Analysis of Tesco's Business Environment Factors and Impacts

This report provides a comprehensive analysis of Tesco's business environment. It begins with an introduction to the concept of the business environment and its impact on organizations, followed by an overview of different organizational types: public, private (specifically Tesco), and voluntary sectors, outlining their purposes, missions, visions, and legal structures. The report further examines the size and scope of these organizations. It then delves into the relationships between various organizational functions such as human resources, marketing, finance, and IT, and how these functions contribute to organizational objectives and structure. The report also explores the positive and negative impacts of macro-environmental factors, such as political, economic, social, technological, legal, and environmental factors (PESTLE analysis), on Tesco's structure and operations. Finally, the report conducts an internal and external analysis of Tesco using SWOT analysis, identifying its strengths, weaknesses, opportunities, and threats and explaining how these factors interrelate with external macro factors. The report concludes with references to relevant academic sources.

Business environment

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
PART 1............................................................................................................................................4
TASK 1............................................................................................................................................4
P1 Various type of organisation with their different purpose like public, private and voluntary.
.....................................................................................................................................................4
P2 Size and scope of different kinds of business organisations..................................................6
TASK 2............................................................................................................................................7
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................7
PART 2............................................................................................................................................8
TASK 3............................................................................................................................................8
P4 Positive and negative impacts of macro environmental factors that affects the organisations
structure.......................................................................................................................................8
TASK 4............................................................................................................................................9
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................9
P6 Explain how strengths and weaknesses interrelate with external macro factors.................10
REFRENCES.................................................................................................................................12
Books and Journal.....................................................................................................................12

INTRODUCTION
Business environment is a overview of business factors which it is surrounded by.
Business is affected by its overall surrounding by its internal and external factors. These factors
includes all the functions of business which it performs into its overall operation life. It reflects
their products, employees, investors, shareholders and government influence. These factors
affects an organisation as per its size, scope and structures. This report is going to analyse about
these factors relating to Tesco (Asongu, and Odhiambo, 2019). The world's largest
supermarket chain dealing with grocery and other household products into UK market. There are
various organisational functions which are link with each other and how they work together in
order to achieve organisational objective.
MAIN BODY
PART 1
TASK 1
P1 Various type of organisation with their different purpose like public, private and voluntary.
The organisation has its mainly three kinds, which has their own norms, regulations, and
aspect for their performance. In order to analyse different factors which has its impact on their
operations, there is need to identify the criteria behind all these three sectors.
Public sector organisation:
Public companies are those which are operated and owned by government bodies.
Government public organisations are establish to provide free or minimum amount of product or
service to general public. NHS organisation is taken for this purpose who provide health care
facilities in UK.
Purpose: NHS main purpose is to render essential services to general public like medication,
health treatment with minimum or free of cost.

Mission: Mission established is to render regular health facilities at people convenience.
Vision: The vision is to maintain proper care and concern towards their patients (Bahoo, Alon,
and Paltrinieri, 2020).
Legal structures:
Central Government: The main functions regarding financial criteria is managed by
central government of UK. The influenced on all its operations.
State Government: This government enables their influence on their perspective state on
their business operations and functioning.
Local Government: This government focus on the operations of local area on mainly
small business.
Private sector organisations:
These organisations has their separate functioning and operations which are performed by
private individuals with no government influence. These organisation has their motive to run
with profit satisfaction. Tesco is the largest leading private body which has expanded its
operation at global level (Hansell, and Rafi, 2018).
Purpose: The organisation is running for the purpose of quality products and high profit
maximisation.
Mission: Mission is to gain customer trust for before and after rendering services.
Vision: Vision is to gather and reach to all the areas into the world so that they could make the
organisation brand name for decades.
Legal structures:
Sole Proprietorship: The owner is the only one liable to manage the business by taking
losses and profits into their full consideration. They only decide what to do and how to do.
Partnership: This structure defines two or more members influence in order to run a
business with mutual understanding and decisions and equal rights over profits and losses of the
business.
Companies- This structure organisation is incorporated under companies Act 2013. these
companies are said to be private and public Ltd company.
Voluntary organisations:

These organisation are established to run for society concern and their hospitality so that
the economy would be grow with positive energy amongst people. Oxfam is evaluating these
services in order to welfare of society (Kim, Kim, and Jeon, 2018).
Purpose: These organisations have profit free functioning mainly for welfare of needed people.
Mission: Mission is established to alleviation or poverty from the economy by providing them
with free goods and services.
Vision: It has its vision towards economy employment opportunities, free education, literacy into
the economy for its development.
Legal structures:
Unincorporated Association:Trust- These organisation are totally into welfare of society
and put their maximum efforts to provide free services without gaining any profit.
Trust- These organisations are established for serving donations so that people could get
there basic necessity (Nam, Lee, and Lee, 2019).
P2 Size and scope of different kinds of business organisations.
Business are established to make their effective presence into market, in that order they
provide something new to the market in terms of products and services. They perform their
operations as per their size and scope through which it is affected by many factors. These are
mentioned below:
Public sector organisations: NHS is founded in 1948 in UK territories. It is specialised in
rendering health care facilities in all the departments of medication. It is fully managed and
controlled by government regulations and has total power in the hands of government.
Size: NHS has its large size into UK, also has large operations as it engage many
professional expertise and staff into their organisation around 1.2 million. They have their
operations into southern and northern Ireland.
Scope: As far as concerned about their large operations, it has its opportunities to operate
on national and international level. They provide their satisfactory services to approx I million
people.
Private sector organisations: Tesco is the leading grocery and household supermarket with the
aim to earn profit at full extent, with prioritise aim of demand of their customers. Along with
this, it also scattered their operations into Tesco bank, Tesco mobile and other essential
requirement of customers.

Size: Tesco has its stores in count of 6180 into whole UK with the numerous employees
contribution of approx 450000. Their business is at peak of revenue over £63.911 billion.
Scope: It has its worldwide approach into national and international market due to its
wide range of products and services. It offers products like dining, house equipment money
transfer and other financial services.
Voluntary organisations: Oxfam is the most popular charitable organisation into UK market.
Which was established in 1942. they work selflessly towards society contribution.
Size: These organisation are mostly operated into narrow sectors which its small operations but
huge targets. They have less number of employees but highly expertise and dedicated in number
of 10000 employee.
Scope: It has their scope into global market because of the efficient services in regrading
education, health, food and other necessity for a human. They have around 45 stores with more
than 1 million employees (Shaughnessy, 2016).
TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
An organisation is performing under several functions which describe their prosperity
and motive towards market and its customer. These functions has their connection with each
other because of the fact that it is diversified with enormous activity. All these functions are in
hand with employees and mangers of the organisation. It is described below:
Human resource and marketing: This function has its reliability into organisation as
human are the main part and an efficient resource of an organisation which is the doer for all
the activities. Meanwhile, marketing function is also perform by effective individuals who
promote their products and grab customer attraction this shows its interconnections into
business goals. Tesco has efficient workforce for which they maintain their welfare and promotes
employee development.
Finance and Information & Technology: These two functions are the most effective one.
As one is essential for taking decisions regarding budgets and money flow within the
organisation. Another one is to initiate innovative features into products and services. These

functions are inter conned I respect with Tesco, technical department takes opinion regarding
budgets tio invent new techniques and choose the most efficient one.
PART 2
TASK 3
P4 Positive and negative impacts of macro environmental factors that affects the organisations
structure.
Large business organisations are affected by large factors which considers Macro
components. These components are necessary to evaluate in order to get organisations
consequences. This could be analyse through the effective framework of Pestle analysis. There
are mentioned below:
PESTLE analysis of TESCO
Political factor- This external factor impact on Tesco productivity and revenue by
impact of political amendments into economy in terms of their policies, custom duties, import
and exports and etc. through these changes Tesco being unable to expand its operations into
dynamic conditions and government influence.
Economical factor: This factors creates power on economic aspect which immensely
interpretable with demand and supply, monetary fluctuations and money flow into the economy.
Tesco needs to acquire good policies and strategies so that it could continue serve sufficient
goods and make economy and customer satisfied. These factor being a cause regarding rates of
funding with increase their selling cost and make the product expensive which is not feasible for
customers (Shengelia, 2017).
Social Factors: This factor involve sense of belongingness towards society well being.
Which promotes customers standard and their health concerns at the top of their priorities. In
that respect Tesco being informative and produce healthy an good quality products which suits to
every class of customer by using organic and natural raw material in their production. which
impact on positive sustainability of the organisation.
Technological factor: These factors makes an organisation aware of market
technologies whether it is existing or new. At some moment, organisation need to adopt changes
as per dynamic market rends and customs. These factor create positive and negative impact on

organisation competency. Tesco develop timely change into technologies in their product and
management process due to which it is able to stand into large market.
Legal factor- Under this factor, government create their impact on business by abolish
their laws and regulation over their operations. Which make them entitled to play fair practices
regarding employee remuneration, compensation as per Employment Act 1998. Tesco provide
minimum wage and salary to all their employee as well as compensation will be rewarded as per
their performance (Sroka, and Szántó, 2018).
Environmental Factor- Looking forward to environment crises in terms of pollution,
afforestation, global warming and other factors which can casue harm to environment. An
organisation has to perform by keeping in mind Eco-friendly environment. Tesco use Eco-
friendly mechanism and cooler control systems for environment well being which does not
impact on humans, animals or any creatures on planet.
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
An organisation deals with various internal factors which become a drawback for
organisation growth and expansion. Due to which it could not perform effectively in terms of
managing employees, being effective in production and various other factors. Swot analysis is
the best tool to find out what organisation has its best strength and weakness and how it deals
with opportunities and threats. Here is SWOT of Tesco:
Strengths Weaknesses
 Tesco has its strength over their
specialised employees which helps in
making their product strategies which
enables their high quality services and
customer satisfaction.
 It has its popular fan base due to its
brand name and superior power into
market.
 Many of the assets into Tesco are not
giving best outcomes and taking
unnecessary cost and maintenance
expense which results in less amount of
profit.
 Their suppliers are mainly based on UK
and Europe territory which does not
supply into other unions. This creates

impact on its operations into their
diversification.
Opportunities
 Retail industry has many opportunities
in terms of raw material conversion,
large market demand of good quality
products because of severe health co
concerns (Sun, and Smith, 2018).
 The company could utilise available
technologies and internal resources to
their global outlets by promoting them
to different locations.
Threats
 The company and the retail industry
facing competitive challenges into
marketplace due to similarity in
products and ranges.
 Another threat of Tesco is continuously
flexible changes in demands which
makes their supply inappropriate and
remaining of stock.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
This area of analyses shows the interrelation of company strength and weakness with the
external factors. How these factors together create heavy impact on organisation growth.
Political factors: Due to the companies private structure it has less control over political
aspects which impact on companies performance and profitability. Taxations policies creates
impact on Tesco strength. As it could become a hurdle in between political relations of the
company. Heavy taxations and stop of import and export eventually affects the profits by which
employees will not get extra benefits (Vij, and Bedi, 2016).
Economical factors: This factor is being a strength for the Tesco operations. As the
company maintaining all the economic aspect by rendering sufficient amount of supply as per the
demands of consumers and maintain a balance between UK monetary policies and level of
inflation into the country. It positively affects on their bearing and take the organisation to the
success by being economical concern and putting efforts towards balancing and morality.
Social factors: Tesco has concerning about all the social factors into the country by
maintaining standards of customers and with the view to provide healthy products. This has the
biggest strength of the company and make the products consumers first choice compared to other

firms. Through this company has overcome its threats of competitive rivalry and set a well
maintained image for customer satisfaction.
Technological factors: It has the biggest power of Tesco as the employees are much
aware about upcoming technologies which make them ready to formulate strategies predication
for any crises and future uncertainties. This has impact on more of consumer attraction towards
companies innovative products and after sale services. They has large technologies to maintain
their supermarket by setting digital payment methods, store delivery services, credit card scores
and much more.
Legal factors: This factor is creating influence on companies norms and criteria of
working. Which is valuable for employee well and equality. Tesco maintain all the laws and
legal regulation in a good manner by paying enough salary to their workforce as well as leave
payments, retirement pensions, holiday compensation which are in the Employment Act. These
are the opportunities for Tesco through which it could maintain its good position among society
as well as employee engagement.
Environmental factors: Tesco has been using various sustainable aspect to make the
environment positive and healthy in terms of less wastage, moderate consumption of energy and
other natural resources. Work on recycling and polluted free packaging. This has created a
positive growth in environmental well-being of Tesco which makes it as a environmental
friendly operations (Zizlavsky, 2016).
CONCLUSION
The facts which has been cover in this report about business environment are the most
essential for an organisation in order to run, operate and managing new or existing business.
Business operations is highly affected by its size and structure which bound its area of
contradiction and expansion into the economy. Along with this, various internal and external
factor impacted on business well being which has necessity to get analysed at the eight time
before the organisation causes situation of loss. This has been also analysed that these internal
functions are closely interrelated with macro external factor so that not weak areas would left to
work on.

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