BMP3002 Semester 1: Analysis of Internal & External Factors on Tesco

This report examines the internal and external factors influencing Tesco, a prominent multinational grocery and general merchandise company based in the United Kingdom. The report begins with an introduction to Tesco, followed by an analysis of the impact of both internal and external factors on its business environment. The main body of the report utilizes SWOT and PESTLE analyses to assess various factors, including strengths, weaknesses, opportunities, and threats, as well as political, economic, social, technological, legal, and environmental factors. The report also discusses how Tesco's operations are affected by fluctuations in the economic cycle, legal considerations, technological advancements, environmental sustainability, and cross-cultural activities. The conclusion summarizes the significant impact of these factors on the company's performance. The report references several academic sources to support its findings.

Internal and External
Factors

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Discuss the impact of the internal external factors on the business environment..................2
Explain the different ways by which the business environment gets affected the external
environment............................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
1

INTRODUCTION
Business is considered as the activities or the entity which is engaged in the performing
the certain task with the consideration of completing the various task in an appropriate manner.
There are various factors which affects the business environment and it is necessary for the
business to understand the emerging changes and the capabilities so that they can meet the needs
and wants of their potential customers. Tesco is the chosen organsiation for this report and it is
the multinational groceries and general merchandise company in the United Kingdom. It is
established by the Jack Cohen in 1919. This report will cover the impact of pestle analysis in the
business environment and also assess the impact of various which is affecting the business
environment.
MAIN BODY
Discuss the impact of the internal external factors on the business environment.
SWOT Analysis
It is a framework of analysing micro factor of the business environment which is
impacting the performance and the overall operations of the business. In context of Tesco , There
are various factor of SWOT analysis is explained as follows:
Strengths Weaknesses
 It is the leading company which is
having effective establishment in the
large market.
 The company is having the strength of
150000 employees, who are working
towards the goal of the company.
 Each store is having the stock of
around 30000 lines in which 20% are
own label products (Susanty and et.
al., 2019).
 Rising price of the product services
impact the sale of the company by
which they slowdown the profitability
of the company.
 There is a stiff competition in the
every segment of the traditional sector
by which the companies facing huge
loss in the company.
Opportunities Threats
 The company can enter into new  The company is facing increase in
2

market through joint venture for
partnership so that they can attain
higher profitability.
 The company can introduce self check
in check out machines in there stores
for 24 hours which can increase the
sale of the company.
globalisation as a challenge as well as
the opportunity.
 It is the obligation to the company to
offer the the best product so that they
can meet the competitive advantage in
the large market.
PESTLE Analysis
It is the framework of analysing the external factors of the business environment so that they
can take the appropriate actions with regards to change environment and the competitive market.
In context to Tesco, there are various factors which is impacting the business and they are
explained as follows:
 Political factors: these are the factors which includes the government related changes
which occur in the business environment so which includes government policies, taxation
rate etc. It is the UK based company which is having good brand image in the market and
there is the stable government which helps the company to boast their sales. On other
hand, there is the huge impact of Brexit on the performance of the company which is
impacting the overall operations and the profitability of the company. Political relation
with Qatar impacting the overall operations of the company (Dana and Gozalzadeh,
2017).
 Economical factors: these are the factors which includes the inflation rate, economic
growth, disposable income of the individual which affects the overall business of an
business. In relation to Tesco, they are having the Effective GDP rate in the market and
also having the sufficient disposable income of the consumer which helps the overall
profitability of the company. As the increase in the price of the company affects the
overall sale of the company. They must needs to understand the market environment of
the UK so that they can comply with the other related factors which can boast the
profitability of the company.
 Social factors: these are the factors which includes the socio-culture aspect of the
individual which reflect the culture, values and norms of the individual in the
3

organisation. This is significant for the company to have the effective use of the business
organisation so that they can offer the product which can or price effective and also
reflect the overall operations of the company. In context to Tesco, they are also offering
the organic products which can meet the changing demand of the potential customers as
the people of UK is more influencive towards the organic products which can boast the
sale and profitability of the company (de Loë and Patterson, 2018).
 Technological factors: these are the factors which includes the change and advancement
in the technology so that the company can meet the emerging trends in the large market
and also fulfill the needs and wants of their potential customers. Tesco offering a self
check in and check out counters which help them for the easy accessibility of large group
of customers and also the company towards advancement. It is the main consideration
which can give the path to the company to move towards growth and can explain their
Market by meeting the changing wants off their potential customers.
 Legal factors: these are the factors which includes the Various laws related to the
consumer law, employment law and other import and export duties on products and
services. It is important for the for the business to have the proper alliances with the legal
factor so that they can run their business in the lawful manner. In relation to Tesco, they
are offering the best services to their potential customers and it become difficult for the
company to comply with the law of different nations and run the whole business
environment in an appropriate manner (Gleim, Smith and Cronin 2019).
 Environmental factors: These are the factors which include the environmental aspects
of the company which includes the climate change, pollution in the business environment
which is impacting the overall business environment. In context to Tesco, they are
conducting the various environmental campaigns in order to save the environment and
also emphasizing on recycling process so that they can help the company to use their
business resource in an appropriate and efficient manner (Pham and Tipton, 2018).
Explain the different ways by which the business environment gets affected the external
environment.
There are various factors which impacting the external environment of the business which
is explained as follows:
4

 Fluctuations in economic cycle: When the business is having the major impact on the
external factors. They must consider the various aspects so that they can meet the
economic requirements of the business and in context of Tesco, they are complying with
the best services so that they can meet the changing requirements of the economy.
 Maintain legal consideration: it is very important for the business to have the legal
consideration and comply with the all the laws which is imposed by the government of
UK by which they can contribute the overall effectiveness of the business. In context to
Tesco, they are operating their business in the international market and it become tough
for them to have the proper enforcement of the laws in order to run the business in an
appropriate manner.
 Enhancement of technological advancements: it is necessary for the business to have
the effective compliances with the innovation strategies so that they can run their
business in an appropriate manner. In context to Tesco, they are implying in the business
environment in order to meet the technological advancement in the organisation. It is the
main consideration to have the better services so that they can comply with the Sale and
profitability of the company (Sinthupundaja, Chiadamrong and Kohda, 2019).
 Improve the environmental sustainability: business environment is interested with the
warriors aspect which includes the sustainability and it is very important for the company
to have the various business operation that must be done with the consultation of saving
the environment and using also says which are not harming the business of the
organisation.
 Consider cross cultural activities: In an organisation, it is important to have diversified
culture at the workplace so that they can meet the changing requirements of the company
and they can establish the meet the changing requirements of the business.
CONCLUSION
It is concluded from the above report that internal and external factors have a great impact
on a business and there are also running the whole business organisation by understanding and
evaluating the imapct of the business environment. Political economical and environmental has
the the negative impact on the business and social factor has the positive imapct on the
performance of the company.
5

6

REFERENCES
Books and Journals
Dana, A. and Gozalzadeh, E., 2017. Internal and external imagery effects on tennis skills among
novices. Perceptual and motor skills, 124(5), pp.1022-1043.
de Loë, R.C. and Patterson, J.J., 2018. Boundary judgments in water governance: Diagnosing
internal and external factors that matter in a complex world. Water Resources
Management, 32(2), pp.565-581.
Gleim, M.R., Smith, J.S. and Cronin Jr, J.J., 2019. Extending the institutional environment: the
impact of internal and external factors on the green behaviors of an individual. Journal
of Strategic Marketing, 27(6), pp.505-520.
Pham, G. and Tipton, T., 2018. Internal and external factors that support children's minority first
language and English. Language, speech, and hearing services in schools, 49(3),
pp.595-606.
Sinthupundaja, J., Chiadamrong, N. and Kohda, Y., 2019. Internal capabilities, external
cooperation and proactive CSR on financial performance. The Service Industries
Journal, 39(15-16), pp.1099-1122.
Susanty, A. and et. al., 2019. The role of internal and external drivers for successful
implementation of GSCM practices. Journal of Manufacturing Technology
Management.
7