Analysis of Tesco and Arcadia Group in Business Environment Report

This report provides a comprehensive analysis of Tesco and Arcadia Group, focusing on their business environments, organizational structures, and operational functions. The report begins by defining key terms such as 'business' and 'business environment,' then classifies organizations into public, private, and voluntary sectors, using Tesco and Arcadia Group as examples. It examines the size, objectives, and legal structures of these organizations, highlighting differences in their market shares, growth patterns, and sustainability efforts. The report further details the relationships between various organizational functions like marketing, finance, human resources, and production within Tesco, emphasizing the interconnectedness of these departments and the impact of organizational structure. The report concludes by summarizing key findings and referencing relevant sources.

Business and Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
L O 1................................................................................................................................................3
P1) Types and objectives of organizations. ................................................................................3
P2) Size and importance of different types of organizations......................................................4
L O 2................................................................................................................................................5
P3) Relationship between various functions of the organization................................................5
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business refers to the activity of producing goods or services and sell them with the aim
of earning profits. Business environment refers to the combination of different types of internal
factors that exists in internal environment and external factors that exists in external environment
(Andersson, Forsgren, M. and Holm, 2015). Example- needs of customers, technological
changes, government, economic changes etc. that may impact the business. The Report will be
based on Tesco. Tesco was founded in year 1919 by Jack Cohen. The company belongs to Retail
industry. The headquarter of Tesco is located in England, UK. Company offers various products
through supermarkets, convenience shops, hypermarkets etc. Tesco is currently operating approx
6800 shops across UK, Thailand, Poland etc. The Report will outline various types and purpose
of the organizations, size and importance of different types of organizations. It will also describe
the relationship between various functions of the organization.
TASK 1
L O 1
P1) Types and objectives of organizations.
Public -
Public organizations are operated in public sector of the country. These organizations are
under the control of Government. There are various forms of public organizations such as –
Enterprises owned by state etc. One of the common example of public organization in Retail
sector is Tesco.
Objective - Main objective of public sector organizations is not to earn profits but the main aim
is to provide services to the people of the country.
Legal structure- Tesco is a public limited company and its shares are owned by the shareholders
who has provided funds for the operations of the organization (Bah, E.H. and Fang, 2015).
Private - Private sector organizations are those companies that are not controlled by the
Government. Companies that belongs to private sector are operate by individuals. One of the
example of private organization is Arcadia Group.
Objective –

Main objective behind operating the business is to earn maximum profits by increasing the sale
of products or services through innovative products or services, reducing the cost of production
etc. The efforts of key persons of the organization also impacts the profitability of the company.
Legal structure -
Arcadia Group is a Private Limited Company because, majority of shares were own by Taveta
Investments, Tina Green etc.
Voluntary- Voluntary organization are also known as voluntary group. These organization are
formed by group of peoples by entering into a contract. Example of voluntary organization are –
professional associations, trade associations etc. One of the common example of voluntary
organization is Oxfam.
Objective- Group of individuals enter into the agreement to form an organization for achieving a
common objective. One of the main objective behind forming a voluntary group are related with
welfare and development (Burstein, 2019). For example - To promote the welfare of the society,
working for economic development of the country etc.
Legal structure – Oxfam is own by various trustees. The trustees of Oxfam are responsible for
the activities, assets and charity of the organization. It is a non profit limited liability
organization. Trustees are being appointed by the people that make donations. Trustees are
appointed in Oxfam due to their advance skills of managing the charity of the organization.
P2) Size and importance of different types of organizations.
Size -
Tesco is a large size retail organization that deals in various types of products that are
offered through supermarkets, convenience shops etc. It operates the business in different
countries like UK, Thailand etc. It is a multinational organization because it operates more than
6800 stores in different nations (Camillus, 2016).
Arcadia Group is also a large size organization because, it operates its business at more than 48
locations through approximately 2500 stores across UK. Such as Selfridge etc.
Objectives -
One of the major objective of Tesco is to become top company in Retail sector of UK by
providing high quality of products at low cost to the customers.
One of the main objective of Arcadia Group is to offer right type of products to the buyers in
domestic as well as at international markets.

Organizational structure -
The type of organizational structure followed by Tesco is Functional organization
structure . So that, it can perform the various types of function in effective manner.
The type of organization structure followed by Arcadia Group is Hierarchialorganizational
structure in which the functions of the company are divided in various divisions.
Market share -
Current market share of Tesco in year 2018 is 27.4% (Hamilton, L. and Webster, 2018).
The market share of the company is lower as compared to other companies such as Aldi.
The market share of Arcadia Group has decline in year 2018 and current market share of the
company retail sector of UK is 3.8%.
Growth -
Tesco has shown the growth in the sales in seven years due to the acquisition of Booker
and carry group. The sales of the company has increased by 3.5% in UK in year 2018.
The sales level of Arcadia Group in UK that owns brands such as Topman, Top-shop etc. has
decline 5.6% up-to £1.9 billion (Chang, 2016).
Sustainability -
Tesco has develop various short term plans for developing and offering products to the
customers in sustainable way. It is also making efforts for addressing the challenges related with
sustainability in supply chain.
Arcadia Group has taken various steps for promoting sustainable utilization of the resources.
Such as the group has develop products by offering various solutions for the quality. The
products are complying LEED so that, it will not create negative impact on the environment
(Islam, F.R. and Mamun, 2017).
L O 2
P3) Relationship between various functions of the organization.
There are various functions that are to be performed by an organization so that, it can
develop and offer various types of products or services to the targeted segment of customers. So
that, sales and profits of the company will increase. There are various functions that are
performed in Tesco and all these functions are interrelated with each other. These are as follows
-

Marketing -
Marketing refers to the function of marketing the goods or services of the company.
Marketing Department of Tesco is responsible for using various tools for marketing of products
so that, sales of the firm will improve (Charter, 2017). Marketing Manager will require various
information for marketing of goods and these information are provided by other departments of
the firm such as finance, sales department etc. Finance department will provide information
regarding budget to marketing department.
Finance -
Finance department of Tesco is responsible for performing various functions related with
finance such as developing budgets, acquiring funds from various sources like financial
institutions etc. Production department helps finance department in determining the requirement
of funds for producing and selling goods.
Human Resource -
Human Resource Department of Tesco is responsible for managing the human resource
of the company by performing various managerial functions. Other departments helps Human
Resource Manager by providing information regarding the vacant job positions in various
departments (Fineman, 2017).
Production -
Production department of the company is responsible for producing goods and services to
fulfil the demands of targeted customers. Marketing department provides information in respect
of the change in taste of buyers, purchase department of Tesco helps in buying raw material so
that, production department can produce the products.
Organizational Structure –
It refers to a system that defines how different activities will be performed in the
organization, it helps to identify various tasks to be allocate, to whom the report will be provided
etc.
Functional organization structure –
Under this, the company is divided into different groups and each group is based on
certain type of function such as Human Resource, finance, production etc. The reporting
relationship is based on different departments. Tesco is following functional organization
structure (Erasmus, Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016).

Organization structure of Tesco and various functions of different departments influences
each other. Different functions such as Marketing, Human Resource are divided in separate
division. And staff working in these departments are accountable towards department manager.
There are various advantage of functional organization structure for Tesco such as it provides a
clear line of authority, helps employees to focus on their particular mission.
Figure 1 : Functional organization structure
Source : (Functional organization structure , 2017)

TASK 2
LO 3 & L O 4 (covered in ppt.)

CONCLUSION
The Report has outlined the term business and business environment. The Report has also
described that public organizations operates under the control of government for welfare of
society, private organizations are operated with the aim of maximizing profits and voluntary
organizations works for development and benefits of society. Further, the Report has explained
that Tesco and Arcadia are multinational organizations whereas, Oxfam a non- profit limited
liability organization. Moreover, the Report has explained the difference between Arcadia Group
and Tesco on the basis of organization structures they are following, level of growth of the firms
from past years, market share of both the companies and sustainability activities that companies
are performing. The Report has also outlined various functions of Tesco such as production,
marketing, human resource, finance etc. that helps to achieve the objectives of the firm in
effective manner. The Report has also described that al the functional department collaborates
each other while performing their functions and organization structure is dependent upon the
various functions of the organization.

REFERENCES
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Burstein, P., 2019. The influence of organizations on policy: theories, findings,
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Camillus, J.C., 2016. The wicked challenge of the business environment. International Journal
of Business Environment. 8(1). pp.19-31.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
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Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Fineman, S., 2017. The business of greening. Routledge.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
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Islam, F.R. and Mamun, K.A., 2017. Possibilities and Challenges of Implementing Renewable
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Online-
Functional organization structure . 2017. [Online] Available Through :
<https://www.tutorialspoint.com/management_principles/management_principles_organizational
_structure.htm>