Macro Environmental Factors Impact on Tesco: A Business Report

This report analyzes the macro environmental influences on Tesco, a major UK-based supermarket. It begins by defining different types of organizations (public, private, and voluntary) and discussing their purposes and legal structures, including sole traders, private limited companies, partnerships, and public organizations. The report then examines the size and scope of various organizations like Sainsbury, BBC, and Cancer Research. It proceeds to analyze the relationships between different organizational functions (finance, marketing, HR) and how these link to objectives and structure. A comparison between micro, small, medium, and large enterprises is provided. The report concludes with an analysis of Tesco's internal and external factors, identifying strengths, weaknesses, and their relationship with external macro factors. The report uses Tesco as a case study to illustrate key concepts in business environment analysis.

Macro Environmental
Influence

Table of Contents
INTRODUCTION ..............................................................................................................................3
TASK 1 ................................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal...........................................................................................................................................3
P2 Discuss size and scope of a range of different types of organisations........................................4
TASK 2.................................................................................................................................................6
P3 Analyse relationship between different organisational functions & how they link to objectives
/ structure.........................................................................................................................................6
TASK 3.................................................................................................................................................7
P4 Carry out comparison between micro, small, medium size and large enterprises......................7
TASK 4.................................................................................................................................................9
P5 Analyse internal and external analysis of specific organisation to identify strength &
weakness..........................................................................................................................................9
P6 Explain how strength & weakness inter-relate with external macro factors...........................10
CONCLUSION..................................................................................................................................13
REFERENCES...................................................................................................................................14
Books & Journal:...........................................................................................................................14

INTRODUCTION
In business sector, environment plays important role on the basis of which activities,
functions & operations are carried out in effective way. Business environment refers to all external
& internal factors which impact upon organisational functions & operations (Benmamoun, 2016).
Main aim of this report is to understand the impact of business environment within enterprise.
Tesco, a largest supermarket headquartered in U.K. The firm is located at global level & deals in
products such a as groceries, consumable items, and many more. This report comprises of different
types & purposes of public, voluntary and legal organisations, size & scope of range of different
organisations, relationship between various organisational functions, positive & negative effects of
macro environment on operations, SWOT Analysis and inter-relate with external macro factors.
TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors and
legal
In business, it is important to understand the business structure because it reflects the
workflow of enterprise. Market is wider & broader in which various types of different organisation
exist. It is essential to be aware about these organisations so that goals are achieved in appropriate
manner. Organisation is being selected on basis of different key factors which are being focused by
every marketers. There are several types of structure of organisations which are described as below-
Private organisations- Private organisations are those type of enterprises which run
business with aim of gaining profit & are owned by private individual. These can be large,
medium or small depending upon their level of business structure. The aim at long survival in
business market & focuses of self growth development. So, legal structure of these enterprise is
discussed below-
Sole traders-
These are those who type of business which are run by owned by single person who is to
be known as owner. Sole traders are solely responsible for managing & running business solely.
Types of sole traders such as clubs, restaurants, cafe, etc. Sole traders main aim is to survive in
competitive for short or long period of time (Bereznoy, 2017).
Private limited-
This is another type of private organisations in which business has limited number of
shareholders. These type of companies mostly do not sell their share within market. Such type of
businesses have limited shared & which cannot use for trading. Furthermore, these type of

organisations only trade shares between their friends & family. Different types of private limited
companies are MC Donald which is being considered as public limited entity.
Partnership-
It is also being considered as another private enterprise in which agreements between two
companies are carried out with aim of working together with mutual cooperation & understanding.
It is most beneficial form of enterprise because profit, risks, loss are shared between both partners
equally. Partnership organisations such as Louis Vouitton & BMW have been into partnership since
long period of time.
Public organisation- These are those kind of enterprises in which everything is managed &
controlled under consideration of government rules or regulations. Main purpose of such type of
enterprise is to provide products, goods or services to community. There are various type of services
which are managed by government such as water, shelter, petrol, etc. An appropriate decision
making is required to carry out activities of such enterprises. For example- BBC a British
broadcasting company headquartered in U.K. It is viewed as world leading public service
broadcaster (Gligah, 2020).
Voluntary organisation- These are those type of enterprise in which are carried out with
purpose of social welfare & helping people within community. Such type of enterprise generate
revenue through campaigns, business man etc. Thus, legal structure of voluntary organisation
specified below-
Trust- It is type of voluntary entity in which it comprises of association, bodies,
shareholder, investors etc.
Therefore, from above discussed paragraph it is seen that as there are various type of
business organisations, with proper knowledge of these corporation running business become more
easier & approachable.
P2 Discuss size and scope of a range of different types of organisations
In enterprise, it is necessary to be aware about size & scope of entity so that decisions
making is done accordingly. As business sector is wide & large, every firm has different type of
size & scope which are described below-
Private limited
They are those who run business with aim of earning higher profit in market & generating
more sales revenue. Under these they follow their own implemented rules, regulations depending
upon their own requirements. So, Sainsbury is being viewed as private company which is

headquartered in U.K.
 Mission- Main mission of Sainsbury is to be first choice for food delivering products & to
provide high quality to achieve competitive benefits.
 Vision- Company's vision is to be most trusted retailer in field.
 Objectives- Their objective is to increase productivity of business at higher scale.
 Size- Sainsbury has larger size in employee as they have 116,400 employees working all
around the globe.
 Structure- This firm has hierarchical structure & they it reflects their working flow system
(Gomes, 2020).
Public limited-
In these, shares of entity are not used for sale & are used within a company only.
So, BBC is viewed as public limited firm.
 Mission- BBC mission is to provide & serve all audiences with higher quality of content.
 Vision- Their vision is to be the leading broadcasting company globally.
 Size- The size of BBC is larger as it is considered a larger broadcaster in world & has
employees over 22000 staff .
 Structure- This firm has hierarchical structure in which decisions are made by higher
authorities (Hiršová, 2018).
Voluntary enterprise
In such type of firms, they are established with purpose of helping people or society. For
example- Cancer Research is part of voluntary organisation.
 Vision- Main vision of firm is to help & protect health of people who are affected by cancer.
 Mission- Main mission of entity is to bring up cure for cancer affected people.
 Objective- To provide best cure to community & society.
 Size- This firm has employee around 300 and some volunteers.
 Structure- Cancer Research has flexible structure & they carry out both horizontal &
vertical structure.
Thus, it has been stated that it is crucial to be aware about different types of size as well as
scope so that strategies are implemented accordingly in effective way. Therefore, enterprise such

as public, private & voluntary are explained with their size/ scope. By examining of these it is
easy to make decisions.
TASK 2
P3 Analyse relationship between different organisational functions & how they link to objectives /
structure
In the current operating environment, it is essential to analyse all the functions of the
company so that resources can be utilised in effective manner. By interlinking all the objectives firm
can enhance their sales at higher scale. Organisational functions are necessary to be focused so that
it is easy to carry out everything in appropriate way. Moreover, they are responsible for achieving
of objectives in most effective way (Lin, 2019). Each & every entity has different forms of
functions depending upon which they firm is able to accomplish both short & long term goals
appropriately.
In relation to Tesco they are multinational retailer having their operations at higher scale and their
overall functions are linked with structure of business which are evaluated below as:
Finance & market department- These departments are interconnected with each other as
they are the main pillar behind executing business operations in effective manner. The marketing
department is having responsibility of promoting goods at market place and developing awareness
among the people. The finance department plays role of arranging finance for different activities so
that business goals can be achieved effectively. In reference with chosen entity they are having
focus on these department as it results in achieving organisation goals and interrelation of all
strategies at work place.
Marketing & HR department: The HR department at work place is the major pillar
because they are having the responsibility of managing the workforce in order to effectively carry
out business activities. This department is useful for effectively executing business activities so that
business goals can be achieved. Tesco is having good human resource personnel who will enhance
work productivity so that organisation can achieve success in their operations. The marketing
department assign roles to employees so that work can be executed accordingly this results in
achieving business success. The inter-relation between these too is easily connected & these are
top most core functions of business which are responsible for achieving goals (Mahlangu, 2018).
Human Resource & finance department- These departments are also interrelated with
one another as they help business to make decisions in the most effective manner. Their main role is
to arrange funds for executing business activities. These are related with HR department of business
as they can recruit potential employees who will enhance their sales index. In context of Tesco, they
are working effectively so that business objectives are attained. By accepting the relations, the

chances of errors are minimal so both these divisions can work effectively for achieving set
business goals. Furthermore, HR are responsible for hiring & recruiting skill & talented staff .
From the above analysis it can be stated that it is most vital factor for managers in order to
develop interrelationship among the departments. This is most important factor for TESCO in order
to accomplish business goals so their set targets can be easily accomplished in desired time frame.
The interrelations of structures help in minimising chances of mistake so that operations are
performed smoothly without facing any difficulty. Moreover, it is also specified that the functions
are required to be carried out in such way that positive results are achieved (Metcalf, 2019).
TASK 3
P4 Carry out comparison between micro, small, medium size and large enterprises
In market, different types of enterprise exists which are small, micro, medium & larger on
the basis of which activities, & operations are carried out. It is important to be aware about these so
that it is easier to achieve goals & objectives in appropriate way. Through understanding these type
of enterprises, decisions are made accordingly.
BASIS Micro
Enterprises
Small firm Medium
enterprises
Large enterprises
Meaning Micro enterprise
are those which
has balance sheet
of amount €2
million. These
types of entity
mostly have nine
people or less than
nine.
These are those
type of firms
which do not have
turnover more
than £6.5million
& balance sheet
more than £3.26
million & also do
exceed their
employees size
more than 50
employees.
They are those
type of entity
which has balance
sheet of £18m &
has medium size
business income
of £36 million.
(Nguimkeu, 2016).
Large firms are in
which they have
250 or more
subordinates
working in
management.
Funds These kind of
business generated
funds or financial
Such type of
entity generate
capital from
In medium firms,
they get funds
from selling of
In these
organisation, they
generates funds

resources through
small banks or
money lenders.
personal savings
or assets, banks
etc.
shares, investors
and many more.
In these types of
businesses, they of
ten use resources
in most efficient
manner so hat
funds are utilized
& used properly.
from business
associations
investors, banks
etc. They mostly
invest their funds
in appropriate way
with aim of
expanding their
business activities
at higher level.
Purpose Main aim of this
firm is to survive
in market by any
cause. Also,
another purpose is
achieve profit for
business for
smooth
functioning.
In this, objective
is to access to
resources at wider
scale for achieving
business
objectives.
(Schuetz, 2018).
Purpose of these
corporation is to
enhance profit &
earn dales revenue
& increasing
brand value in
market.
Large entity
objective is to
increase goodwill
of company at
global level.
Growth
In such kind of
companies, they
have slow growth
& limited
development in
specific market.
Growth scale of
these entity is
slow is at in
steady process &
they search for
different ways to
achieve higher
growth.
In medium sized,
growth rate is at
moderate scale &
they adopt
different market
tactics for
development of
their growth of
business.
In context of
larger firms, they
have higher
growth comparing
it with other
entities (Tang,
2018).
From above specified matter, it is examined that these type of organisations are different
from each other & perform their activities accordingly. Through analysis of comparison, it is easier
to understand their characteristics of business. It is important for manager to analyse these
differences through which everything is carried out effectively.

TASK 4
P5 Analyse internal and external analysis of specific organisation to identify strength & weakness
PESTEL analysis is framework which defined as macro environment factor that affect the
business. Its provides knowledge and work force & helps to know about impacts which political,
economical, technological, and governmental. It is time taken tool because it need time to collect
information related to market in context with organisation. It is further explained below-
Political factor- Tesco operates their business worldwide so global factor generally
influence the market of organisation. Which include, tax rates, acts of legislation and also change in
government company facing short problem related in term of monetary & employee. In U.K, due to
impact of Brexit, it affects the firm capability to operate in appropriate way (Benmamoun, 2016).
Economic factor- This factor is major concern for many of companies. In viewpoint of
chosen entity, they are facing problem while change in the policies such as change in taxation
policies which affects their operations in foreign countries. Organisation is totally dependent on the
UK market where it has share up-to 30%. It is crucial to examined & be aware about such policies
so that it is easier to execute activities accordingly (Torvinen, 2016).
Social factor- It encompasses social culture, age, income level, population etc. Consumer
demanded organic food and services. The firm provide it which forwardly increase the flow in
supplies of product in large scale. The customer raises concern like chemical food that formulate
health issue. Due to this approach the firm adapting the new change for organic products.
Technological factor- Technological changes arrives with new opportunity. This comprises
of use of artificial intelligence. Thus, in viewpoint of chosen corporation they grab this and they
have started as they develop and introduce online shopping facilities which allows home delivery.
Formulate self service checkout program which helps in convenience and ease for customer. By this
reduce in labour cost observed. The advancement in field of retail store deals with management of
new department. Further, money investment also included to create new segment cabins for the
online food processing for customer (Bereznoy, 2017).
Environment factor- In this environment concern raises by government with serious node.
Tesco committed and reduce its carbon footprint by 50%. waste product that produces by firm is
stored (Yeung, 2018). Moreover, stored waste discarded gently that follow authority guidelines.
Focusing on such element assist firm to increase goodwill in market at wider level.
Legislative factor- Government & legislative policies also effect performance of
organisation. For example- food retailing commission in 2004 advised a code of practice in the

behalf of customer. The changing in price without noticing or demanding payment from supplier
has been banned. Then selected firm provide customer price reduction on fuel they purchase. They
promoted their product with help of several promotional technique where they indicated the prices
is lowered.
SWOT Analysis
It is framework which is used by entity with aim of analysing & examining internal
capabilities of firm. To use this tool, appropriate market information is needed so that tool is carried
out appropriately. Through using this tool, it is easier to gain competitive advantage as because
improvement in weak & strong areas areas is done at all aspects.
Strength
 Main strength of Tesco is that firm is
located globally & it has strong customer
base (Gligah, 2020).
 Another strength is that as they are
financially strong & on the basis of
which it is easy for them to invest or
expand more in business.
Weakness
 Due to impact of Brexit, it is difficult for
them to operate at global level.
 Also, another weakness is with rise of
changing expectations of customers they
have to change their market strategy.
Opportunity
 In reference with selected entity, they
have opportunity of merging up with
other supermarkets or retailing brands
which gives them easy access to foreign
countries.
Threat
 Due to increase of competition they have
many competitors such as Asda,
Sainsbury, Walmart etc. which can
dominance their market.
Therefore, it is analysed that it is necessary to use both these PESTEL & SWOT framework
which help in carrying out appropriate decision making. Furthermore, both these tools are beneficial
& which leads to better results. Through adopting of these two tools it is easier to make
improvements in business & perform market analysis (Gomes, 2020).
P6 Explain how strength & weakness inter-relate with external macro factors
In context of organisations, macro elements are inter-related with strength & weakness
because these factors occurs both in positive & negative way. So, to achieve better results both
macro factors are carried out by focusing on each strength as well as weakness. So, there inter-
relation with each other is discussed below-

BASIS Strength Weakness
Political factors
In relation with chosen entity,
due to stable political
conditions of U.K they are able
to execute their business
activities in efficient way. It
makes their organisational
structure also strong & effective
(Hiršová, 2018).
In political factors, uncertainties
are tends to arise. It is biggest
weakness because it affects the
political conditions very
frequently.
Economical
In this element, strength is that
inflation rates in home country
is gradually decreasing. Thus, it
is beneficial for firm to take it
as opportunity.
In economy, there are various
changes that occur within
development of economy which
are essential to be considered.
Social
It is macro factor which focuses
on disposable income of
consumers, religion, culture
etc. In reference with selected
entity, they deliver products
after proper consideration of
Due to gradual change of
market trends & people
preferences it might disrupts
the overall processing of Tesco
at deeper scale.
Technological In this type of macro factor, it
comprises of advance use of
software, hardware, etc. It is
biggest strength as company
uses high end security system
which leads to development &
high growth. With rise of
competition, it has become
important to use technology
within entity for advance
development & growth
opportunities.
The biggest weakness is that it
using technology is strength but
it is cost expensive which leads
to disrupting overall financial
resources of firm. Also, to use
technology high level of skilled
employees are required (Lin,
2019).
Environment In this type of macro factor, it The mission & vision of firm

focuses on green agenda,
pollution, climate change etc.
Main strength is that they use
resources efficiently which
leads to protecting of
environment.
might negatively affects the
environmental focused
conditions. Moreover, it is not
possible to use every
environmental practices and
link them with organisational
goals.
Legal It last element of macro factor
in which it comprises of
agreements, contracts, etc. In
viewpoint of entity, legal
department of firm has
appropriate information of all
clients & make assures that
everything is done with all
properly followed rules &
regulations.
In this weakness is that not
following business activities
legally can cause a huge
problem to business. Thus, it
Tesco has obey all legislation of
every country in which they
operate (Mahlangu, 2018).
Therefore, it has been analysed that it is essential to focus on these macro factors so that
decisions making process I carried out in proper way.