Impact of Macro and Micro Factors on TESCO's Business Decisions

This report provides a comprehensive analysis of TESCO's business environment, focusing on the impact of both macro and micro factors on its decision-making processes. The analysis begins with an introduction to the business environment, emphasizing its dynamic nature and its influence on business operations. The report then delves into a detailed examination of the macro environment, utilizing the PESTLE framework to identify the positive and negative effects of political, economic, social, technological, legal, and environmental factors on TESCO's operations. The report further explores the internal and external aspects of TESCO using SWOT analysis, highlighting the company's strengths, weaknesses, opportunities, and threats. The interrelationship between strengths and weaknesses with external factors is also discussed. Finally, the report critically evaluates how the identified micro and macro factors influence TESCO's strategic decision-making, offering insights into how the company can leverage its strengths and mitigate its weaknesses in response to external challenges and opportunities. The report concludes with a summary of the key findings and their implications for TESCO's future performance and success within the retail industry.

BUSINESS ENVIRONMENT
(PROJECT 2)

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P4 Negative and positive effects the macro environment...........................................................1
M3 PESTLE model ....................................................................................................................3
TASK 2............................................................................................................................................5
P5 External and internal analysis of organisation in regards to find their strength and
weakness.....................................................................................................................................5
P6 Weakness and strength are interrelated with external factors................................................6
M4 SWOT analysis influences on decision making process of company .................................6
D2 Critical evaluation the effects that micro or macro factors have upon decision making .....7
COCLUSION ..................................................................................................................................7
REFRENCES...................................................................................................................................1
.........................................................................................................................................................2

INTRODUCTION
Business environment (BE) is the combination of external and internal factors that
influence business operations to a high extent. It covers buyers, management, workers, demand
and supply as well as business regulations. BE is dynamic in nature, that essential in order to
keeps on modifying. It will differs country to country as well as defined as a set of conditions
which include legal, social, political, institutional and economical that are difficult in nature and
affects the organisation’s activities and functions (Zeng and Duan, 2012).
Project two is based on TESCO which is a retail enterprise in the UK. This file will
describe direct and indirect effects of macro environment on the decision making process. To
analysis both external and internal aspects, PESTLE or SWOT analysis will be determined to
attain long term goals and objectives of the firm.
TASK 1
P4. Negative and positive impacts the macro environment has upon business operations
There are some external factors in the dynamic environment which can influence
company’s market conditions in an impressive way. So, it is called as macro factors which put a
direct impact upon success and growth of enterprise. It can be determined as the PESTLE
analysis which is an important factor for each and every company in order to identify negative
and positive effects on their functional area (Belás and et. al., 2015). It will cover all political,
economic, environmental, social, legal and political aspects.
PESTLE Positive Effect Negative Effect
Political factors This factor covers rules and
regulations of the government,
trade policies and other
elements. Hence, if British
authorities can decrease its tax
and employment rates on
selling all goods in various
nations, it will be beneficial
for company to expand their
business operations in an easy
Political factors also have
negative effects which are
uncontrollable. Country faces
different difficult situations in
regime’s stability that are
present in political
surroundings. This can effect
upon company productivity
and growth. In this, Brexit also
influences gross domestic
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way. Regime of United
Kingdom helps globalisation.
With the help of this factor,
they invested a large amount in
this sector.
products and sales revenue of
the nation.
Economical With the support of this factor,
company can upgrading day to
day and open their business in
multinational areas. This factor
provides better shape in person
income level so in this they
extremely contribute in nation.
This would maximise the
capital income and GDP of a
country (Boons and Lüdeke-
Freund, 2013).
This factor also has negative
impacts such as poverty,
maximised unemployment,
bank & interest rate as well as
income level, etc. All aspects
was effected by buyers buying
capability. Through which,
company faced different losses
in their profitability.
Social factor TESCO is a retail organisation
which deals in grocery
products. There are different
person are workers which
belongs in several culture.
They all are having new plan
which can support in order to
perform better in other nations.
Social factor also has negative
effects. It is very hard for the
administrator to determine
their buyer’s wants and needs
in an aggressive manner . In
this, company cannot provide
satisfaction to their customers,
so it will might a higher losses
in target market.
Technological Advancement in technological
support in maximising
production ability of TESCO.
It also raises employees and
staff members’ technical
It is never possible for each
organisation to buy machinery
and other heavy equipment,
hence, they never stay for long
duration in the marketplace.
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knowledge .
Legal With the help of this factor,
TESCO complete whole legal
legislation and rules which is
framed by the government so
in this they can perform in a
better way within community
(Craig and Campbell, 2012).
Sometimes, legal factor has
negative effects on company’s
operations and activities. It is
because; in this, authorities
regulated some strict
regulation for export and
import in other locations.
Environmental Corporate social
responsibilities (CSR)
fulfilment support a business
in order to involved with
buyers for long duration.
This factor highly influences
company’s profitability as well
as productivity.
M3. PESTLE model
PESTLE analysis of TESCO is important and beneficial for them in identifying their
external condition in market place . Below are some points which are covered in this model:
PESTLE analysis Description
Political These factors affect the decision making
process and functions of company. Trade
Union activities as well as lobbying enterprise
of market. All those are main factors of
political which is highly effects on company
operation. To overcome all financial instability
so in this government help TESCO in order to
create employment (Cronan and et. al., 2011).
With the use of this, business can maximise
their luxury product’s demands and supply by
classifying workforce.
Economical One of the main part of organisation is
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economical because it involves product prices,
profits and leverage costs etc. Therefore, it is
beneficial for the organisation to be conscious
towards all modifications. Decline in
disposable or household income, firm is tend in
order to promote their specific and luxuries
goods to the customers.
Social Now, clients are mainly affected towards bulk
buying. So, in this organisation will also
focused on supplying grocery items for
creating large sales. In the business, there are
some other products which is not impact their
beliefs and values.
Technological Advancement in technology which is
beneficial for the company growth as well as
success also. This factors covers several
aspects such as online purchasing development
and check out self-service availability (Hall,
2011).
Legal Legal facto cover all rules and regulations as
well as policies which is framed by the
government. It can highly affect the
performance and productivity level of
enterprise. In 2004, Functional Residual
Capacity has charged grocery product’s prices
without noticing and warning.
Environmental With the help of environmental factor,
company has to select essential form of
production (Moutinho, 2011). It is useful and
beneficial for the development, success and
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growth of society.
TASK 2
P5 External and internal analysis of organisation in regards to find their strength and weakness
TESCO is a retail business in United Kingdom, they are capable to conduct external and
internal analysis in a systematic manner. This factor support them, in order to explore cost
position, competitive validity and competency at marketplace. It will also help in business
Judgement-making activity towards coming year. It can be complete, with the aid of SWOT
analysis. It is essential part of TESCO in order to identify their strength and weakness are known
as internal factor along with this opportunities and threats are called as external factors. There are
SWOT analysis of company which are described under this:
INTERNAL Factors:
Strength: One of the main strength of company as they won different awards and facilities for
their development and success. It is a profitable and largest supermarket and multinational chain
in order to fulfil buyers satisfaction level. Business has compete its challengers in international
market. Cited firm give their services in all over the economic, they have 7817 retail stores in the
globe. Related to big portfolio in property, the enterprise has better option in order to raise their
financial abilities due to selling several aspects of property. So it would support in regards to
deal with crises and emergencies.
Weaknesses: In 2015 Company faced different loss in statutory by 6.5 Billion. It was highly
impacted its profits and net income in an effective manner. There are different employees they
are not work properly so in this firm can not get more profit. Various challengers of TESCO such
as Sainsburry, Walmart and Morrisons etc., Main competitors is ASDA which provides same
products to their customers (Siewiorek and et. al., 2012). All these are effect the business sales
and revenues.
EXTERNAL Factors:
Opportunities: Private label market is a great opportunities of the company. In this franchising
as well as alliances also give a better possibility to business; it supports them in order to execute
in foreign market and attracting large number of the buyers. Better option for TESCO is joint
venture; in this local organisation can support to conduct market research. So in this they can rise
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up performance in all areas. E- caramelisation online purchasing is greatest productivity for
enterprise. So in this they expand their operations and activities over the world in a easy way.
Threats: Continuity in financial crises as well as credit crunches bot are board threat which can
decrease share and profitability of firm in marketplace. Maximising the raw material cost also
impact the mentioned company profitability ratio by boosting providers rates. Another threats of
the firm; stakeholders of the company is forces in order to complete CSR towards surrounding, it
is put reverse effect on business cost.
P6 Weakness and strength are interrelated with external factors
Each and every organisation has their own weakness and strengths that will impacts its
operations and working activities. So it is beneficial and valuable of their success and
development in marketplace. Related to several external factors, positive and negative points of
the company also impacted. In the organisation, all things are organised as well as managed in a
proper manner through a correct strategic methods. This is supportive for cited business because
it will execute the high competitive benefits from worldwide . All aspects are linked with each
other and macro factors (Ullah and Lai, 2011).
Related to political disorder, there are different job opportunities which cause as
authorities pressure. Apart from that, person income level, non-food & food products sales also
maximise. In year 2008 worldly instability effect the person income level, so in this mentioned
business also decline their job opportunities by two percent. As a social term, TECO is capable
in buyers reaching activity in order to meet with their requirements and desires in a systematic
manner. But some time this organisation is never able in regards to follow legislation which
influence on its decision-making and morality in a proper way.
M4 SWOT analysis influences on decision making process of company
By formulating strengths, weakness, opportunities and threats, company manger can
evaluate whole internal aspects in a easy way which can influence its profitability and market
condition. Positive points of the business then it can attain its objectives and goals in a specific
time period. SWOT analysis in important for the firm which support them its judge-making
activity (Welford, 2013). There are several points which are covers in this aspects are as
follows:
Strengths Weakness
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 Maximising their share in marketplace
 Online facilities
 Assured services or products quality
 Great value in their brand
 United Kingdom market leadership.
 Reduction in Debt
 Dependence on United Kingdom and
US market.
 Mark points to ordering acquisitions
Threats Opportunities
 Main challengers such as LIDI, ASDA,
SAINSBURY and others.
 Foreign return could tumble
 Beauty and healthy products
 Deal in different kind of Non -food
companies.
 International development and growth
D2 Critical evaluation the effects that micro or macro factors have upon decision making
According to the Adeoye, (2012)all factors are interrelated with each other and have to
influenced on business activities and operations. It is beneficial for the administrators in order to
identify internal and external aspects so in this way they can attain their objectives in specific
time period. For examples: One of the weaknesses of company is their challengers, if all rivalry
have better quality products which can hinder the TESCO profitability and sales in unsystematic
manner (Zeng, and Duan, 2012).
As per the other hand Cassell, (2012) it will impacts the business decision-making activity, in
this administrator not take accurate judgement as well as never attain their mission or vision in a
systematic manner.
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CONCLUSION
As per the above mentioned report, in can be determined the business-environment is
essential part of the every company. With the help of this they can easily identify their internal
and external factors in a proper way. There are several tools and techniques are used in order to
identify company strengths, weakness, opportunities and threats, these are known as SWOT
analysis. PESTLE analysis covers all external factors such as political, social, environmental,
economical, technological and legal etc. All these are interrelated with Swot analysis and
influence on business activities and decision-making process. Pestle analysis has positive and
negative effects of company operations and their functions.
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REFRENCES
Books and journals
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19.
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Learning using an ERP simulation game. Decision Sciences Journal of Innovative
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review. 86(1). p.4.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Siewiorek, A., and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
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engineering. Journal of Computer Information Systems. 51(3). pp.21-28.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing environment.
Information Technology and Management. 13(4). pp.297-310.
Online
PESTEL ANALYSIS, 2015. [Online]. Available through:
<https://www.kbmanage.com/concept/pestel-analysis>.