UK that enhances cost and decreases profit of company. In
addition to this, diversification as well as presence in international market is determined as a two
significant strategy in past years that is determined as a success of organisation. It is also assess
that Tesco is based on market of UK with 27.7 % share in grocery market of UK (Friberg, 2018).
Social factor the trend related to consumer shopping is regularly changing time to time.
People positively schedule as well as need similar day and quick delivery along with flexible
product return policy. Relying on customer of UK must assess need of its user to meet during the

period of time. Hence, the demand for product and services is connected to belief of user which
is determined as other issue that impose negative effect on company. In addition to this, obesity
is other issues in society and consumer increase their concern regarding their health is
determined as changing behaviour of user to want organic foods that decreases sales of company.
The Shoppers of UK are determined as a loyal and Tesco grab opportunity by improving close
ties as well as maintaining one to one interaction with its user.
Technological factor in past times, Tesco faces different kind of issues such as a poor
experience related to user as well as forcemeat scandal and many more. The technological
advancement brings innovative opportunity for Tesco to regain trust of its customer. Tesco
focuses on implementing advanced technology by grabbing opportunity to provide or maintain
superior base of customer. But due to increases implementation of advanced technology, it
increases cost of company that decreases profit margin of company.
Environmental factor many organisations facing pressure from government side to
consider environmental issue. Therefore, it is necessary for organisation to respond to issue that
provide benefits to society. Now Tesco focuses on encouraging it’s user by using tesco.com.
Tesco focuses on gathering unwanted bags of plastic from user and they used in recycling them
therefore, Tesco is also committed to adopt renewable sources and create 100% electricity by
2020 that increases brand image of company. Therefore, in addition to this, due to increase in
pollution, Tesco do not focus on environment that impose negative effect on organisation
(Goyal, Routroy and Singhal, 2019).
Legal factor imposes direct effect on the performance of organisation to accomplish
objective. Therefore, they also confronted legal action related to accounting as well as
misleading investor that imposes negative effect on company. In addition to this, TESCO also
focuses on follow all rules and regulations that effect organisation positively.
Assess the importance of effect of environmental forces at business organisation, market, and
sector or industry level.
The importance related to environmental forces in company by using Porter five force
models. It is used to assess appropriate resources that help in accomplishing competitive edge.
For assessing competitive atmosphere of Tesco, the Porter five forces model is adopted by
organisation that is given below:

Threat of substitute of products the threat of substitute in retailing organisation is
determined as a low for food item and it is high for non food items. Therefore, it has been
analysed that new entrants bring innovation, innovative ways of performing thing and keep
pressure on Tesco by using minimum pricing strategy, lowering down price and offering new
value proposition for its user. The TESCO focuses on handling all kind of challenges and build
appropriate barrier related to safeguard in its competitive edge. Therefore, it is not easy for new
organisation to operate their business at that level in which TESCO operates. Hence, by giving
innovative goods and services that bring innovative customer and also provide reason to hold
customer to purchase product which is provided by Tesco PLC. They also focus on maintaining
economy of scale that helps in bringing down fixed cost. The Tesco focuses on providing
innovative products and services to its user for satisfying their needs (Hillary, 2017).
Bargaining power of suppliers the whole organisations in retail sector focuses on
purchasing raw material from different kind of supplier. Supplier plays a dominant position that
reduces profit margin of Tesco at market place. The higher bargaining power of supplier
emphasised on lowering down profit margin within retailing sector. The Tesco focuses on
maintaining appropriate supply chain along with multiple suppliers for satisfying its user. They
also focus on maintaining product design by adopting various material that help organisations to
shift their taste to product which is provided by Tesco. They focus on providing superior quality
of goods and services to its user for satisfying them.
Bargaining power of buyers purchaser are determined as a demanding a lot they need to
purchase superior product at minimum cost; it put pressure on Tesco to earn profit in long run.
Therefore, the base of customer is powerful, hence, it is determined as a bargaining power of
user is high and they have a capability to increase discount during particular phase of time
period. For tackling bargaining power of consumer, the Tesco focuses on increasing base of user
that help in offering an opportunity to organisation to streamlines sales as well as manufacturing
process. By rapidly using innovative product, customer focus seeking discounts on product given
by Tesco that help in reducing the threat of competitor over rivalries during particular phase of
time period.
Threat of substitute if product meets same need of user in various ways, then the threat of
substitute goods are determined as a high it provides value proposition that is unique and
different from current offering of industry. Tesco focuses on having service orientation other

than just having a product orientation. Therefore, they focus on decreasing switching cost of user
during particular phase of time period.
Rivalry among existing competitor if rivalry among existing competitive within an
industry is determined as intense then it decreases whole profitability of industry. The Tesco
focuses on maintaining sustainable differentiation in order to tackle intense competition between
users in retail sector. By maintaining scale in order to compete better that is determined as a main
motive of business organisation during particular phase of time period that helps in increasing
profit in future period of time (Kumar and Garg, 2018).
Explain understanding need of a variety of stakeholders to selected organisation.
Stakeholder analysis adopted by organisation for understanding need of different kind of
stakeholder in Tesco that is going to be mentioned below:
High power, highly interested people the Tesco focuses on assessing engagement level
of individual person and put best efforts in order to satisfy their need.
High power less interested people herein, the Tesco focuses on keeping sufficient work
with these individual person for satisfying them but they do not give them work that provide
boring environment to them.
Low power, highly interested people: Herein, the organisation focuses on providing
information to individual person and talk to them to make sure that there is no different kind of
issues or problems are arising. The individual person can be useful in providing detailed
regarding specific project.
Low power, less interested people herein, the individual person focuses on making
appropriate communication with another person in order to communicate them in an appropriate
manner. It is necessary to assess stakeholder analysis in order to analyse needs and wants of
specific person during particular phase of time period (Mishra and Mohanty, 2016).
Measure appropriateness of responses of organisations to policy actions taken by key
stakeholders.
There is different kind of stakeholders such as a government, customer, employee, supplier
and many more. Therefore, there is different stakeholder that is going to be mentioned below:
Employee it is necessary for management team of Tesco to assess need of employee in
order to conduct different task in an appropriate manner. Employees are very important for
organisation to increase productivity levels in future time period.

Customer is determined as another stakeholder for which it is necessary for them to satisfy
their need for increasing profitability level of company in future period of time (Rapoport, 2016).
CONCLUSION
On given assignment, it is assessing that business environment involves micro and macro
elements that impose direct impact on functions of organisation. It is important for organisation
to assess overall elements in an appropriate manner. In this assignment, there is a discussion
regarding stakeholder analysis that will alter and influence company. It also provides an
explanations regarding environment that impose direct effect on organisation and also the
appropriateness of responses in which policy is undertaken by main stakeholders.

REFERENCE
Books & Journal
Al Baghlani, A.L.K., 2018. An investigation into strategies used by Iraqi SMEs to survive in the
hostile environment: the case of Al-Khaleej Company. Academy of Entrepreneurship
Journal, 24(1), pp.1-13.
Dammer, D., 2017, September. Research of mathematical model of insurance company in the
form of queueing system in a random environment. In International Conference on
Information Technologies and Mathematical Modelling (pp. 204-214). Springer, Cham.
Friberg, L., 2018. Cadmium in the Environment. CRC press.
Goyal, S., Routroy, S. and Singhal, A., 2019. Analyzing environment sustainability enablers
using fuzzy DEMATEL for an Indian steel manufacturing company. Journal of
Engineering, Design and Technology.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Kumar, K. and Garg, H., 2018. TOPSIS method based on the connection number of set pair
analysis under interval-valued intuitionistic fuzzy set environment. Computational and
Applied Mathematics, 37(2), pp.1319-1329.
Mishra, S. and Mohanty, J.K., 2016. The predictors of employee engagement: A study in a ferro
alloys company of India. Global Business Review, 17(6), pp.1441-1453.
Rapoport, A., 2016. Human aspects of urban form: towards a man—environment approach to
urban form and design. Elsevier.