Tesco Business and Business Environment Analysis Report - Semester 1

This report provides a comprehensive analysis of Tesco, a major UK-based retailer, within the context of its business environment. It begins by defining the business environment and its dynamic nature, emphasizing the importance of understanding this environment for business success. The report then categorizes and describes different types of organizations—private, public, and voluntary—using Tesco, the NHS, and Oxfam as examples, respectively. For Tesco, the report details its background, products, vision, mission, organizational types (public limited company), purpose, objectives, legal structure, and stakeholders. It also discusses the size and scope of Tesco, highlighting its large workforce and international presence. The report further explores the NHS and Oxfam, providing similar analyses of their backgrounds, products, vision, mission, organizational types, purpose, objectives, legal structure, and stakeholders, along with their respective sizes and scopes. The report aims to provide insights into the diverse organizational structures and their operational environments. The report covers the company's size, scope, objectives, and stakeholder analysis, providing a holistic view of the business and its environment.

Business and the
Business Environment

INTRODUCTION
Business environment is considered as internal as well as external aspects of business
which impact their whole performance(Benmamoun and et.al., 2016). This consists technology,
consumers, legislation and many others which are crucial for firm for operating their business
activities. It is dynamic in nature as they keeps on changing as well as do not remain constant.
So, for operating the business into competitive market, this is very much essential to know about
the changing environment for accomplishing the consumers needs. For this report, the chosen
company is Tesco is one of the largest grocery store which has been established in United
Kingdom. It serves large number of people with grocery items. The purpose of this report is to
describe the various types as well as purpose of organisation with their size and scope.
Interrelation among several organisational function and impact of macro environment on firm.
Apart from this, internal and external analysis of company as well as strength and weaknesses
with external macro factors are also mentioned in this report.
P1. Various types and purpose of organisation.
There are three kinds of firm like public, private and voluntary . All of them are have
various kinds of purse, objective and so on which are mentioned below:
Private organisation
Private firm is considered as any individuals, partnership, corporation etc. which run their
with the aim to earn profit. This is not operated or regulated through government.
Background of company:
Tesco is a multinational British retailers which was established in year 1919 through Jack
Cohen. This is known to be the 3rd and 9th largest retailers in respect of gross revenues and
simply revenues. It have around 6,569 stores into various area of world. they are operating in
Malaysia, Ireland, Poland and many more. The chairman and CEO of Tesco is John Allan and
Dave Lewis.
Product and services: The respective company is facilitating many product and services to the
customers. The services and products that they offer are banking, mobile services, books and so
on(Calabrese and et.al., 2018). They facilitate home services to customers for its convenience.
Vision: TESCO vision involves five components that are explained here, first one is required and
demanded around world another is leading enterprises with more opportunities.
1

Mission: “ TESCO makes things which results better when they are working together.”
Types:
The different types of private organisation are as follows: Sole proprietorship: A sole proprietor is a person who is engage in doing business alone.
He is the person who is only owner of company. (Chang 2016). It is an entity which is
fully owned or managed by one person. It is easy to to establish this organisation as due
to lack of government interferences. Partnership: A partnership is an agreement between more than two persons termed as
partners, as they agree for mutual interests and distribution of profits equally(Cepel and
et.al., 2018). The partners involving in this partnership deed can be individuals, groups of
individuals, schools, colleges profitable organisations and other institutions. Partnership
can be of two types such a general partnership and liability partnership. Joint stock company: Joint stock company is a voluntary organisation with aim of profit
and having capital divided into some transferable shares. Owners of these shares are
members or shareholders of company. Shares of joint stock company are transferable but
investors could have unlimited liability which their personal property can also be forfeit
to pay debts.
Purpose: The main purpose of Tesco is to create valuable things for customers to earn their
loyalty for lifetime. It offers wide range of products and services such as home and grocery
products, insurance etc.
Legal structure: Tesco is a public limited company and corporate governance where people
deals with shareholders to ensure that strategies of Tesco is achieving that shareholders wants to
accomplish. The company is working on reducing the footprints of carbon so that they can
reduce the amount of carbon dioxide that they produce.
Objectives: An objective of Tesco is to provide pleasing working place to workers and targets to
expand their business by increase in sale of organic products. It aims to provide customers with
outstanding service and everything under one roof. Use of intelligence and technology to deliver
high quality goods and provide high returns to shareholders.
Stakeholders: Tesco have many shareholders as employees, investors, management and other
institutions. Tesco has major shareholders such as Barclays, FMR Corp. and Fidelity
international limited etc.
2

Public organisation:
These firm are owned as well as regulated through government and existed to facilitate
services for their public. It do not seeks to produce profitability.
Background of firm
NHS is an organization which is engage in improving the health and well- being of
patients. This helps in improving the conditions of patients. Headquarters of NHS is in London,
England. Parent department of NHS is Department of Health and Social Care with 1.4 million
employees working in this.
Product and services: NHS provides majority healthcare including primary care, in-patient care,
long term healthcare, dental care etc. It provides services free at point of use such as doctor
visits, nursing services, medication, tests etc.
Vision: A vision of NHS is clear that people can live healthier and independent lives with proper
and good quality care which can meet needs and money prospects of population of UK.
Mission: “ To facilitates services as well as cares to individuals and its families when it want to
utilise”.
Types: Departmental Undertakings: Oldest form of public organisation is departmental which
manage state enterprises(Charter 2017). The departmental undertakings also comes under
NHS. In this various departments are being involved like finance, human resource,
marketing and many more. It helps organization in managing work efficiently and
effectively. Public corporation or statutory corporation: It is a corporate body created by public
authorities with defined powers and functions. This types of organizations are been made
up to achieve their goals and objectives. It helps in attaining functions of organizations. Government company: Company which is owned or managed by state and central
government is known as Government company. Management of these companies are
under supervision of an appropriate government. Government companies are whose 51%
of paid up share capital is held by central government or state government or partly by
state and partly by central government(Deasy and et.al., 2016). It can be registered both
as private and public limited companies but management remains in hand of government.
3

Purpose: Purpose of NHS is to provide healthcare advices at free of cost and initiative to take
best decision making and strategic planning. It detail and reduce unwanted changes in healthcare
services and initiate creativity and innovation to provide quality services in future also.
Legal structure: It is a central government organisation which have board of directors, members
and governors. NHS is controlled by Department of Health and Social care. It has several trusts
such as care trusts, mental health trusts and provide special health authorities. NHS England is
now an independent body which means the department of health cannot interfere with their
decisions.
Objectives: Its main aim is to create forum for planning and improvement of whole system.
Objectives of NHS ensure to provide comprehensive range of services and support to its staff
also. It focus to keep people healthy and reduce health inequalities. NHS will respect
confidentiality of patients and ensure a seamless service for patients.
Stakeholders: Stakeholders of NHS receive various benefits from government from its
appropriate government. Its stakeholders are such as trusts, health department, local authority,
and government etc.
Voluntary organisation
These firms are generally the non- profit organisation which are developed for societal
welfare.
Background of firm: Oxfam is considered as one of the charitable firm that is established in year
1942. This mostly concentrates upon international poverty relief, disaster alleviation, policy
research and so on. It was developed in England, UK. The resources on which they are more
focused are economic justice, gender justices and others.
Product and services: The product and services that offered through Oxfam is facilitating home
to those who are suffering from disaster. This develops creative ways for people to over come
from the poverty as well as thrives. So that when ever crisis incurs it facilitates assistance to
rebuild and save livelihoods.
Vision: The vision of Oxfam is “ To develop world without poverty. It want to create the world
in which all people are valued as well as treated in equal way in order to enjoy its life, rights
etc”.
4

Mission: “To aids n making solutions to poverty injustice(Eling and Schaper2017). As this is the
portion of international movement for modification, developing future where poverty do not
exist”.
Types:
There are many kinds of voluntary firm which are explained below: Unincorporated association: This is considered as the company that is established by the
assistance of agreement within group of individuals that come together for many reason
instead of generating profitability(Erasmus Strydom and Rudansky-Kloppers 2016). This
kinds of company do not need any money in order to established into marketplace. Whole
details are give into agreement that required to be comply through members as well as
into the case of contractual stimulation as well as debts they are personally liable for. Trust: This is the corporation that is established for conducting fiduciary agencies as well
as trust. It is owned through three kinds of structures like independent partnership, bank
and law company(Hamilton and Webster, 2018). This is not essential to used whole
power that have provided to them. Generally, there are two individuals beneficiary and
trustee to manage various activities.
Purpose: Respective firm purpose is to develop solutions which are beneficial for the longer
period to injustice of poverty. Moreover, this is the portion of worldwide movement for changing
as well as developing future poverty free.
Legal structure: Oxfam legal structure is Unincorporated association in which agreement is
formed within members. It operate for people instead of profit generating. This is developed for
facilitating assistance to individuals in order to obviate poverty from country. The trustees of the
company are appointed because of their experience and the commitment they have made to the
company. The company is too large and cannot be run as a sole trader. Other forms of ownership
are not suitable for the company.
Objectives: Its main objectives is to utilise combination of several programmes like fair trading,
humanitarian that aids in disputes as well as disaster for developing capacity to manage
electronic waste.
Stakeholders: The several stakeholders of the Oxfam are employees, financial supporters and
many more. It perform together in order to aids them in accomplishing objectives effectively and
efficaciously.
5

P2. Size and scope of several kinds of organisation.
The scope as well as size of several types of firms that are mentioned above are as
follows:
Private firm Size: The size of the respective firm is large as it have about 460.000 number of staff that
are performing within company. It has various subsidiaries like bank, bookers group and
many more. Moreover, it spreads their market in various are of the world in order to
enhance its profitability as well as market share.
 Scope: The Tesco scope is to expand the market where they can sell their products and
service in simple and effective manner. As this is already known as the retailer of the
large market within United Kingdom as well as plan to explore into United State(Kumar
and Pradhan2016). They can expand their business easily into another market whenever
they want to gain more profitability and market share.
Public firm Size: Size of the NHS is large as they employed around 1.5 million people in whole
United Kingdom. They are facilitating frees services to whole individuals who are
resident of UK. It mostly concentrate upon providing better quality goods and services to
its customers. It is known as the one of the best heath care firm which facilitates medical
services to people.
 Scope: The respective firm provides assistance to more than 64.6 million people in UK as
well as 54.3 million at England. In each 36 hours, it deals with about 1 million patients
which involves end life care, emergency treatment and many others.
Voluntary firm Size: The Oxfam is size is small as they concentrate upon people of UK in order to
remove poverty, disaster and many others. They have around 20 independent charitable
company that work into nation for making the area free from poverty.
 Scope: Presently, Oxfam is providing its services within UK for helping the public to
obtain heath care services. This is planning to explore into several area of country as well
as work hard to provide services to people for ending injustice and poverty.
6

P3. Relationship between various organisational function and their relations with its structure
and objective.
In an organisation various departments work simultaneously for achieving organisational
goals and objectives by aligning their self interest in positive manner(Hillary 2017). In context of
Tesco in which various departments gives their contribution and rely on each other to achieve it.
They share knowledge and information to each other that helps in taking important decisions.
There are close relationship in different departments that can be understand by following factors
that are as follows:
Relationship in Marketing and human resource department:
Marketing and human resource not as differ from each other by maintaining the value of
interaction in both these departments that leads the importance of marketing in HR. in today's
fierce competitive world acquiring the talented workforce is one of big and challenging task in
that scenario effective marketing helps to select best candidate at right time(Laudon and
Traver.2016). On other hand marketing department give proper knowledge and information to
human resource department regarding potential consumers base as per market requirement. In
context of Tesco they share proper knowledge and information to each other that ultimately helps
in achieving organisational goals and objectives. That is the reason why Tesco has made it
mandatory for both the departments to go hand in hand.
Relationship in finance and R&D:
There are close relationship in finance and Research and development department to
acknowledge about the needs and wants of consumers and build products accordingly. Finance
department give necessary information and data to research department such as finance available
with organisation so that research department can spend accordingly. It also impart knowledge
about key areas regarding necessary information should be collected by them that ultimately
helps in gaining organisational goals and objectives in positive manner(Lee 2017). On other hand
finance department give necessary information to R&D that areas in which investments proved
beneficial for organisation to get important results for an organisation as well as individual. In
context of Tesco their departments rely on each other for taking effective decisions and relate
their aims and objectives. If finance and the department of R&D of Tesco are not able to work
together then it will be difficult for the company to grow and maintain their operations.
7

Marketing and production department:
marketing and Production department are very important part of an organisation that
helps to balance the demand and supply side of the organisation. It identifies the requirement or
demand of consumers and accordingly build products. In that scenario sales department by
communicating about marketing and production functions in proper manner resulting fulfil
consumers needs and enhance their profitability level. Production department focus on creating
new products, managing quality and quantity of products till delivery to ultimate consumers. On
other hand marketing department give proper information to production department about the
taste and preferences of consumers so that best products should be developed and their goals
should be accomplished. Tesco needs to emphasize on this because without the information of
the expectancy company will waste their resources in productivity. That is why it is necessary for
both the departments to work together.
P4. Positive and negative impact of macro environment
PESTEL analysis Political- Political factors includes governmental policies, taxes, political issues etc.
(Pearson 2017). Political status of UK is the greatest strength for this country. Foreign
Direct Investment is popular where many organisations from around world invested in
industries in UK. The corporate taxes are also reduced from 19% to 17% which will be
beneficial for Tesco also.
Positive impact: Tesco creates employment opportunities in return demand of products increases
and diversifies its workforce.
Negative Impact- Tesco faces the issue of Brexit which is affecting their profitability and it is
getting difficult for the company to maintain their operations. Economical- Economical factors includes interest rates, inflation rates, income rates,
exchange rates, GDP etc. UK is the 5th largest economy in world by nominal GDP. But
recession in 2008 had put economy in trouble, for this UK government took necessary
steps for improvement of economy. Tesco have to aware about changes in any rates and
others rules.
Positive impact: Diversification and position in international market are reasons for success of
Tesco. This company is still dependant on UK market for grocery, its result of recession people
depend upon stores of representative company.
8

Negative impact: Due to decrease in income levels, Tesco shifted focus towards advertising its
value and affordable brands rather than luxurious items. Social- Social factors includes change in culture, demographic factors, healthcare,
income and standard of education etc. Positive impact: Tesco adapting changes by accommodating demand of organic food
with increase in consciousness for food among customers.
Negative impact: It will affect production of respective company due to change UK clothing
trends as well as organic food choices of people. Technological- Technological factors includes innovations and creativeness in
production of products or services(Saleem 2017). The advanced technological
infrastructure offers unlimited opportunities to do business in UK. Tesco embrace
development in technologies as opportunities by adopting available retrial technologies.
They proposed RFID technology to increase in-store work for customers.
Positive impact: Tesco develop online mobile payment system and shopping applications.
Customers can easily shop and tag products. It saves time and labour cost as well.
Negative impact: Development of technologies and their machineries effect environment and in
UK relatively less development than other countries. Environmental- Environmental factors includes awareness related to protection of
environment and other related factors. In UK, Defra is the government to take care of
food industry, animal welfare and environmental issues. The UK government focused on
development of European environmental standards. Tesco is adopting a number of
measures that are aimed to protect environment.
Positive impact: Tesco is committed to use renewable resources, adapt fuel saving routes and
collect unwanted plastic bags to minimize carbon footprint up to 50% by 2020.
Negative impact: Due to infrequent changes in environment production of Tesco can be affected
and wastage level can increase. Legal- Legal factors includes employment laws, labour laws, company laws and others.
Tesco follows every law which is imposed by the government. So that they do not have
to face intervention by the government. Positive impact: To facilitate legal policies, Tesco provides its customers price reductions
on fuel they purchase equal to amount spent on their grocery stores.
9

Negative impact: Tesco can face legal action by employees towards employers for not following
laws related to social and labour welfares and for not providing sound working conditions.
P5.Internal and external analysis of organisation.
SWOT analysis of Tesco
STRENGTHS WEAKNESSES
 It is biggest grocery retailer in the UK.
It has been analysed that the
organization is been earning. Tesco is
at dominant place in grocery retail
market of UK with 4% of market
share.
 This company makes use of advanced
technology. This helps firm in
growing. (Sodeyfi 2016). In this
company can also make payment with
the help of apps. It has made them
better. Tesco has efficient supply chain
networks. It bears profitable
relationships with suppliers.
 The company also has various stores
and super market channels. They target
a large number of people.
 There is a large number of competitors
which has been faced by them. It can
affect their growth aspects. It can also
hamper the profitability growth.
 Tesco is also been facing high amount
of debt because they have made a huge
amount of technological investment.
 Tesco is not performing well in certain
countries as it doesn't carry out market
analysis before entering in the new
market. It has been analysed that Tesco
is not offering large number of variety,
so this has hampered the growth of
company.
 They are also not making use of after
sales services Later Tesco sold them in
a loss.
OPPORTUNITIES THREATS
 Tesco can also involve in expanding
their market in areas. In this they can
also make use of advancing
technology.
 To improve performance it provide
deep market knowledge.
 There is an opportunity to grow online
 In United kingdom it has been analysed
that there has been a huge amount of
terrorist threat. So this can hamper the
goodwill of company.
 Economic recession and credits
continue to threat market share and
profitability of Tesco by reducing
10

shopping for Tesco with option of
home delivery in many areas.
 Tesco can provide better access to
western goods in the UK.
 Tesco can also expand their business in
new countries. This will help them in
increasing the profitability aspects. It
can help firm in growing and even
being better.
number of purchases made by
consumers.
 Labour threats in relation to increased
wages and benefits to Tesco's cost
basis, it puts pressure on its pricing
strategy.
 Also there is a threat related to rules
and regulations given by government.
In this company needs to follow the
rules and regulations.
 There is also a threat related to increase
in operational cost because of making
use of advancing technology.
SWOT Analysis of Sainsbury
Strength
 They are one of the oldest in the
industry.
 They have more than 14,000 stores in
UK.
 The company employs over 1,50,000
people.
Weaknesses
 People feel that their prices are higher
as compared to their competitors.
 Company is facing decline in sales by
8.2 per cent on an annual basis.
 Due to Brexit the retailers are facing
many issues regarding profit.
Opportunities
 Company has more scope to grow in
domestic or international markets.
 They can target the companies who as
low cost of labour such as India, China
so that they can increase their profits.
Threats
 Company is facing huge amount of
threat from their competitors such as
ASDA, Tesco.
 They are loosing their sales against
their competitors because of their
discounted prices.
11

P6. Interrelation of strengths and weaknesses with external macro factors.
External factors such as political, economic, social and technological factors impact
working of an organisation by depicting strengths and weaknesses for achieving targets more
efficiently and smoothly(vomBrockeZelt and Schmiedel 2016). Interrelationship of strengths and
weaknesses with external factors are such as follows:
Political factors- In an enterprise, rules and regulations of government has greater
impact on achieving targets and goals. Some policies of UK are beneficial for production and
service providing of Tesco, this will help to increase sales volume and profits of a company. Due
to many import duties and other policies results in high debts and credit facilities which will
affect its profitability.
Economic factors: Factors such as inflation rates, economic condition of UK and other
rates affect business which will create both strengths and weaknesses for it. Promotion of
grocery products will lead to increase in market share of Tesco with 4%. But recession of UK is
still affecting income levels of population and this will results in high cost inventory for
respective company. This results in costly buyout and not matching attributes with customers,
this will lead to loss for Tesco.
Social Factors: Social factors involves cultural and trends of markets. With fulfilment of
all request regarding social and cultural needs of peoples this will help with more experienced
services. Due to frequent change in taste and demands of population, competitors take lead to
fulfil and this will destroy profit margins of retailers like Tesco. But UK is western cultural
based country which helps respective company to retain and earn highest market share to lead
industries.
Technological Factors: These factors includes innovations and creativeness in
techniques and production of good and services(Teece 2016). Tesco initiates M-commerce by
providing mobile payment app, it enhance optimal shopping for customers. Advanced techniques
for supply chain leads to effective supply of products, this will helps to make profitable relations
with suppliers. But due inappropriate functioning of research and development department and
techniques, it fails to get success in entering markets of different countries.
12

CONCLUSION
From the above report it is concluded that, Business environment is dynamic in nature as
well as various changes take place in this that directly or indirectly impact the firm. Moreover,
this is crucial for company to examine overall aspects before entering into new market place.
This is important to develop effective relation with all another department in order to attain
organisational objectives. Also, Internal factors can be controlled by the firm. In addition to it,
the external factors can effects the company in both the manner positively as well as negatively.
Apart from this, fir getting knowledge about the firm's internal and external factors, they has to
perform PESTLE and SWOT as well.
13

REFERENCES
Books and Journals
Benmamoun, M. and et.al., 2016. Gulf Arab E‐Business Environment: Localization Strategy
Insights. Thunderbird International Business Review. 58(5). pp.439-452.
Calabrese, M. and et.al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective (pp. 223-
240). Springer, Cham.
Cepel, M. and et.al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness. 10(2). p.21.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Deasy, S. and et.al., 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
productivity and efficiency of European life insurance companies. European Journal of
Operational Research. 258(3). pp.1082-1094.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Kumar, V. and Pradhan, P., 2016. Reputation management through online feedbacks in e-
business environment. International Journal of Enterprise Information Systems (IJEIS).
12(1). pp.21-37.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
14

Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Saleem, M.A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of society and space. 8(1).
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3). pp.264-289.
Sodeyfi, S., 2016. Review of literature on the nexus of financial leverage, product quality, &
business conditions. Journal of Economic & Management Perspectives. 10(2). pp.146-
150.
Teece, D.J., 2016. Business ecosystem. The Palgrave Encyclopedia of Strategic Management.
pp.1-4.
vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
management. International Journal of Information Management. 36(3). pp.486-495.
15