Business Environment Analysis and SWOT of Tesco (BUS 101)

This report provides a comprehensive analysis of Tesco's business environment, exploring its organizational structure, functions, and the impact of macro-environmental factors. The report delves into the relationships between different organizational functions such as finance, human resources, administration, consumer service, sales, and marketing, highlighting how these departments contribute to meeting Tesco's business objectives. A detailed PESTLE analysis is conducted to assess the positive and negative impacts of political, economic, social, technological, legal, and environmental factors on Tesco's operations. Furthermore, the report includes a SWOT analysis to evaluate Tesco's internal strengths and weaknesses in relation to external opportunities and threats. The analysis considers how external factors shape these internal elements, providing insights into Tesco's strategic positioning and challenges within the retail industry.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Assess the relationship between different organisational functions......................................1
TASK 3............................................................................................................................................4
P4 Positive and negative impacts of macro environment of business operations.......................4
TASK 3 ...........................................................................................................................................6
P5 Conduct SWOT analysis of Tesco.........................................................................................6
P6 Describe how strengths and weaknesses are related with external elements.........................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is the entities which deal or merchandise products and services in exchange of
monetary and non-monetary services. Business environment affect various elements of an
organisation as well as avail in development and product selling process. A business
environment consist of various macro and micro factors which affect the productivity and
profitability of company in either effective or ineffective way. This report will discuss about
Tesco, a multinational retailing company expanded in more than 14 nations (Aula, 2010). This
report will analyse various types of organisation and there difference according to their size,
scope and types. The report involve various connection between those company's functions as
well as how the function avail in meeting the objectives of company. Also, various environment
elements will be evaluated along with their negative and positive impact on the performance of
organisation. Though external factors are responsible for shaping thee strengths and weakness of
business organisation.
TASK 1
Covered in PPT
TASK 2
P3 Assess the relationship between different organisational functions
Introduction
Tesco is a multinational supermarket which merchandise their wide range of products and
services in not only entire United Kingdom but also various other countries. This is one of top
three largest retailing organisation in UK. The company focus over dealing with commodities to
consumer in high quality along with cost effective process.
Main Structure
Tesco have vision to expand their business in entire global trade rendering high quality of
products in better process of them in order to get the potential buyer and satisfying consumer
need. In order to accomplish the vision or aims of the company, the organisation focus over more
innovt6aive and creative products rendering for gaining and portraying effective recognition
among the public, buyer and markets (Aterido, Hallward-Driemeier and Pagés, 2011). In order to
meet the business objectives, they are executing various strategies and CSR practices. The ms
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important aspects of attaining business goals is to meet and coordinate the functions of business
organisation in proper way. They all functions or department can avail Tesco in execution of
strategies as well as meeting business objectives. Here are mentioned functions of firm and how
it assist in meeting the objectives of enterprise.
Finance
This is significant for a large organisation like Tesco to manage the funds and activates of
finance for balance use of capital asset of enterprise. This is most important function of an
enterprise either small or large as it avail in management of financial activities like assigning and
maintaining funds for various operations. It include major two entities i.e. manager and
accountants (Borio, Drehmann and Tsatsaronis, 2014). Accountants are those individuals who
store and document the data or information of incurred activities linked with expenditure or loss
and profits of company in various operations. On the other hand, manager design or control the
plans executed through undertaking budgeting, planning and their certain strategies by which
entire investments and funds collection decisions in being made.
Relation
In order to accomplishing the determined aims and objectives, this department avail one
of major parts, this manage and help in balanced use of the financial asset of company and
budgeting process on which basis the activities are being organised. This helps in controlling
extra expenses as well as achieving aims of enterprise in effective way.
Human resource
This is one of the significant department for each small or large organisation. This avail
in managing the operation and implementation of strategies or plans in working environment by
controlling and coordinating employee relation of Tesco in effective way. HRM is responsible
for undertaking various employment laws and legislation, promotion, determination of policies
as well as allocation of wages through undertaking negotiation, and collective bargaining process
in the organization.
Relation
HRM is organisation's backbone as to avail in the operations of enterprise as well as avail
internal benefits such as managing flexible, friendly and better environment to direct the working
environment and meet aims (Business and the environment, 2017). Through managing the
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employee relation, stimulating and motivating worker, they attain the targets and aims of
company leading to achievements of business objectives of Tesco.
Administration
This is linked with the clerical work as an organisation need to manage and document
various types of information and data linked wit their operations, activities, employees, sales,
production and many other. As Tesco is a large organisation, they have to manage, maintain and
secure their information for saving it for protecting and providing safety.
Relation
If he organisation would be able to render proper security of information it will avail in
managing employee relation, Although the major part is avail in business objectives through
managing and securing information of company and proper direction of it that avail suitability
and better research of market.
Consumer Service
Satisfying requirements of customer is the major aims or vision for organisation like
Tesco as it determines the products and services as well as sales of commodities of enterprises.
This functions avail in resolving issues or conflicts as well as advising consumer in conflicts or
issues.
Relations
This Dept. avail in meeting objectives of business of Tesco directly as this determine
popularity, help in expansion through increasing sales of products or services of organisation in
effective way (Edquist, 2010). It also avail in analysing interest of consumer according which the
prodcts are being produced.
Sales and Marketing
Through ration of sales measurements of benefits can be done by an organisation like Tesco.
Marketing and sales function for increasing and developing sales amount or users of company
products and services for which they undertake various activities like promotion, trading,
targetting, research amrke6 and developing strategies or policies of company.
Relation with objectives
The main objectives of Tesco is to increase sales up-to 20% aggregate and expand the
business of company. Through marketing and sales, company can attract more buyer or potential
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consumer that can avail the organisation in meeting their business objectives as well as lead to
success.
Conclusion
Thus, through these function management of Tesco, company can successfully meet their
business objectives within a period of time. Also through maintaining BOD company make the
major decision making in regard of these function. Hence, this is how the functions assist a
company in reaching desired goals.
TASK 3
P4 Positive and negative impacts of macro environment of business operations
Macro environment refer to the external elements which affect the business organisation
surroundings. This consist of various elements which can influence their operations and decision
in the organisation (Fernando, 2011). It includes factors like social, economical ,technical, legal,
political and environment. These elements can influence them in negative or positive way
depending on the situation. Through PESTLE analysis various impact of these elements can be
measured which is discussed under:
Political Factor
The United Kingdom is now regulating their policies and terms outside the EU after
Brexit which have impacted on trade of UK as well as other nations. It have made the services or
goods more easier as well as smarter. Beside this, the state have made various restriction and
regulation in regard of safety and health standards for identifying risk, danger and several other
products.
 Positive Impact: cause of less restriction on foods and services movements, Tesco have
increase the huge benefits. This consist of sector of retailing where the services dan
products is major activity, thus, the European decision committee avail their enterprise in
positive way.
 Negative Way: Cause of strict rules of health and safety, the company have to fund or
invest more in managing product's quality standard (Grimpe and Kaiser, 2010). It will
gain the entire cots of organisation.
Economical Factor
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These elements are dynamic as the economy stay constant. Changes which are
continuous in rates of inflation, GDP, recession, population etc. These factors influence people's
buying power. Positive impact: Cause of this problem, Tesco will began developing services for income
groups, The number of customer will developed for enterprise as well as it will help in
meeting competitive benefits.
Social Factor
These elements often linked with the social changes, interest and expectation along with
values, culture and morals etc. The preferences or taste of consumer varies with the geographical
or demographic change. Consumer are more involved toward less cots and better quality that can
help in boosting benefits of Tesco. Though it is required to manage the quality of products at the
same time.
 Positive Impact: Such factors affect organisation in understanding the ways and
demands or society in regard of products which will avail in managing effective
manufacture process in Tesco (Hamilton and Webster, 2015). He can establish retailing
products in better and effective rates which can avail consumer as well. Negative Impact: To manage the products quality, large amount is engaged in process of
manufacturing that will increase the company cost.
Technological
This is most essential elements in the supermarket sector. For the purpose of effective
brand promotion, this is required to use proper advertising tools. The organisation is adopting
advancements in technologies for communicating a better message with consumer. Tesco have
also developed a strategy of carbon free production till 2020 which have garb the attention of
consumer a well as critic.
 Positive Impact: Tesco is dealing effectively within these fields of market as well as this
can help in portraying good image of company along with brand awareness. Negative Impact: Advanced technology adoption can influence the business
performance of organisation as well as worker of company. This can develop chance of
training dan development in the company.
Legal Factor
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Legislation and laws changes with the political parties and situation. According to the fair
Labelling and Packaging Act(1996), terms linked with the services or products are strict.
Organisations have to describe every little detail related to their packet of goods (Iskanius, Page
and Anbuudayasankar, 2010).
 Positive Impact: Tesco will focus over more packaging techniques and health linked
issues of products,. It will also avail in developing image of company against clients. Negative Impact: These changes influence the strategies, productions and decision
procedures of enterprise that sometimes decrease the productivity.
Environmental Factor
People of United Kingdom have become more conscious about the environmental
elements for reducing amount of pollution and other climate polluting activities which is leading
world toward global warming, carbon emission etc. Tesco is introducing strategy in which they
have announced to reduce the level of pollution by 50% till 2019.
 Positive Impact: As the organisation in include in the preservation of environment
pollution, this can result in better and effective reputation as well as outcome in retailing
sector.
 Negative Impact: These strategies are often too expensive as company have to develop
entire manufacturing system as well as use ecological operation process.
TASK 3
P5 Conduct SWOT analysis of Tesco
An organisation's surrounding shapes the development levels along with products and
culture of a company which depend on various elements such as locality, clients interest,
demands etc. Hence, the elements that internal and external environment influence the outcome
of activities of operations of an organisation (Welford, 2013). For evaluation of macro factor,
Tesco can conduct PESTLE analysis that can avail company in gaining better productivity and
understanding strengths and weaknesses of it. Here are major elements evaluation mentioned
under:
PESTLE Analysis of Tesco
Political Factor United Kingdom have adopted some new terms in Taxation policies
which have influenced Tesco in various ways. The nation have been
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able to recollect more than 13billion Euros from the taxation policies
which have effected the consumer purchasing power. These policies
are becoming cause of increased instability of Tesco and the business
of company is facing loss due to higher rates of tax as there is no real
revenues amount left (Jung, Kim and An, 2011).
Economical Factor Higher rates of GDP of United Kingdom's GDP which have become
2.7% than pre-crisis peak. This can result in growth of supermarket as
well as effective operations of Tesco. The unemployment of citizen
have been increase after recession and economical crisis, thus country
have been relayed on larger enterprise like Tesco.
Legal Factor Tesco also provide financial services along with their products such as
mortgages, loans, saving etc., The Act of Financial Services was
executed by government of Unite Kingdom that have affected the
decision making process of Tesco in various ways. Also taxation
policies led huge loss to enterprise as well.
Technological Factor Tesco have recently developed some technologies in sector of
manufacturing products, sales of products and payment system. The
company have introduced new e-cart in which the consumer can direct
bill their products while adding in cart at stores (Siewiorek and et. al.,
2012). Also the company have introduced online shopping facility that
deliver term opportunity to shop in more comfort zones.
Social Factor It is essential to manage the elements of social factors as the products
are produced to deal in the competitive market. Most of population of
United Kingdom is senior who like traditional styles goods whereas the
company produce more advanced technology and services. Also the
purchasing power have been deceased of consumer that lead
organisation toward loss of revenues and sales of products and
services.
Environmental Factor United Kingdom is contributing in global pollution controls activities
for which they are introducing some strict laws and legislation in their
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country. On the other hand, Tesco is going more eco-friendly and have
announced to transform 50% of their activity more ecological.
Micro Environment Consumer: Consumer are the major part of enterprise whom they deal or trade their
services for flow of funds and finance in enterprise (Kolios and Read, 2013). Tesco is one
of most largest retailing companies that is majorly focusing over the potential buyer and
develop their relation for long commitment of them. Supplier: These are main individuals which deliver raw material of product. In order to
enlarge gross benefits amount and increasing revenues, the company organise various
activities in order to strengthen the elations with their buyer.
 Competitors: These are main limitation of Organisation like Tesco which makes the
process of analysing rivals more essential. The major rivals of Tesco is Walmart,
Sainsburry, Aldi etc. who are successfully turning Tesco's consumer into theirs.
On the basis of these elements, SWOT analysis have been undertaken which is mentioned
as below:
SWOT analysis of Tesco
Strengths Weaknesses
 Tesco is one of largest grocery
supermarket in whole UK.
 Enterprise have strong Financial
position in entire industry beside Wal-
mart (Miller, Yablonovitch and Kurtz,
2012).
 The organisation provide broad
commodities range such as books,
electronic, grocery, toys, financial
services etc.
 Cause of wide range of products, the
management process have become
more complex.
 There is string competition such as
Aldi, Wal-Mart etc.
 Company is dealing financial loss due
to recession and new taxation policies.
Opportunities Threats
 Globalisation as well as open market
have rendered market expansion
 Financial crisis in United Kingdom is
limiting development and leading to
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opportunities.
 Company popularity and internet
services is delivering more
opportunities of development.
 Franchisee services is also one of
expansion strategy.
financial loss.
 Rivals are developing that can restrain
company development.
P6 Describe how strengths and weaknesses are related with external elements
After considering the internal elements control the external elements as both are
interrelated with each other in various ways (Moutinho ed., 2011). These elements helps Tesco
in increasing revenues r growth of company through undertaking required process and strategies
on the grounds of analysed macro and micro environment Here is discussed how macro
environment shapes micro environment factors (strengths and weaknesses) of Tesco: Economical Elements: The organisation has the good economical appearance in trade
that is availing for company in competing competitors. This can create one of the strength
for organisation. But as the debts are increasing in market which is leading company
toward threat or weakness. Political Elements: Th company is suffering new taxation policies introduced by UK
government in order to deal with rivals. This is creating organisation one of the weakness
as there is not actual revenues increment in the enterprise. On the other hand, government
relay on company for employment opportunities of youth of enterprise leading toward
subsidies from state. Technological Factors: the advanced and modified technologies of enterprise in
manufacturing and production process is directing. the organization is using new E-
trolleys or cart system that have provide consumer conveniences in billing system as they
do not have to stand in a row (Robbins, Judge and Campbell, 2010). Thus, advanced
technologies of Tesco is strengthening the positive aspects of organisation as well as
helping with potential buyers. Social Factors: Organisation is developing its business in various sectors and nations
thus, the company have to evaluate entire social analysis of those social environment.
Due to tradition choice of UK people, company may face loss which is one drawback of
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organization. But after infantilisation and advanced technological era, the company is
producing more destructing products. It can be considered as one of strength of company
for dealing more altered services. Legal Factors: New policies of taxation, financial service act is limiting the expansion of
organization. It is making Tesco more weaker in time of recession in United Kingdom.
The new legislation is affecting enterprise in both positive and negative manner. Tough
as company is delivering employment opportunities to vast amount of youth in country, it
may lead organisation toward concession in legislative process.
 Environmental Factor: New legislations and policies of environment pollution may
restrict the company in many ways. This can lead toward better eco-system as well as risk
for upcoming time (Pestle and Colvard, 2012). Though new announcement or strategy of
ecological operation of Tesco can enhance the system of enterprise in effective way.
So above mentioned SWOT analysis is shaped from external factors in these ways. This
depend on the characteristics, traits or elements of macro sector that contour the company in
impressive way.
CONCLUSION
It can be concluded from the above report that business environment play a vital role in
the development of organisation. Proper coordination of business enterprise function avail in
achievement of objectives and goals of a company. There are mainly three types of company i.e.
private, public and voluntary which distinct from each other on grounds of size, types, purpose or
scope. This report also summoned that external and internal environment are interlinked with
business objectives as well as each other that increase the productivity and profitability of
company in most organised way. Thus, through external environment company can evaluate
their strengths and weaknesses.
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