Business Environment Analysis of Tesco: Internal, External Factors, UK

This report provides a comprehensive analysis of Tesco's business environment, focusing on internal and external factors that influence its operations. The report begins with an introduction to the business environment concept, followed by a detailed PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors affecting Tesco. It also includes a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The report further explores the interrelationship between macro factors and Tesco's strengths and weaknesses, providing a holistic view of the company's position within the UK retail market. Finally, the report concludes with a summary of key findings and references to support the analysis. This report, contributed by a student, is designed to help students better understand the intricacies of business environment analysis.

Business and the
Business Environment

Contents
• Introduction
• PESTLE analysis
• Internal and external analysis
• Inter relationship between macro factors and strengths and
weakness
• Conclusion
• References

INTRODUCTION
Business environment is described as sum total of all internal
(employees, directors, customers etc.) and external factors
(political, social, technological etc.) which directly or indirectly
affect business in the open market place. This presentation is
based on Tesco which is a leading retail business in United
Kingdom. It came into existence in the year 1919 by Jack Cohen.

Internal and external analysis
Strengths
Tesco is one of the largest chain of supermarkets in United Kingdom which has thousands
of regular customers. Using a sound brand image and ample regular customers, Tesco can
easily market their new operations to the potential customers without spending too much
on promotional activities.
Weaknesses
Tesco currently deals in a retail industry which largely depends on the operations of
selling products of other brands. This company has no experience of providing household
services which can result in their weakness which can impact on customer satisfaction.

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Opportunities
The industry which revolves around providing household services is at boom in the
region of United Kingdom. Every large organisation nowadays is intending to launch
their own subsidiary which can provide household services to the customers.
Threats
UK is currently in a vulnerable position as the organisations of this country has to pay
high costs if they are procuring supplies from states of Europe which is a result of
BREXIT. In this situation, developing new operations in UK can be a threat for Tesco.

PESTLE analysis
Political – Brexit brought political instability in the country and it is making a huge
negative impact on companies like Tesco as they are failing to make investment related
plans for long term. This reason is rapid changes in regular and post Brexit fear of
uncertainty.
Economical – Low inflation is a major positive for Tesco as it will increase demand of
their products and services. They will not face any major hindrance related to demand in
initial period if they start new operation.
Social – UK has place in top 10 most educated population. This element is a positive factor
for Tesco as they can easily get good quality of human resource in less period of time.

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Technological – Technological development is happening in every field and Tesco
can use latest technology for bring more efficiency in their new operations by using
latest technology.
Legal – Strict regulation are not good for business of Tesco as it increases company's
recurring expenses.
Environmental – Tesco is committed to reduce pollution and develop a sustainable
business. They are investing huge amount in reducing carbon emission so they can
attain the target of bringing down their carbon footprint by 50% by 2020. This decision
is improving their image in public and influencing their businesses in positive way.

Inter relationship between macro factors
and strengths and weakness
• Political factors
- Strengths
- Weaknesses
• Economic factors
- Strengths
- Weaknesses
• Social factors
- Strengths
- Weaknesses
• Technological factors
- Strengths
- Weaknesses

CONCLUSION
From the above report it can be concluded that business
environment is the combination of all external and internal
factors which impacts an organisation both positively and
negatively. From the above report, it has been found that Tesco is
a large scale organisation which has potential to develop new
operations in the region of United Kingdom.

REFERENCES
• Ayios, A., 2018. Trust and Western-Russian business relationships. Routledge.
• Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE
GLOBAL COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS
(DB): CASE STUDY SLOVAKIA. Journal of Security & Sustainability Issues.
7(4).
• Geissdoerfer, M., Vladimirova, D. and Evans, S., 2018. Sustainable business
model innovation: A review. Journal of Cleaner Production. 198. pp.401-416.

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