Business Environment Analysis and Strategic Recommendations for TESCO

This report provides a comprehensive analysis of TESCO's business environment. It begins with an introduction to the business environment and the company's background, including its legal structure as a corporate governance entity. The report then examines various organizational forms (private, public, and voluntary sectors) and their purposes, scope, and size, using TESCO, the NHS, and Oxfam as examples. The report also explores the interrelationships between different departments within TESCO, such as HR, Finance, R&D, and Production, highlighting how effective coordination contributes to overall profitability. A PESTLE analysis is conducted to assess the macro-environmental factors influencing TESCO, including political and economic aspects. The report concludes with a SWOT analysis, identifying the company's strengths and weaknesses, and relates these to external macro factors. The analysis underscores the importance of understanding both internal and external factors for strategic decision-making and sustainable growth in the retail sector. The report also includes references to support the analysis.

Unit 1

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various forms and purpose of voluntary, private and public organisation............................1
P2.Scope and size of various kinds of entities............................................................................3
TASK 2............................................................................................................................................7
P3 Interrelationship among various departments within company.............................................7
TASK 3............................................................................................................................................9
P4 Macro environment positive as well as negative aspects.......................................................9
TASK 4..........................................................................................................................................11
P5. Strength and Weaknesses identification of entity with the help of internal and external
analysis......................................................................................................................................11
P6 Strengths and weaknesses interrelate with external macro factors......................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment is a combination of different external as well as internal elements
that are influencing functions and activities of organisation such as management, employees,
consumers, demand and supply and business regulations. In order to overcome impacts of these
factors it is essential of organisations to duly have proper understanding of influence of these
elements upon business functioning (Chaouk, Pagliari and Moxon, 2020). This will lead entity
towards assuring long term sustainability and maximum growth. Present report has been
conducted on TESCO, company operates in retailing sector and was established in 1919. TESCO
is a British multinational grocery and general merchandise unit which is offering high quality
services and products to customers.
Present report includes discussions upon different companies in distinguished sector, size,
scope , structure and legal structure. Further this project revolves around Swot and Pestle of
companies so as to determined conditions of internal and external environment. In addition to
this, formative relationship among different functional unit of company is also being given in
this report. Lastly, strengths and weaknesses interrelate with external macro factors are also
given in this report.
TASK 1
P1 Various forms and purpose of voluntary, private and public organisation
There are number of organisation operating their business roles and functioning in
different sector like public, private and voluntary with different size, scope, aim, purpose and
legal structure which is mentioned below:
Private sector:
Private sector organisations are being owned and effectively managed by private
individuals or groups (Künle and Minke, 2020). Main aim of these units is to earn large base of
profitability. Funds to operate business functions are being acquired from bank loans, investors,
financial institutions and more.
For example: TESCO is performing their business activities in retail sector, company aim
towards having high growth, sustainability and profitability in market.
Purpose:
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TESCO have an important purpose in which they engages in the process of maintaining
the leading brand image in market. For this they serves their customers with high quality
offerings.
Legal Structure:
Sole proprietorship:In this owner is a sole individual who have whole responsibility for
losses and profitability.
Partnership:Within this, two or more than individuals entered into an partnership
agreement to conduct their business operations with agreed liability to share profits and loss.
Company: Within this, organisations mainly offer share to public via IPO as to have high
profit earnings.
Legal structure of TESCO: This has been identified that TESCO legal structure is “
Corporate governance”. It has been evaluated that individuals in this sector mainly deal with
shareholders in order to fulfil company objectives.
Public sector:
Organisations within this sector have common aim which is to serve customers with high
quality offerings rather than earning profit (Golubkina and et. al., 2020). Customer satisfaction
is primary objective of public companies.
For example: NHS is offering public healthcare services to individuals within UK.
Purpose: Consumer satisfaction is most important purpose of NHS, for which they offer wide
range of qualitative services in affordable price range.
Legal Structure: These organisations are basically owned, managed and run by authorities of
government.
State Government: These entities are basically wholly or partially managed or owned by
authorities and institutions of state government.
Local Government: Companies within this are mainly administered by institutions and
authorities of local government.
Central Government: Central government are responsible for controlling and managing
of entities within this segment.
Legal Structure of NHS:
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The legal structure of the NHS is substantially governed by the present version of the
National Health Service Act 2006 (“the NHS Act”).
Voluntary organisation:
Organisations within this segment are performing their activities on voluntary basis as to
provide community and individual with humanitarian services. Funds in these units are mainly
comes as donations from private entities.
For example: With having confederation of 20 organisations Oxfam is providing wide range of
humanitarian services to individuals and communities in affected areas.
Purpose:Oxfam is having main purpose to serve individual by maximising their standards of
living.
Legal Structure: Legal structure is discussed below:
Unincorporated Organisation: This is basically a agreement in which some individuals
group are responsible to acquire high profitability as to fulfil common goal.
Trust:This is basically formed as a formal agreement within two individuals those who
provide rights that are associated with property (Ai and et. al., 2020).
Limited Organisation:Within this, only limited individuals posses rights in company.
Legal Structure of Oxfam:
Legal structure of Oxfam is a form the Council of Trustees, which is the governing body
of the Association of Oxfam (a not-for-profit limited-liability company).
P2.Scope and size of various kinds of entities
There are different types of organisations those who are offering their business services
in sectors like public, voluntary and private with different aim, mission, scope and size.
Mentioned below three different organisations within different sectors are being defined:
Public organization
NHS
NHS ( National Health Services ) is one of the most recognisable public funded
healthcare organisation in UK. This entity is engaging in the operations of serving customers
with high quality heath care services.
Size:
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NHS is operating their healthcare services with having 1.7 million staff. The four national
services has a total of 2,165,043 healthcare workforce across UK. Further it has been evaluated
that, NHS is large scale organisation.
Scope:
NHS is having wide scope, as they can also offer customers outside UK and can satisfy
them with high quality services.
Vision:
NHS is having vision to serve their customers with high quality healthcare services in
order to effectively treat every patient with dignity and respect.
Mission:
Main mission of NHS is to offer services to individual in proper ethical standards as to
maintain loyalty of entity among customers.
Organisation structure:
Figure 1NHS organisational structure
Sources: Organisation structure of NHS, 2019
NHS organisational structure increases company management of objectives and goals, as
in this company maximise their effectiveness of end outcomes by performing their activities and
functions in effective manner.
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Private Organisation
Tesco:
TESCO is a leading multinational organisation which is operating their business services
in retail segment. This company is offering wide range of products as well as services to
customers with of high quality.
Size:
TESCO is a multinational organisation and are conducting their business with more than
450,000 employees those who are performing their services in 6,800 shops (Arun, Saleel and
Jayaraj, 2020). TESCO offer their products and well as services in many countries across Europe
and Asia. TESCO perform their business operations as large scale organisation.
Scope:
TESCO is having wide scope as they can serve maximum number of customers with he
help of digital platform.
Vision:
TESCO have a vision which is to maintain their leading position in retail industrial sector
and ensure long term sustainability.
Mission:
TESCO is operating their business operations with having a core mission which is to
serve customers with high quality products and services for all income group of individuals in
order to ensure long term sustainability.
Organisation structure:
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Figure2: TESCO organisational structure
Sources: Organisation structure of TESCO, 2019
Above mentioned organisational structure states that TESCO perform their business
activities in systematic manner which increase business efficiency of company at great extent. In
addition to this, it also increases effectiveness of TESCO communication efficiency.
Voluntary Organisation
Oxfam
Oxfam was founded in the year 1942, this company is mainly operating their services as a
voluntary organisation as it is engaging in the operations of removing poverty from all around
the world and increasing standards of living of individuals (Molthan-Hill and et. al., 2020).
Size:
Oxfam is a confederation of 20 charitable organisations. They are mainly offering their
services with more than 3500 partners.
Scope:
Oxfam is having wide scope, as they are having opportunity to serve maximum number
of individual and remove poverty from all around the world.
Vision:
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Company is operating their business operations with a vision which is to eradicate poverty and
enhance living standards of individuals.
Mission:
Main mission of company is to offer humanitarian services to individuals at around the world.
Organisation structure:
Figure3: Oxfam's organisational structure
Sources: Organisation structure of Oxfam, 2019
Thus, it has been evaluated that by operating their business operations according to this
structure Oxfam assure accomplishment of their business objectives with great effectiveness. In
addition to this, it has been underlined that this structure enhance effectiveness of company end
outcomes.
TASK 2
P3 Interrelationship among various departments within company
An organisation conduct their business activities and operations by having many
departmental units. All these heads are authorized with different types of responsibilities and
roles as to fulfil common goal and objective of entity. Thus, in order to ensure maximum growth
it is essential for TESCO to make sure that there is formative coordination within all departments
as to gain successful outcomes for higher profitability.
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Illustration 4: Organisational Structure
(Source: Organisational Structure, 2019)
HR and Finance Department:
Human resource department are having responsibilities to hire, select, and place right
individuals at right place in different departments of organisation. While, finance department
holds responsibilities to identify various sources of funds and acquire them as to assure smooth
operations of company without any shortage of funds (Keszey, 2020). This has been identified
that HR department serves finance unit by providing them highly talented individual, it increases
performance of finance unit. While, finance provide appropriate funds to HR department for
their recruitment, selection and training activities that aid HR unit to fulfil their objectives. This
aid TESCO to generate higher profitability and productivity.
R& D and Production Department:
In an organisation research and developing unit is authorized with the role to engaging in
extensive research as to allocate essential informations related to competitors strategies, market
trends, customers behaviour. This aid entity in decision-making. While production department
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produce high quality products according to customers expectations that increase loyalty base of
consumers towards company. It has been evaluated that R&D department aid production unit by
providing them informations related to actual taste and preferences of customers it increase
production department efficiency (Zhu, Peng and Deng, 2020). While on the other hand,
production department benefit R&F unit by accompanying accordingly to their provide
information and producing same products. It significantly increase visibility and effectiveness of
R&D unit. With the help of this interrelationship TESCO conduct their business operations with
high effectiveness.
Thus, as per according to given analysis it is evaluated that effective coordination and
cooperation between TESCO increases company profit earning capabilities. With the help of this
interrelationship respective entity can gain more competitive advancements and growth.
TASK 3
P4 Macro environment positive as well as negative aspects
It has been evaluated that retail sector in which TESCO is operating their business
operations are being affected with many factors which is prevailing in different aspects. This
makes entity to undertake advantage of effective strategies and policies in order to take
advantage of opportunities from them:
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Political: This aspect of Pestle analysis includes taxation policies, government regulations,
political impacts and labour laws (Du and Li, 2020). TESCO is required to have proper
understanding of different rules and political situations of country as to conduct operations in
effective manner.
Positive:
Strong as well as positive relationship with UK government authorities lead TESCO to
gain many business advantages that will further assists company towards higher growth and
profitability.
Negative:
Negligence of government policies as well as guidelines will affect TESCO in number of
ways. This will also impact upon company brand goodwill in respective market.
Economical: In this factors like interest rate, lending rate, borrowing rate etc. are affecting
organisational operations in many ways. For this strong economic measures and well as
strategies will assist company to effectively overcome economic fluctuations.
Positive:
UK economic growth and country strong economic structure will aid TESCO to conduct their
business operations in cost effective manner. Through which entity can maximise their overall
profitability.
Negative:
COVID-19 make countries to suffer from serious economic disruptions. It maximises borrowing
as well as lending rates that will impact upon TESCO many operations like raw material
purchase, procurement rate and transportation cost.
Social:
This element includes perceptions, values, believes etc. of society and individuals, these
factors are having major impact upon company operations. Thus , it is essential for TESCO to
effectively analyse and understand perceptions of society in order to gain more advantages:
Positive:
TESCO is providing services and products to customers by evaluating their actual
perceptions, values and sentiments. This increases loyalty among consumers towards
organisation that automatically lead entity towards higher growth and profitability.
Negative:
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It is essential for TESCO to ensure that they their business operations does not affect
believes of components (Muslihuddin and et. al., 2020). As by hurting their sentiments TESCO
can lead towards facing serious backlash from community.
Technological: Technology is evolving at fastest rate which is being adopted by number of
companies in order to gain more profitability and competitive advancements. With the help of
technological updates TESCO can assure higher growth in respective segment.
Positive:
By adopting 5G and AI prior to their competitors TESCO can serve more number of
customers that will further enhances their competitive base.
Negative:
In order to implement advances technologies TESCO needs to make high funds
investments and are also requires to borrow money from different institutions (Kim, Kim and
Cui, 2020). However, because of COVID-19 there is significant increase in borrowing rates that
will disrupt profitability of company in adverse manner.
Legal:
It is important to all the organisations to abide all the essential legal rules as well as
regulations associated to their industry in order to operate their business functions in legal ways.
As negligence will make TESCO to face many legal penalties.
Positive:
By taking advantage of legal experts TESCO can assure that company is abiding all the
essential and necessary regulations. It will enhance that brand image and goodwill in respective
market.
Negative:
TESCO if neglects any essential legal measure can face many legal consequences and
heavy penalties which can further affect their profitability in number of ways.
Environmental :
It is essential for all the organisations to have positive attitude towards environment. For
this it is essential for TESCO to take use of strategies through which they can reduce
organisational activities impact upon environment.
Positive:
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With having positive contribution towards environment TESCO can ensure more
sustainable growth. Green technology will also aid entity to develop their positive brand image
within community.
Negative:
As there is more emphasise of customers and government towards environment
protection, it is essential for TESCO to have significant contribution in protecting environment.
As negligence of this can decrease company brand image and profitability.
TASK 4
P5. Strength and Weaknesses identification of entity with the help of internal and external
analysis
External and internal environment includes diverse range of factors that are having
significant impact upon profitability and productivity of business organically. Thus, it becomes
essential for company to effectively evaluate weaknesses and strength of all the factors in order
to develop strategies against them (Zhang, Zhang and Han, 2020). For this, SWOT analysis
proves to be an essential tool that allow entity to evaluate their weaknesses, strength,
opportunities and threats in respective manner:
SWOT analysis of TESCO
Strength Weaknesses
 TESCO is offering qualitative
products and services to consumers
for all income group of consumers.
This increases visibility of company
in marketplace that ensure its long
term sustainable growth.
 Due to lower level of investments in
digital platforms TESCO is lacking
behind from other rivals in respective
market segment. This aspect is acting
as main weakness for company.
Opportunities Threat
 TESCO by maximising their market
reach via online marketing and
 Higher economic fluctuations because
of Covid-19 makes TESCO facing
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business growth can gain opportunity
of expansion that enhances their
profitability at great extent.
threat of lower revenue generation that
can also affect their overall
profitability.
SWOT analysis of NHS
Strength Weaknesses
 NHS satisfy their customers with
highest number of employees those
who posses effective skills and
expertise (Du and Li, 2020). This factor
plays important strength for entity as it
assure long term loyalty from
customers.
 High quality services makes NHS to
increase their operating costs, it
significantly maximise profit reserves
and overall profitability of company.
Opportunities Threat
 Strong brand image maximise growth
opportunities for NHS through which
they can expand their business
operations in other market area for long
term growth.
 NHS is facing threat from many small
and medium players in respective
industry, those who are attracting
customers with affordable price
services.
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P6 Strengths and weaknesses interrelate with external macro factors
In relation with TESCO, mentioned below there some certain form of weaknesses as well
strength given:
Political
It has been evaluated that politics and government practices and policies are influencing
operations of company at large extent (Shtangeeva, Viksna and Grebnevs, 2020). Thus, it is
essential for company to conduct functions by aligning within government standards.
Strengths:
With having strong relationship with government authorities TESCO can assure long
term growth and sustainability in market.
Weaknesses:
Political disparities as well as rise in corruption rate are posing threat upon TESCO
business operations that will lead entity towards facing huge loss.
Economical
It has been evaluated that, due to CVOID-19 countries around the world are facing
economic disruptions. This makes TESCO to undertake advantage of strategies for generating
higher profitability.
Strengths:
By taking assistance of government tax relaxations TESCO can operate their business
functioning while assuring effective profit reserves.
Weaknesses:
Covid-19 adversely impacted upon economies around the world, this will affect many
operations of TESCO like transportation, acquiring of raw material, labour and more.
Social
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Individuals within community or society values, culture and beliefs are playing major
role. Evaluation of this lead organisation to serve large base of customers that assures higher
profitability.
Strengths: By offering high quality services and products under affordable price range by
identifying customers values and beliefs will aid company to ensure higher consumer satisfaction
and loyalty.
Weaknesses:
Preferences and needs of customers are changing in a dynamic manner, this requires
extensive research by TESCO which further needs high investments.
Technological
It has been evaluated that technology is changing on fast basis which is being adopted by
number of organisations for higher competitiveness, this increases competition base (Troiani and
et. al., 2020). Thus to overcome this mentioned below there are some strength and weaknesses of
TESCO for more competitive advancements:
Strengths:
5G and Artificial intelligence will benefit TESCO to gain more competitive
advancements in respective sector while serving consumers with best innovative services.
Weaknesses:
In order to adopt adopt high-tech technology and innovative processes, management of
TESCO requires to make high capital investment that can further adversely affect their budget
for other operations.
CONCLUSION
As per the above mentioned report this is being concluded that, business environment
include different types of elements that affects operations of company in negative and positive
manner. Proper understanding of these elements lead entity to gain advantage of prevailing
opportunities by overcoming negative influence of these factors upon company operations. In
order to identify opportunities SWOT and Pestle analysis aid entity in number of ways. This will
also benefit them to maximise performance efficiency of company. It has been determined that
for higher growth it is essential for an organisation to make sure that there is effective
interrelationships prevails within all departments, as this brings coordination and operation into
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operations. This will lead company to ensure higher growth, long terms sustainability and
maximum profitability.
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