Business Environment Analysis: TESCO's Challenges and Brexit Impact

This report provides a detailed analysis of TESCO's business environment, exploring various internal and external factors that influence its operations. It identifies key sources of influence in the 21st-century business landscape, applying them specifically to TESCO, a multinational grocery retailer. The report also examines the pros and cons of the UK leaving the European Union (Brexit) and discusses the challenges faced by UK businesses in the context of the global environment. Furthermore, the report delves into the impact of global factors on TESCO's future business development, including emerging markets and technological advancements. The analysis covers political, economic, social, technological, environmental, and legal factors, offering insights into how TESCO navigates these complex influences to maintain and grow its business.

Business environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 3...........................................................................................................................................3
Identify the widely recognised sources of influence which impact on the 21st century
business and apply them to TESCO............................................................................................3
TASK 4............................................................................................................................................5
(a) Give a considered, reasoned and critical argument as to the pros and cons of the UK
leaving the European Union........................................................................................................5
(b) Discussion on Uk business face challenges and the impact of global environment on future
business development. ................................................................................................................6

INTRODUCTION
Business environment means all the internal and external factors that affects the
organisations and its operations and functioning. These are those factors which are not under the
control of the companies and it affects the business growth and profitability. In this present
assignment TESCO has been chosen for assessment. TESCO is a multinational groceries retailer
which has its own supermarket worldwide. TESCO head office is in England, United Kingdom.
It has expanded its business in seven major nations. This report will majorly focus on widely
recognised sources of influence which impact the business of TESCO. In addition to this, pros
and cons of the UK leaving the European Union will be analysed in detail. Furthermore, Impact
of global environment on future business development will be described briefly.
TASK 3
Identify the widely recognised sources of influence which impact on the 21st century business
and apply them to TESCO.
Business gets affected by various different factors due to which business gets affected
and have widely to TESCO. It is a big multinational supermarket company which operates
business in seven different nations. As the organisation has its supermarket in different nations it
gets affected by various factors, the same are described in brief below:
Political factors: TESCO is an organisation which operates worldwide and thus get affected by
different political factors. Every country has a different political background and that is required
to be adopted by the multinational companies in order to operate in the nation (Hamilton and
Webster, 2018). Performance of the company affects the large number of population as TESCO
is a retail sector and it provides employment to people and helps in various other ways. There are
various different tax laws that affect the company and also prices are determined and get
fluctuated by the same. Import duties also affects the business as TESCO imports majority of
stock and material from China and east Asia. Many of the nations are highly focusing on giving
employment to their citizens and they encourage company for providing employment to
domestic population and disabled people as well. Thus, this all things are required to taken care
of by the establishment and business of TESCO get influenced by the same.

Economic factors: These are those factors which affect the prices and profits of the company. It
is most essential to concern about these factors in order to grow the business more by the
company in the future. Like unemployment is a factor which affects the business because it
lowers the purchasing power of people (Schaltegger and Wagner, 2017). But this factor can not
be controlled by the organisation alone. In addition to this, recession in UK economy has
affected positively to the business of TESCO. As people started eating out less due to the
recession and eat more at home which has increased the business of groceries retail sector such
as TESCO. It can be said that overall purchasing of food items has increased in UK and thus, the
recession factor has affected the business of TESCO. Other than this, labour cost is the most
crucial factor that influence every business, In context to TESCO, it has affected the prices of
company due to higher labour charges cost gets enhanced and affects the pricing policy of the
organisation.
Social factors: There are various different factors which affects the business in different ways.
Like People in UK started to believe that bulk shopping is more easy and that is also a reason of
increasing business of TESCO. It can be said that behaviour of people and their mid set has great
impact on the businesses. Like in today's time people started thinking more about the health and
that is the reason TESCO has also increased its business towards organic products. In addition to
this, as per the population graph of United Kingdom there are more retired people than Children
and these older people like go to less for shopping to supermarkets than young people
(Farole and et.al., 2017). These factor is also a concern for TESCO and the same has been taken
in to consideration by the company. Online delivery of items at home is the solution for growing
market in old age people. As they do not like to move out much but are more happy with home
delivery of products and timely services.
Technological factors: These is one of those factor which has affected the development of
TESCO products. When a business focuses on developing its product or services than its likely
to develop it more by adopting different technologies. This always attract consumers and it also
helps in customer satisfaction due to the fact that goods will be readily available. It also makes
possible to give better and fast services (Tukker and Tischner, 2017). Like TESCO has made
higher investment in energy efficiency projects which has helped the company In accomplishing
its objective of reducing carbon footprint. Other than this, the company has developed its own

mobile payment system through which customer can pay more easily. That payment system
application is called PayQwid.
Environmental factors: Organisation has to face various issues and requires considering the
same in order to expand the business. Government of different nation puts pressure on
companies to consider the environmental factors while running business. TESCO has already
started working on reducing its carbon footprint and it has objective of reducing it majorly by
2020. Other than this, government says that use of renewable sources should be more adopted by
organisation so that it can help the world more. Hence, TESCO is very highly committed in
using renewable source and is focusing on producing its own electricity by 2030.
Legal factors: There are certain rules and regulation made by every nation that must be followed
by the organisation. TESCO is operating in various nations and thus all the laws that are
prevailing in the nation must be considered. The law changes always directly or indirectly to the
business objectives of the establishment. Like TESCO carry its operation as per the food
retailing commission strict code of practice. So it can be said that all such factors are required to
be complied with to carry business operations in most effective and efficient manner (Ahmed
and ALAMM, 2017). This factors are affecting the business and management should made
certain changes for growing the business.
TASK 4
(a) Give a considered, reasoned and critical argument as to the pros and cons of the UK leaving
the European Union.
From June 2016, United Kingdom got separated from European union is termed as
Brexit. Due to this separation many businesses got affected and has faced various positive and
negative impact of it. Below are the pros and cons of this separation of UK from European
Union.
Pros:
 This separation has allowed United Kingdom to made its own decision in any of the
matter as a separate independent nation. It helps people in improving their economy and
better nation development.

 There is no need of following any laws that are being set up by European union. It can
have its own law and thus Britain can enjoy a separate legal structure. Example is rules
on value added tax (Bhowmick and Prasad, 2017).
 UK can control the immigration of people in its member state and due to this high
migration of European people in UK can be controlled. This new laws of immigration
will help in making it difficult for terrorist to enter in United Kingdom.
 United Kingdom after Brexit can make different and easy laws for companies so that it
can help in making working environment more easy for people.
 This fewer rules and regulation of united Kingdom will allow people to increase their
productivity. As it is easy to work in a environment where there are fewer rules and
regulation.
Cons:
 By the separation Britain will no longer be the part of worlds the largest free trade
negotiation that is between EU and United states.
 European Union has always helped UK by providing funds for the different educational
programs. So now after the separation it will affect the students as there will be no longer
higher funds available with the nation to invest on (Singh and Agrawal, 2017).
 Exiting from EU, Britain will have to make and set up policies which can protect human
consumption through laws that ban any harmful accumulative from food and keep a wide
animal welfare standards.
 Britain will no longer be able to take participation in European union's decisions or it can
not make any law for the same.
(b) Discussion on Uk business face challenges and the impact of global environment on future
business development.
Due to the Brexit there are various different impact on United Kingdom, Business of the
nation has also faced many challenges. Some of them are briefly discussed below:
 Before this separation United Kingdom used to get major funding form EU. Now after
this separation the funding will be ceased. So various sector will get affected by the same
and lack of funding will affect the business. It will make difficult for organisation to run
their business so this is a major challenge faced by the companies after Brexit in UK.

 Other than this, various issues in supply chain will be a major challenge for the business.
Country of origin requirements and tariff will be required to supply products by the
companies. It will increase the cost and hike the prices of the goods in the nation.
 On of the major issue faced by the business will be of applying for new separate
trademark for UK. This will be a long process that is to be followed by business man in
order to hold their rights. It will create difficulty for organisation to go again to the trade
mark and patents process.
 Those businesses which are highly dependant on cross border transits will also face major
challenges due to Brexit.
Impact of global environment on future business development.
There are various factors which the future business development of the business.
Internationally, organisation has to take in to consideration about all the different factors that will
affect the business. Below are some factors which affects the future development of the business
Emerging markets: TESCO has higher market to grow its business and there are different
market segments where the business can be grown by the company. This emerging market is an
opportunity for TESCO to expand business globally (Kozubíková, Homolka and Kristalas,2017).
These new markets will give future development of the country.
Advances in technology: Due to higher technological system business can be expanded more
and better services can be provided by the same. TESCO has adopted higher technology for
operation and functioning of business. This will help in future development of the business along
with that customer satisfaction can be adopted (Saleem, 2017). To grow in international market
and future development of business it is really important to run business according to the recent
trends. This global environment of technology can help the business in growing more
significantly.
CONCLUSION
From the above report it has been concluded that there are various factors that affects the
business and its functioning. All such factors are required to be complied with to carry business
operations in most effective and efficient manner In addition to this, the major benefit of Brexit
is that There is no need of following any laws that are being set up by European union. UK can
have its own law and thus it can enjoy a separate legal structure. Furthermore, it is important to
adopt advance technological system so that business can grow more in the future.

REFERENCES
Books and Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Tukker, A. and Tischner, U. eds., 2017. New business for old Europe: product-service
development, competitiveness and sustainability. Routledge.
Bhowmick, A. and Prasad, C.G.V.N., 2017. Time and cost optimization by grid computing over
existing traditional IT systems in business environment. Int J, 5, pp.93-98.
Farole, T. and et.al., 2017. Business environment and firm performance in European lagging
regions.
Singh, V. and Agrawal, A., 2017. Impact of business environment on balancing innovation
process in Indian SMEs. International Journal of Business Innovation and Research,
12(2), pp.224-239.
Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Saleem, M.A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of Society and Space, 8(1).
Ahmed, F. and ALAMM, M.A., 2017. Business Environment: Indian and Global Perspective.
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