BNU BA (Hons) Business Management: Business Environment Factors Report

This report analyzes the internal and external factors that significantly impact businesses, focusing on strategic planning and competitiveness. It begins with an introduction highlighting the importance of environmental analysis in today's competitive market. The report then explores the internal business environment, encompassing a company's strengths and weaknesses, followed by an examination of the external business environment, including opportunities and threats. The core of the analysis involves the application of strategic tools such as SWOT (Strengths, Weaknesses, Opportunities, Threats), PESTLE (Political, Economic, Social, Technological, Legal, Environmental), and Porter's 5 Forces, using Tesco as a case study. The SWOT analysis reveals Tesco's strengths, like its market position and use of technology, and weaknesses, such as its low-cost strategy and past operational failures. Opportunities like joint ventures and cashless stores are discussed, along with threats like Brexit and economic crises. The PESTLE analysis is used to categorize external factors, while Porter's 5 forces model helps assess industry competitiveness. The report concludes by summarizing the impact of both internal and external factors on business performance, emphasizing the importance of these models for strategic decision-making.

Main internal and external factors
that affect businesses

Table of contents
 Introduction
 Internal business environment
 External business environment
 SWOT Analysis
 PESTLE Analysis
 Porter’s 5 forces
 Conclusion
 References

Introduction
 Competition is increasing day by day
and companies need to make proper
strategic planning to compete in the
market, so they need to analysis and
maintain the internal and external
environment.

Internal business environment
 It refers to those activities and inlying
forces which is present in the
company, and affect their
performance. Along with it comprise
the strengths and weakness of the
company which can be controllable.

External business environment
 It refers to the set of those factors which
is indirectly affect the company
performance, often the company's
boundaries. Along with it have a
potential to affect the organization
performance and functionality. It is
comprise by the opportunities and
threats, and its is uncontrollable.

SWOT Analysis
Strength
 Tesco having a biggest grocery retailer in the UK, it is the number
one supermarket in the UK, and the highest sale and revenue as
compared to supermarket chains.
 Tesco use advance technology to enhance the shopping experience
its customers. It beneficial for the company growth.
Weaknesses
 Failed operations in the US and Japan, Tesco company failed in
export operations forced the company to close stores in japan after
nine years.
 Tesco weakest point is low cost strategy because of this they can
lead to reduce the profit margin.
Opportunities
 Joint venture- There is an opportunities for the Tesco company for
joint venture in the region where the Tesco stores are doing
underperforming. So they can try to connect with the local
companies and gain market knowledge it helps to improving the
performance of the company.
 Cashless stores is giving a opportunity to the Tesco company to
attract the costumers, and most of the consumers are seeking the
cashless tractions options.
Threats
 Brexit Referendum- The trade deals and the cost matters have posted
a threat for the Tesco company, they need to work on it.
 Economic crises and credit crunches- This thing will affect the
company performance such as legal and tax matters, credit crunches,
government regulations and others thing are impact the operation
efficiency and performance of the Tesco company in critical regions.

PESTLE Analysis
 It is one of the major strategic tools
which are used to divide the external
environment into multiple dimensions
for the sake of ease of analysis.

Porter’s 5 forces
 This is one of the most extensively
used models of business analysis
which helps understand the current
nature and competitiveness of the
industry based on the activity of
rivals and availability of substitutes
as an example.

Conclusion
 In this above report it discuss that internal and external environment affect the
business by using such models and theories. PESTLE and SWOT analysis is a
related to the external factors which affect the company performance, along
with it is uncontrollable.

References
 Aggarwal, A., 2021. A Theoretical Framework to Analyze The Aspects of
Internal and External Environment in Innovation Adaptation in Micro, Small
and Medium Enterprises (MSMEs) (Doctoral dissertation, Entrepreneurship
Development Institute of India).
 Goukens, C. and Klesse, A.K., 2022. Internal and external forces that prevent
(vs. Facilitate) healthy eating: Review and outlook within consumer Psychology.
Current Opinion in Psychology, p.101328.

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