Analysis of Business Environment and Tesco's Strategic Position

This report provides a comprehensive analysis of the business environment, focusing on the operations of Tesco, a major multinational retailer. It begins with an overview of different organizational types, including private, public, and voluntary organizations, exemplified by Tesco, the NHS, and Oxfam respectively. The report then delves into the size and scope of these organizations, examining their structures and key stakeholders. A crucial section explores the interrelationship between various organizational functions, such as production, research, finance, marketing, and sales, highlighting how these departments impact each other and contribute to overall business objectives. Furthermore, the report utilizes PESTLE analysis to assess the impact of macro-environmental factors on Tesco's performance, considering political, economic, social, technological, legal, and environmental influences. Finally, the report conducts a SWOT analysis of Tesco, identifying its internal strengths and weaknesses, as well as external opportunities and threats, and interrelates these with the external macro-environmental factors. The report concludes with a summary of the key findings and implications for Tesco's strategic positioning.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Overview of different types of organisations and the growth of international business......1
P2 Explain the size and scope of several type of organisations..................................................3
TASK 2............................................................................................................................................4
P3 Explain the relationship between different organisational functions.....................................4
TASK 3............................................................................................................................................5
P4. Impact of Macro Environmental Factors on the working of Tesco......................................5
TASK 4............................................................................................................................................7
P5 Internal Strengths and Weaknesses, Opportunities and Threats of Tesco.............................7
P6 Interrelation of Strengths and Weaknesses with External Macro Environmental Factors.. . .9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business refers to an economy activity which is conducted by the human in order to adopt
continuous production and distribution of goods and services for satisfying the needs and wants
of the customers. Other, business environment is related to the study of all the internal and
external factors which have great impact on the performance business organisation. All these
factors includes employees, customers, suppliers, economic trends, technological factors and
others. This file is based on the private, public and voluntary organisations which are Tesco, NHS
and charity Oxfam. This report will cover about the different type of organisation on the basis on
their scope, size and purpose. Along with this, how the organisational functions are related with
each others and their impact on the structure and objectives of the business will discuss in this
file.
TASK 1
P1 Overview of different types of organisations and the growth of international business.
In the present corporate world, different type of organisations are available like profit,
non-profit and non-governmental which all are different from each other as per their purpose or
objectives. The detailed description of these organisations are as follow:
Private Organisation\ profit organisations
Private organisations are those which are operated by an individual or companies with the
purpose of earning higher profit by providing a range of products and services to the customers.
The selected organisation in this is Tesco which is a British multinational general merchandise
retailer(Glova, Sabol and Vajda, 2014).
Purpose
The main aim of this firm is to earn higher profitability and to capture a big market share
in short duration of time.
Legal Structure
 Sole proprietorship- This is the most common business form in which a single person is
responsible for bearing all the losses and profit.
 Partnership- In this category two or more than two individuals are formed an
organisation by considering an agreement in which the profit or loss ratio of each
individual is clearly defined.
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 Private Limited companies- In this category the two or more than two individuals are
required in order to establish their business in which all the partners are liable to all the
liabilities as per their share in the company(Savrul, Incekara and Sener, 2014).
As per the above discussion it can be stated that Tesco is categorised under private
companies as they are operating their activities for achieving higher profitability.
Public sector company/ non-profit company
These organisations are those which are conducted their activities for social service due to
which it is under control of national, state and local government. The funds rising for this
business is through fees, donation and taxes. The chosen organisation in this category is National
Health Care who's legal structure and purpose is explained beneath:
Purpose
The main motive of this organisation is to render all the medical services to the people
without earning any profit. Also, they are conducting their activities with the purpose of remove
inequalities from medical facilities.
Legal Structure
 Central government- The major responsibility of this government is to operate all the
operation and policies at the national level(Palepu and Healy, 2013).
 State government- In this, the board of members are responsible for regulating the
policies at state level.
 Local government- In order to maintain the medical facilities at small scale some of the
authorised person is liable to operate all the activities appropriately.
NHS is controlled and operated by the central government as they are operating their
functions related to providing the medial services across the nation. The functions of them
bifurcated in three categories such as primary, secondary and tertiary sector.
Voluntary Organisation/ Non-governmental organisation
This type of organisations are conducting their activities for accomplishing the needs of
the society and develop the economy. It is included in the tertiary sector as they are working on
the concept of non-profit. The selected organisation in this category is Oxfam which is a
confederation of 19 independent charitable organisations who are concerning for eliminating the
global poverty.
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Purpose: The main purpose of this organisation is to decrease the global poverty so that
the people can live healthy and happier life(Sena Ferreira and et. al., 2012).
Legal Structure
 Trustee- In this structure, some of the authorised person take responsibility to establish
proper control and monitor on the organisational activities.
 Charity-Funds for the business is arrange by the donors and investors in order to operate
all the business operation smoothly.
The Charity Oxfam is categorised under charity legal structure as their funds are also
rising from events, donors, government and other in order to upliftment of society.
P2 Explain the size and scope of several type of organisations
Size and scope of various organisations:
Private organisation:- Tesco
Tesco is well-known multinational groceries retailer which is operating their activities at
global level. This is considered as ninth largest organisation which headquarter are situated in
UK, England, Hertfordshire and Welwyn Garden city. This business organisation is operating
their business in 13 countries through its almost 5000 outlets and approx 4,50,000
employees(Tesco UK brief history and overview, 2017). Due to vast industry they are following
hierarchical structure which enables them to regulate the free flow of information and
connectivity which enables them to generate positive environment in the organisation. The key
stakeholders of this organisation are customers, employees, suppliers, financiers, local
community and many others(Theodorakopoulos, Kakabadse and McGowan, 2014).
Public Organisation- NHS
NHS is operating their activities in order to provide a range of medical facilities to the
people without making any kind of profit. These services include free eye test, heart surgery
services, mental healthcare and many others. They have huge scope in the economy as because
they are operating their activities for social development. The major key stakeholders of this firm
are director of public health, research scientist, procurement and many others. Due to the large
number of employees in their organisation which is almost 1.52 billion they are following flat
structure in their firm as it create proper communication among the employees and management
which have positive impact on the employees.
Voluntary Organisation:- Charity Oxfam
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Oxfam is a charitable organisation which is operating their activities for enhancing the
lifestyle of the people. In the aspect, they are conducting various functions in order to remove the
poverty, disaster relief, advocacy and many others. They are working through its almost 20
national organisations. It is a non-profit organisation who has almost 5300 employees and they
are working with more than 22,000 volunteers. In order to maintain the positive environment in
the organisation they are adopting the Matrix structure in which the employees have right to
reporting as grid rather than traditional hierarchy. In other worlds, the employees have right to
communicate with the both functional and production manager. The main key stakeholders of
this business are trade unions, trustee, corporate partners, institutions and government. The scope
of this organisation is higher as because they have motive of social development(Schaltegger,
Lüdeke-Freund and Hansen, 2012)
Complexities of transnational, international and global organisation structures:
Transnational: This is the much more complex organisations as in this the people are
working at different level due to which the conflicts are arising in the business which might delay
in the decision making process. Oxfam is a transnational organisational as they are operating at
different level.
International: In this category all those firms are included who are exporter and
importers which have does not invest any amount in outside the country. In this situation the
organisation have to face various problems while tax duties remain in the changing position.
Global: This refers to those organisations who are conducting their operations at global
level. In this, the organisation have to consider the different countries rules, regulations and
culture. Tesco is categorised under this as they are operating their functions at multinational
level(Iyer and Henderson, 2012).
TASK 2
P3 Explain the relationship between different organisational functions
The functions of each department within the organisations greatly related with each others
which provide huge benefit to the company in achieving their goals and objectives which can be
understood by the following points:
Production and Research department: A healthy relationship between these
departments have huge benefit to the company as the research department is responsible for
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collecting the information about the customers demand, market situations and new effective
technologies which enables the production department of Tesco to manufacture their products
accordingly which will help them in attaining the higher productivity and profitability in the
business(Tutunea and Rus, 2012).
Finance and marketing department: The positive relationship between their
departments is essential in order to operate all the business activities effectively. Finance
department is responsible for allocating the funds among all the departments. Due to which the
marketing department is completely depend on the finance department for accomplishing the
requirement and needs of the fund so that they will be able to operate all the activities related to
promote the products in the marketplace with great efficiency.
Marketing and sales department: Marketing department in the organisation is liable for
creating the awareness in the market about eh products and services in the marketplace. Due to
which the overall success of the business depend on the marketing department so it is essential
for them to operate their activities appropriately which will able to attract more customers in the
organisation products and services. This will direct impact on the sales department as they will be
able to cater more customers by selling a range of products.
Hence, it is necessary for manager of Tesco to create healthy relationship with all the
departments. As each of the department in the organisation have their own contribution in
achieving the organisation goals but all the department are related with each other so in the aspect
the business manager must focus on maintaining the healthy relationship so that the conflicts can
be minimised and desired outcomes of the business can be attained in the limited period of
time(Zeng, Li and Duan, 2012).
TASK 3
P4. Impact of Macro Environmental Factors on the working of Tesco.
In order to assess the impact of external environment on the performance of the business
Tesco can use the PESTLE analysis which is define below:
Political factors: These factors are related to the government rules and regulations,
policies and inventions which can affect the overall organisation in a great manner. It includes tax
rates, political instability, unemployment rate and others.
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Positive- The business organisation of Tesco can sustain their business position and maintain
their activities in UK economy as in the UK government policies remain same for a longer period
of time(Tho and Trang, 2015).
Negative- The change in the government policies has also negative effect like if the import duty
will increase it will direct impact on the profitability of Tesco as they are importing inventory
from outside the UK from Easy Asia and China.
Economical factor- This is related to those factors which are occurring due to the
economy of the business which includes inflation rate, interest rate, labour rate and others. The
consideration of these factors in the business is necessary otherwise it will lead the negative
impact also.
Positive- The business manager of Tesco can earn higher profit as in the UK the interest rate is
lower which open the path of the success for the business.
Negative- Economy factors also have some negative impact on the performance of the business.
For example, if the inflation rate in UK will rise then the purchasing power of customer will
affect in the negative way which will decrease the overall profitability of Tesco.
Social factors- These are those factors which are arising because of changing perceptions
and preferences of the consumers. The positive and negative impact of these factors on the
business is describe below:
Positive- Tesco organisation needs to operate their activities as per the customers demand and
needs as it will open up all the success and growth paths for the business.
Negative- In the case if the manager of this organisation will not consider the changing
preferences and needs of the customers they have to face decreasing position of their firm in the
marketplace(Ghezzi, 2013).
Technological Factor : These are related to the advancement or development of the
technology in the marketplace.
Positive: By using the update technology the business can increase overall productivity and
profitability. For example, if Tesco will use the proper cyber security in their business then they
will be able to attain more success and growth in the business.
Negative: Adoption of advance technology in the business might increase the cost of the
organisational functions.
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Legal factor : These are related to the government rules and regulations which needs to
carry out by the organisation in their decisions in order to operate all activities smoothly.
Positive- If the Tesco organisation operate all the activities by considering the Food Retailing
Commission then they will be create their positive brand image in the marketplace.
Negative- After the Brexit the reputation and brand image of the company have negatively
affected(Avramenko, 2012).
Environmental factor: These factors are related to the environment which includes
climate conditions, weather, global changes and others.
Positive- By reducing its carbon footprints and waste products Tesco will be able to increase
social awareness among the society.
Negative: If business will not consider the environment safety in their decisions then it will lead
the negative impact on their brand value.
TASK 4
P5 Internal Strengths and Weaknesses, Opportunities and Threats of Tesco.
In order to evaluate the internal factors of the business manager of Tesco and NHS can
use SWOT analysis as it will define their strengths, weaknesses, opportunities and threats as well
so that they can regulate their activities accordingly.
SWOT of Tesco:
Strength Weaknesses
 Tesco have higher recognised due to its
high quality products.
 They are able to cover a big market
share and leading position.
 Tesco has huge presence in global
market also by its 6800 outlets in 14
countries.
 They are using superior technology in
their production activities.
 Supply chain of the organisation is very
strong.
 The major weakness is that they are not
able to operate in US and Japan.
 They have to financial crisis due to
their high debts.
 Due to their low cost strategy they are
facing lower profitability.
 The market research capacity of them is
not appropriate.
 Due to the Brexit referendum
performance of the business in
lowering position.
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Opportunities Threat
 By expanding the online business they
can earn higher profit(Nofal and Yusof,
2013).
 They can cover big marketplace by
increasing the premium range products.
 Through appearing in the overseas
markets they can attain higher growth.
 By making partnership with other
companies they can attract more
customers.
 Expanding their Jack's business which
is new discount store.
 The have to face tough competition
from Aldi, Carrefour, and others.
 In the case if the pound value will
decrease then the product prices will
increase.
 They have to face economic crisis and
credit crunches.
 In 2012, for their Christmas add they
have to face higher social media recoil.
 Prices rising of raw material also
considered a huge threat for them.
SWOT of NHS:
Strength Weaknesses
 The is the world-renowned organisation
as they are operating for social service.
 They have adopted standardisation
methods for providing best medical
services.
 The main focus of them on improving
efficiency by avoidance of diagnostic
test duplications.
 They have adopted advance nursing
practices.
 In the organisation, the presence team
is multidisciplinary.
 The conflicts is arising while improving
the quality of rural care.
 The instalment and maintenance cost of
this business is higher.
 Lack of the training session for the
staff.
 The issue of synchronization of records
is arising.
 It is not able to reach the rural areas as
well.
Opportunities Threats
 In order to enhance their size they  Various rivals are exist in the
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should make partnership with other
agencies.
 The should adopt curriculum changes
in order to enhance the performance.
 Develop healthy relationship with
clinical specialist.
 They should focus on adopting
effective delivery system.
 Collaboration with provide partners in
the both primary and secondary care.
marketplace like Fitnut, Nuffield health
etc.
 Loss of revenue due to from out of
network patients.
 Lack of privacy policies in the
organisation.
 Financial restraint in NHS lead the
negative impact on their operations.
 The decrement from the secondary care
lead the organisation in lower position.
P6 Interrelation of Strengths and Weaknesses with External Macro Environmental Factors.
The interrelatedness of the macro environment with strengths and weaknesses are as
follow:
Political factor – These factors define about how government intervenes in an industry pr
economy.
Strength: The manager of Tesco has considered all the political factors in their decisions
which have great benefit for them(Savrul, Incekara and Sener, 2014).
Weaknesses: Continuously changes in the policies and rules will affect the performance
of the company in negative manner.
Economical factor – These are occur due to the changes in economy situations includes interest
rate, GDP rate and others.
Strength: If the GDP rate is high in the economy then it will direct the positive impact on
the profitability of the business.
Weaknesses: If the labour rate will increase then the overall cost of the business of Tesco
will increase.
Social factor- This factors are occurring due to the shared beliefs, preferences and behaviour of
the consumers. In involves career attitude, population growth and many more.
Strength: Tesco is offering as per the age, taste, needs of the customers which provide
higher profitability to them.
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Weaknesses : As consumers have changing nature due to their choice and requirements
remains in changing position which create conflicts for the business.
Technological factors : It includes all the innovation and advancement in the technology which
needs to implement by the Tesco(Glova, Sabol and Vajda, 2014).
Strength: The organisation will able to attain higher customers satisfaction and brand
value by producing the products as per the latest technologies and techniques.
Weaknesses: It increase the competition in the marketplace due to every organisation
give their focus on adopting higher technology in their activities.
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CONCLUSION
From the above file, it can be concluded that the consideration of business environment is
essential for the organisation in order to operate all the activities effectively. The various
organisations are present in the current scenario which are different from each other on the basis
of their scope, size, purpose and other aspects. The different external and internal have greatly
affected the overall performance of the business which has covered in this file. The manager of
the business can perform all the operations effectively by considering these factors which has
been described by giving the both model SWOT and PESTEL that will help the business in
assessing the positive and negative impact so that business can perform appropriately in the
marketplace.
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<https://www.eeph.org.uk/>.
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