Business Environment Analysis: TESCO's Strengths and Weaknesses

This report provides a detailed analysis of TESCO's business environment, examining its structure, size, and the interplay of its functions and objectives. It explores different organizational structures, including divisional, functional, and matrix structures. The report also conducts a PESTLE analysis to identify the positive and negative impacts of macro-environmental factors on TESCO, considering political, economic, socio-cultural, technological, legal, and environmental aspects. Furthermore, the report includes an internal and external analysis of TESCO, culminating in a SWOT analysis to determine its strengths, weaknesses, opportunities, and threats and their interrelationship with external factors. The report concludes with a summary of the key findings and recommendations for TESCO's strategic development within the competitive retail landscape.

BUSINESS AND BUSINESS
ENVIRONMENT

Contents
INTRODUCTION ...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Different types and purpose of public, private and voluntary organization .......................................3
P2 Size and scope of different type of organization ................................................................................5
TASK 2..........................................................................................................................................................6
P3 Inter-relationship between different organizational function and objectives ....................................6
TASK 3..........................................................................................................................................................6
P4 Identify positive and negative impact of macro environmental factors .............................................6
TASK 4..........................................................................................................................................................8
P5 Internal and external analysis of TESCO .............................................................................................8
P6 State how strength and weakness is inter-related with external macro factors.................................9
CONCLUSION ............................................................................................................................................10
REFERENCES ..............................................................................................................................................11

INTRODUCTION
Business environment can be defined as the surrounding in which firm operates and
practice their business activities. It is the sum total of all internal and external factor that has an
impact on function and operation of the company (Asif, Garvare and Ahmad, 2011). It is
important for every manager to taken into account all such factors that either directly or
indirectly affect the working of business entity. It help in formulating effective policies and plans
and implementation of those. The selected organization for this report is TESCO which is the
UK based Retail Company. The company hold second position in terms of generating revenue
after Walmart. The report includes size, scope, structure and purpose of public, private and
voluntary organization. Interrelationship between different organizational functions and
objectives has also been discussed in this report. In addition to that, impact of all external and
internal factors has examined and SWOT analysis has been conducted in order to determine its
strength and weakness and its interrelationship with external factors.
TASK 1

Size and structure of organization shapes the execution of business
activities. The structure of organization depends on how workforce gathered
together and perform viably towards accomplishing association's goal and
objectives. On the other hand size of any firm can be determine through its
market share, number of employees etc. An organization is mainly
categories into 4 types including micro, small, medium and large.
Micro: Such sort of organizations are overseen by 9 or less than individuals
which implies that the span of organization is too little. The primary goal of
this is to procure cash for their survival or satisfying the necessities of their
relatives. Such firms doesn't take after any sort structure in their business.
Eg: Matelife. Total sales of company recorded in last year is upto 9.81 (in m)
Small: Such kind of organizations are exclusive by the sole proprietors,
association or enterprises. The measure of little organizations is nearly
bigger than small scale firms. Employees work under small scale ranges
between 50-100. Their fundamental objective is to gain higher benefits and
keep up the generosity of the organization Different little association keeps
running in various ways which gives them the freedom to choose any of the
structure. Eg: Murrill construction. Turnover of Murrill construction in the year
2017 was 10 to 20 millions.

Medium: Such type of firms for the most part representative specialist up-to
at least 200 than that. Such kinds of organizations are worked with a thought
process to catch huge piece of the overall industry when contrasted with its
opponents. They underscore more on keeping up their solid position in the
commercial center. Eg: Phlexglobal. It's turnover over the last accounting
period was £15.3m.
Large: Such sort of organizations utilize 250 or more remarkable number of
representatives. In some cases the quantity of laborer is obscure which
means the firm is working their business on huge level. Ordinarily, the
structure of extensive firm is lattice structure which is a blend of both
utilitarian and divisional. Eg: TESCO. In 2017, annual turnover of TESCO was
near about £55,917 million.
TASK 2
P3 Inter-relationship between different organizational function and objectives
TESCO is a leading and strong brand that offer large number of product to target
customer all across the world. Their main objective is to increase their profit and generate high
revenues (Gilboy, 2016). Various efforts have been made by company in order to fulfill the
diverse needs and wants of potential buyer in an effective and efficient manner. There are
different departments working in an organization like human resource, sales, marketing etc.
Roles and responsibility of each organizational function is linked with company's objectives. All
department work towards common interest i.e. attaining business goals and objectives in a cost
effective and timely manner. Following are the various organizational function that are
performed by Tesco:
Human Resource Department: The main role of this department is to recruit and select most
talented candidate for the company who with their effective skills and knowledge achieve firm's
objectives. HR manager of Tesco assign roles and responsibility to employee on the basis of their
skill, competency and knowledge. The main objective of Tesco is to earn maximum profit which
can only be possible if they have effective personnel. Organizational growth and success depend
upon the performance and efficiency of workers towards accomplished pre-defined objectives.
Marketing Department: It is one of the most important department that play crucial role in
yielding high profitability ration for the company. With the help of functioning of this
department, Tesco can easily seize the attention of target customer which also assist in gaining
high competitive advantage in the market place. There are various promotional tool that are used
by manager in order to advertise their product in overseas market. With the help of marketing
function, Tesco can make their customer and market base stronger.
Operation Department: The main responsibility of operational manager is to utilize resources
in an optimum manner and to oversee production/ manufacturing of goods and services. As the
primary objective of TESCO is to provide such products and services that fulfill all diverse needs
and wants of customer in an effective manner. Operational manager ensure sooth running of
business services that meets clients expectation in a proper manner.
Types of Organizational Structure:
1. Divisional: Under this, each function of company is categorize into different division. Such
type of organizational structure brings flexibility in business operation. These divisions can co-

relate with either geographies or products. Usually such type of matrix is followed by large
organization which are mainly performing its operation in wide geographic areas. Basically it is
suitable for such companies who deals in several products and each product is having distinct
features. With the application of this structure, functions of such enterprises carried out in
structured and thorough manner. It makes easier for the head division to measure the
performance of each function in the light to contribution made by every single division.
2. Functional: It is the most common and widely used organization structure. Companies groups
personnel according to similar set of tasks or roles. This structure assure operational efficiency as
the task is going to be carried out by collective efforts of all employees. As a result, all
organizational functions are performed in an effective manner. In addition to that overall
productivity and efficiency of each functional manager improves as all are having suitable and
competent staff who carries out all specified task in a proper manner.
3. Matrix: It is a combination of both functional and divisional structure which means that
employee is having dual reporting relationship with manager of functional and product head. It is

a kind of structure of organization where there is more than one line of reporting. Being a large
size company, TESCO is following this organizational structure as it ensure running of all
business activities in an efficient and effective manner in addition to satisfying needs and wants
of consumer as well.
TASK 3
P4 Identify positive and negative impact of macro environmental factors
PESTLE Analysis: The framework is generally used by business enterprises in order to track
various aspects of environment in which they are operating or thinking to launch new product or
services. Commonly there are two factors that affect business and its performance either in
positive or in negative way. PESTLE stands for political, economic, technological, socio-
cultural, legal and environmental factors that possess an impact on overall company's operation
and function. TESCO is a UK based multinational food and retail company operating all across
the world. It is the second largest retail firm in terms earning profit after Walmart. They gain
popularity for selling both food and non-food item. In addition to that they also deal in offering
mobile, insurance, finance, hardware services etc. For understanding the influence of these above
mentioned factors on TESCO's performance, PESTLE analysis can be used below:
Political Factor: This factor determine the extent to which Government Body of respective
country is allowed to impact the economy or a certain industry (Kian Chong, Shafaghi and Leing
Tan, 2011). Political factors compromises of tax rates, political stability in the respective
country, acts of legislation and many more (Li, and et. al., 2011). Recently UK Government has
adopt a tax measure that might affect TESCO. They have increased their VAT rate from 20% to