Report on TESCO: Macro Environment, SWOT Analysis, and Interrelations

This report provides a comprehensive analysis of TESCO's business environment, focusing on the macro factors impacting its operations and strategic positioning. The report begins with an introduction highlighting the importance of understanding both internal and external factors. It then delves into the positive and negative impacts of the macro environment on TESCO, utilizing the PESTEL analysis framework to examine political, economic, social, technological, environmental, and legal factors. The analysis explores how each factor influences TESCO's business activities, providing insights into the challenges and opportunities it faces. Furthermore, the report presents a SWOT analysis of TESCO, identifying its strengths, weaknesses, opportunities, and threats. The interrelation between the company's strengths and weaknesses with its external macro environment is also explored, providing a holistic view of TESCO's strategic context. The report concludes by summarizing the key findings and implications of the analysis, offering a valuable resource for understanding TESCO's business environment and strategic considerations.

Business and Business
Environment (Part 2)

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
P4. Positive and negative impact of macro environment on business activities of TESCO.......1
P5. SWOT analysis of organisation............................................................................................3
P6. Interrelation of strengths and weaknesses of firm with its external macro environment ....5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In the current time, every organisation focus on to develop and create healthy working
environment within the organisation. Hence, it is sum of the total of all major factors because
these are directly impacts on company. Thus, factors are categorised into two parts such as
internal and external. Apart from this, it is necessary for every organisation to systematically
analyse and evaluate causes with the help of appropriate methods and techniques However,
macro environment of TESCO will be explained as well as their positive and negative impacts.
In the last, SWOT analysis method will be used for examining strengths and weaknesses of
TESCO.
TASK 2
P4. Positive and negative impact of macro environment on business activities of TESCO
Basically, business firm affected by several factors either positively or negatively. Thus,
it is required to effectively evaluate and analyse them with the help of appropriate methods and
techniques. Thus, with the helps to proper evaluation every employee of the company can
effectively perform their operations and tasks and they can attain their goals and objectives in an
impressive style. (Hall, 2011) Thus, PESTEL analysis method can be used for analysing and
identifying major factors or causes of macro environment because they directly effects on
TESCO such as follows:
 Political: At this time, every business firm seeks to be expand their business firm in
several areas at national and international level. Therefore, employers of the firm have
facing several problems and issues while expanding their organisation thus, it is
necessary to effectively analyse and evaluate all major factors because they influence
business activities. Therefore, government of the country regulate and enacts some rules
and regulations which aids to manage and control all over businesses and their
operations. So that TESCO will provides better quality of products and services to
customers and full fill their basic needs in a impressive manner. On the other hand,
political issues sometimes also have negative effects on organisation due to this
employees and employers cannot effectively perform their operations additionally they
feel restricted while working at work place. (Foerstl and et. al., 2010.)
 Economical: Government of the country seeks to be enhance their economy so that their
market share, customer's buying power so more are significantly increased. Economy of
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the nation also effects on business firm thus, before implementing and launching any
products and services in the market place of any nation have to be effectively analyse and
evaluate economic factors in an effective manner. So that employers of the TESCO
company can take appropriate decisions in critical situations. In the context of positive
manner, economic factors are positively effects on export and import system of TESCO.
Apart from this, due to the economy might be affects foreign currency and purchasing
power of customers. Thus, may be decrease sales and revenue of TESCO. (David, 2011)
 Social: In the aspect of social factors, life style, occupation, income level, culture,
income level, ethics, norms, society etc., all these aspects also plays significant role.
Thus, it is necessary to be effectively analyse and evaluate societal factors in a impelling
manner. Therefore, TESCO should be manufacture and provide services to customers as
per their environment. In the positive manner, society aids to maintain and creates
healthy surrounding at the work place due to this, company can implement appropriate
rules and polices in business firm so that staff members can perform their operations. In
the other hand, social factors sometimes negatively impacts on company due to this
TESCO cannot systematically perform their operations.
 Technological: At this time, technology is one of the fastest growing concept thus every
business firm seeks to be adopt and use smart techniques and tools within the organically
so that they can attain their goals and achieve their targets in a effective manner.
Therefore, smart techniques aids to complete works and operations in better quality so
that TESCO can effectively fulfil basic needs of customers as per their demand and
expectations. In the negative way, while selected organisation adopting smart and
advance techniques at work place thus it is not easy to understand their operating function
by all staff members. Due to this, sometimes might be create some accidents with
employees. (López-Gamero, Molina-Azorín and Claver-Cortés, 2011)
 Environmental: In which included climate, surrounding of the areas sometimes all these
aspects are also affects on business firm. Thus, it is required to be effectively and
efficiently examine environmental causes in a impelling way before launching and
establishing any business firm in different areas. In the context of positive manner,
external environment of the company aids to attract high high number of customers due
to this respectively increase profitability and productivity level. Along with this, negative
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aspect of this factor is sometimes due to the surrounding causes customers dopes not like
to purchase products by the TESCO.
 Legal: This is the last term of PESTEL analysis tool, in which concluded legal rules,
regulations, polices of the country which regulated by the government and legal authority
of the country. Thus, it is required to be follow and working should be as per the
legislations and polices of the nation. If any organisation doest not follows legislations
then legal authorities can take action agents that particular business firm. Apart from this,
legal factors aids to manage and reduce illegal activities from the company due to this
consumers can get proper satisfaction towards their needs. In the other hand, due to the
legislations employees of the organisation feel restrict while performing tasks at work
place. (Dahan and et. al., 2010) In this order, it is required to be effectively analyse all
major factors of the business firm because due to this company can be enhance their
profitability and productivity level.
P5. SWOT analysis of organisation
TESCO is UK's one of the top retail company with its origin dating back to 98 years ago.
At present it has approx 6550 store with around 476000 employees working with it. Hence to
maintain its market position and to further expand it a detailed study of SWOT analysis of
TESCO is performed. (Reinhardt and Stavins, 2010)
SWOT is an abbreviation that stands for, S-Strength, W- Weakness, O-Opportunities and
T- Threat. SWOT study is a detailed understanding of your companies stability and durability,
flaws, options available to grow and all dangers that the business is facing. Strength and
weakness are seen inside the organisation and can be changed over a period of time by exploring
new markets, where as opportunities and threats are outside the company and just like the
environment every company have to face it. Apart from this, there are using SWOT analysis
method for identifying and analysing strengths and weaknesses of the TESCO can in a effective
and efficient manner. So that with the help of this can significantly examine the actual status and
position of the business firm. (Li, Lai and Wang, 2010)
Strength:
 TESCO is a leading retailer in Europe and America,with an increase of 433 store from
the year 2012.
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 It is famous for its quality products, extensive variety, customer service and value for
money. For it customer comes first.
 Being a customer centric it has launched local stores like TESCO Metro and TESCO
Express in the area of residence to enhance easy and convenient shopping experience.
Hence it has also opened restaurant along with some of its super market.
 It has a relatively high market share in Europe, America and Asian countries like
Thailand and Malaysia. Hence it enjoys a high amount of Goodwill.
 TESCO has also recently launched online grocery store thus targeting a large number of
customers and giving a strong competition to its competitors. It is much ahead in
technology than its rivals. (Al-Swidi and Al-Hosam, 2012)
Weakness:
 It has become a major organisation dealing in books, food, clothing, electronics,
furniture, finance etc. but certain bad debts have badly affected the company's sales and
revenue.
 Being 80% of its income from UK markets its greatly dependent on UK's economy. A
slight change in its buying power will have adverse effects on its sales and revenue.
Opportunities:
 It has a great scope of growth by entering into Asian and Australian market and to other
parts of the world. (Lee, Olson and Trimi, 2012)
 It has launched its own tablet and smartphone range giving competition even in
electronics market.
 In the countries where it’s not physically operating it can start selling through online
stores.
 Mergers and acquisition through tie ups.
Threats:
 Severe threat of recession in the UK market where the company operates maximum of its
operation.
 Threat of other big US brands entering the retail market of UK. In this situation TESCO
sales will be greatly affected and also its profitability as it offers products on low margin
basis. (Welter and Smallbone, 2011)
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 Change in government strategies, taxes, trade barriers, labour laws and cost will lead to
increased operational cost and thus further reducing the already low profit margin and
making it difficult for the company to survive.
P6. Interrelation of strengths and weaknesses of firm with its external macro environment
As per above used SWOT analysis tool for analysing and evaluating strengths and
weaknesses of the TESCO. Thus, all these aspects are co-related with macro factors of the
business firm. Due to this, it is required to be systematically analyse and evaluate macro factors
and should be linked with SWOT analysis technique in a impelling manner. With the help of
this, employers of the firm can effectively take appropriate decisions and resolve problems and
issues of the company. (Teece, 2012)
 Strengths: As per above define TESCO is one of the leading and largest retail super
market of UK. Thus, it has some strengths which affected by macro environment factors
either positive or negative manner. Therefore, it is necessary to be effectively analyse all
major causes with the help of appropriate techniques and methods. One of the major
strength of TESCO is it has world wide presence of market at different areas additionally
it using different type of multi formate strategies at the work place. Its strengths affected
by macro factors. Hence, economical condition of the country respectively chances
because it depends on market condition and customer's demand. Thus, it is necessary to
be properly analyse and evaluate economic condition of nation before launching and
establishing firm at several areas of the country.(Fatoki and Smit, 2011)
 Weaknesses: TESCO also has some weaknesses due to this it cannot effectively operate
their business firm as well as cannot provide better services and facilities to their
customers. For example: Recently it affects by controversies thus its brand image and
sales affects also it has huge debt of fund. Therefore, weaknesses of the company affected
by macro environment factors because environmental and social issues are affected on
TESCO in the negative way.
 Opportunities: TESCO seeks to be enter in new emerging markets due to this, it wants
to be adopt and use advance and digital technologies at work place so that tit can
effective produce and provide better services to customers. Therefore, opportunities of
TESCO affected by technological factors because at this time technology is one of the
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fastest growing concept thus, every business firm seeks to be use smart techniques.
(WirtzSchilke and Ullrich, 2010)
 Threats: At this regularly increasing cost of food and non-food raw materials. Thus, it is
one of the major threat for TESCO due to this, its sales and revenue respectively
decreased. Additionally, enhance major competitions between retail markets. Apart from
this, threats of the company affected by environmental and economic factors because all
these causes depends upon market condition of the country. In the other hand, it is
necessary to be effectively analyse and evaluate all these factors in a systematic way so
that company can get success and achieve their goals and objectives. (Avramenko, 2012)
CONCLUSION
From the above mentioned report it has been concluded that business environment of the
company should be effective in nature. Along with this, has been using PESTEL and SWOT
analysis tools for analysing and measuring the macro factors and strengths of the TESCO
respectively. However, with the help of them can effectively has been examined the actual
position and status of the company at outside market place. In the last, strengths and weaknesses
of the selected organisation has been co-related with all macro environment factors.
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REFERENCES
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