Business Environment Analysis of Tesco Plc: A Case Study

Desklib provides past papers and solved assignments for students. This report analyzes Tesco's business environment and strategies.

Running Header: Context of Business
Context of Business
NAME AND STUDENT ID:
NAME CODE:
UNIT:
CAMPUS:
TERM AND YEAR:
TUTOR:

Context of Business
Table of Contents
Assignment 1..............................................................................................................................2
Introduction............................................................................................................................2
Changes in the Business Environment...................................................................................2
CSR and Ethics in a Business................................................................................................3
Conclusion..............................................................................................................................5
Assignment 2..............................................................................................................................6
Introduction............................................................................................................................6
A brief history and summary of the business you have selected and the rationale for your
choice.....................................................................................................................................7
According to your research, discuss their vision, leadership style and management
practices and the various strategies making use of various theories you have studied as
evidence..................................................................................................................................8
..................................................................................................................................................10
Analyze how the above have been achieved or implemented by your selected company
with specific examples.........................................................................................................11
What could be your recommendations as an improvement.................................................11
Conclusion............................................................................................................................13
References............................................................................................................................14
1

Context of Business
Assignment 1
Introduction
Change is a normal as well as the most essential part of any business that helps in improving
the performance of the employees; enhance the goods, services, and helps in expanding the
business (Indris and Primiana 2015). Change can be considered as an exciting opportunity as
well as the source of threat and disruption, all of which depends on the type of impact of
changes brought into the business. These changes are required to be adhered to and
maintained by the ethics and following the Corporate Social Responsibility (CSR). In today’s
dynamic business environment, it is the most essential for an organization to remain
competitive in its industry of operation by adopting strategic models and tactics.
Changes in the Business Environment
In my opinion, every business organization is a part of the business environment in which it
is operating, which is again classified as the micro and macro environment. The former is
affecting the working structure and procedures of a particular business, whereas the later
affects the functioning of all the business entities that are operating in the same industry. The
microenvironment is the collection of all the forces that are close to the firm and affects is
operation and performance directly. In my perspective, the main elements of the forces are
the suppliers, competitors, intermediaries in the market, the customers as well as the firm
itself (Kamunge, Njeru and Tirimba 2014). Macro environment consists of the general
environment that is present in an economy that influences the working, decision-making,
strategy and performance of all the businesses present within the economy. It consists of the
most powerful forces that are not under the control of the business and yet have a lot of
impact over it. The study of this environment is the PESTLE analysis and consider both
economic and non-economic factors such as the policies of the government, size of the
2

Context of Business
population, inflation, GDP, ethnic mix, culture, political conditions and the taxes and duties
that re-imposed (Hillary 2017).
As per my knowledge, the micro and the macro environments have a significant impact on
the success of the marketing campaigns and therefore affect the whole business. The factors
of the environments need to be considered in depth while the organization is involved in the
decision-making processes of a strategic marketer. I feel that consideration of these factors
will be helpful in improving the success of the marketing campaign of the organization as
well as the long-term brand reputation. The contemporary environment of consumption is
highly characterized by the advancements in the technology, the requirement for hyper-
connectivity through social media as well as a wide variety of goods and services. In the past,
consumers had very limited choices and had to consume whatever was available in the
market place in the society that was production-driven (Young et al.2015).
In the present society, the highly fragmented market for the consumer is presenting several
challenges for the corporations. With the changes that are brought about in the business
environments, there have been various changes in the business operations and the current
market. The businesses have been introducing new and superior methods of production,
changed the ways in competing with the other businesses in the same economy, extended
their target markets and have found new and innovative ways in attracting and retaining their
employees. Besides most of the business operating globally have introduced the most recent
models and strategies and have adopted the most suitable decision making processes
(Kennedy 2016).
CSR and Ethics in a Business
The theory of Corporate Social Responsibility of the CSR has been built on a system of
ethical behaviour in which the actions and the decisions need to be validated ethically before
3

Context of Business
implementation (Palihawadana, Oghazi and Liu 2016). When the actions and decisions
implemented to certain factor causes harm to the society or the environment of the business,
the action is considered to be unethical in nature and socially irresponsible as well. I feel that
the moral values that are inherent in society help in creating a distinction between the right
and the wrong. In this way, most of the organizations are of the belief that social fairness to
be the “right”, but more frequently, it has been found that this “fairness” is absent. The theory
of CSR and the ethics applies in both the group and individual capacities and needs to be
incorporated into daily actions and decisions, particularly those that have an effect on others
as well as on the environment (Spence 2016). Businesses have developed a system of CSR
that is tailored to the environment of the company. With the maintenance of CSR, the
employees, as well as the environment, are considered to be equal to the economies of the
company. Maintaining the CSR within a company ensures the integrity of society and the
environment are protected.
I have often noted that the ethical implications of a decision and actions are overlooked for
personal gaining and the materials often benefits. This helps in the manifestation of itself in
companies that have attempted to cheat the regulations meant for protection of the
environment. When this happens, the interference of the government is required. In simple
words, I feel that ethics involves learning, distinguishing what is right and wrong, and the
concept of business ethics has come to mean various things to different people. In the words
of Sheehy (2015) attention towards business ethics is the most critical when there are
fundamental changes in the organization. Earlier the values were taken for granted in the
times Palihawadana, D., Oghazi, P. and Liu of fundamental changes and presently these
values are questioned. Even there are circumstances when most of the values are not even
followed. Consequently, there are no clear moral laws that help in guiding the leaders through
4

Context of Business
complex dilemmas regarding the right and the wrong actions. Attention towards the ethics in
a workplace helps in sensitizing the leaders and the staffs in the ways they need to act.
Conclusion
Change is the most common and vital in every aspect and the businesses are not exempted
from it. In the present society, the highly fragmented market for the consumer is presenting
several challenges for the corporations. The macro and the microenvironments in which
businesses operate have a great impact on the operations and decision-making levels.
Organizations manage ethics in their workplaces through the establishment of ethics
management programs. Typically, these convey the corporate values that often use the codes
and policies that guide decisions and products and sometimes include extensive training and
evaluation.
5

Context of Business
Assignment 2
Introduction
This report gives a detailed idea of the context of business and its other aspects. The
organization that has been chosen for the completion of the assignment is Tesco Plc. In the
first part of the report, brief summary and history of the organization have been discussed
followed by the organization’s vision, leadership styles, management initiatives and others.
The next part of the assignment consists of examples of the different management styles
implemented by the organization in their business. The last part of the report consists of a
recommendation for better performance.
6

Context of Business
A brief history and summary of the business you have selected and the rationale for
your choice.
Tesco is known to be a British multination retail organization dealing in groceries and general
merchandises. The organization is headquartered in Welwyn, Garden city, Hertfordshire,
United Kingdom. Tesco is considered to be the third largest retail company in the world in
terms of gross revenue. It is also the ninth largest retail company in the world in terms of
revenue. Tesco is known to have shops in seven countries of Asia and Europe. The
organization is also the largest retailer in the UK market with a hold of a market share of
28.4%.
Tesco was founded by Jack Cohen in the year 1919. At the initial stage, Tesco was opened as
a group of market stalls. The name ‘Tesco’ came into existence for the first time in the year
1924 after Jack Cohen purchased shipment from a company named T.E Stockwell and
combined the initials with the first two letters of his surname. The first Tesco shop was
opened in the year 1931 in Burnt Oak, Barnet. The business became successful in very less
time and in 8 years Tesco had over 100 shops around the country.
Tesco’s global expansion started in the early 1990s. During that period of time, Tesco had
operations in 11 countries around the world. From the year 1960, the organization has
diversified itself into the selling of books, electronics, clothing, furniture, software, toys,
telecom, petrol, internet and financial services. In the year 1990 Tesco decided to reposition
itself to the organization offering products at low costs from down market high volume low-
cost retailer. This initiative of Tesco has changed their fortune as they successfully increased
their sales in and expanded with opening 2500 shops in the next 15 years.
Tesco is also known to be listed on the London Stock Exchange and has a market
capitalization of about £18.1 billion as recorded in the year 2015. It is also considered as the
7

Context of Business
28th largest company in the primary listing of the London Stock Exchange. Tesco’s expansion
strategy in the international market has also worked wonders. It is currently present in 11
countries around the world. The country has pulled out from the USA in the year 2013 but
recently it is doing very well in other countries around the globe. The organization has opted
for a joint venture strategy to expand in the international market keeping local expectations in
mind.
Tesco Plc. has been chosen for the assignment as it is one of the renowned retailing
companies in the UK. Tesco in its journey to become successful has been through turmoils
which makes it a good subject to study. The strategies that the organization has applied in
their journey are also interesting and can be studied in order to learn. Tesco overall becomes
a great subject for the assignment and increases the opportunity to study about the
organization.
According to your research, discuss their vision, leadership style and management
practices and the various strategies making use of various theories you have studied as
evidence.
Tesco Plc. is the largest retailer in the world with its main business in the UK that has 60% of
sales and profit. The vision of Tesco has five elements which aptly describes the organization
that it wants to grow into. The first vision of Tesco is wanted and needed around the world.
Tesco as an organization wants to be needed around the world for its products and services.
The second element of their vision is growing business that has full of opportunities. They
want to grow into a business that has lots of opportunities. The third element of Tesco’s
vision is modern and innovative ideas. They bring innovative ideas and implement
periodically for the customers to get attracted. Another vision element of Tesco is to be
winners in the local market and apply skills in the global market making them profitable both
8

Context of Business
in the local and international market. The last element of vision of Tesco is an inspiration,
earning loyalty and trust from customers, communities and colleagues.
It is evident from the success of Tesco in the UK market as well as in the international market
that the organization has the best and effective management with quality leaders (Samantara
and Sharma, 2015). A leader has to be effective in order to make the organization achieve its
goal and objectives. Jack Cohen is believed to be a leader Authoritarian leader who knows
what needs to be done, when it needs to be done and how it needs to be done. These are the
values he likes to see in the managers of the organizations. An individual leading from the
front must be clear about what he wants from his team. This attitude of Jack Cohen has made
the organization successful. John Allan the Non-Executive Chairman and Dave Lewis the
Group chief executive officer have also followed the paths shown by Jack Cohen. They have
taken the huge responsibility to establish Tesco in the global market with their innovative
strategies. Innovation is one of the most important qualities of a leader. Without innovation, it
has become difficult to survive in the market of high competition.
The management practices of Tesco are known to be effective and serve the purpose of the
organization. The organization uses some innovative management practices that keep them
ahead of its competitors. One of such practices is known as the steering wheel strategy. The
steering when strategy covers basic objectives of the organization including, finance, people,
customers, operations, community and customers (Evans and Mason, 2018).
9

Context of Business
Steering Wheel
Strategy
(Source: Lakshmi and Rao, 2017)
Corporate Social Responsibility initiatives of Tesco are also considered to make Tesco
successful. With the help of the management, Tesco plans different and unique corporate
social responsibility initiatives that help the organization in various ways (Jones and Comfort,
2018).
Tesco’s supply chain management is one of a kind where thy gain competitive advantage.
Supply chain management is known to be a management concept the helps an organization in
the integration of the supply chain process. Supply chain management consists of distribution
management, supplier management, inventory management, payment management and
channel management (Gandhi et al., 2017). In the supply chain of Tesco, most of their
suppliers are highly rated as they provide good quality products. The orders are timely
received by the organization. The inventory cost of Tesco is also very well managed as a
10

Context of Business
result of which it never falls a shortage of products. This helps the organization provide high-
quality service and helps in earning customer satisfaction.
Analyze how the above has been achieved or implemented by your selected company
with specific examples.
By implementing steering wheel strategy Tesco serves its different objectives like customers,
operations, people, community, finance and operations. With the help of this strategy, Tesco
tries to serve the best. The latest example is updating of EpoS cash drawers. These drawers
help the organization to monitor transactions in real time. The contract is of multi-million
pounds which would enable the organization to update point-of-sales cash management.
Tesco has invested in many CSR activities which have been proved to be successful for them.
One such initiative was launched in the year 1996 which was known as an energy awareness
campaign. All the managers and employees took part in the initiative. In this, all the stores,
offices, depots of Tesco were monitored to keep a check on the energy consumption. It was
found that through this initiative Tesco has reduced energy consumption per square foot by
35% from 1997 to 2005.
It has already been mentioned that the supply chain management of Tesco has been designed
to ensure customer satisfaction. From the records, it has also been found that the inventory
cost of Tesco is minimal that its competitors which give them an advantage over other
retailers.
What could be your recommendations as an improvement
It is known that the performance of Tesco has been excellent over the past years. They have
performed with excellence to beat their competitors in the market where there is high
competition. There are different reasons behind the success of Tesco. But nevertheless, there
are always opportunities for the organization to perform better. The management practices of
11