This report provides a comprehensive analysis of the business environment, focusing on both internal and external factors that influence a company's operations and performance. The introduction defines the business environment and highlights its dynamic nature. The report delves into external factors, utilizing the PESTEL analysis to examine political, economic, social, technological, environmental, and legal elements, with examples from Tesco. It discusses the advantages and disadvantages of these external influences. The report then explores internal factors, using SWOT analysis to assess strengths, weaknesses, opportunities, and threats, again referencing Tesco. Additional internal factors such as human resources, financial and marketing resources, labor management, plans and policies, and physical assets are discussed. The advantages and disadvantages of internal factors are also evaluated. The conclusion emphasizes the importance of understanding and adapting to both internal and external factors for business success, stressing the need for market research and strategic analysis. The report references various sources, including journal articles and books, to support its findings.