Impact of Culture, Environment on Tesco: Business Report Analysis

This report provides a comprehensive analysis of Tesco's contemporary business environment. It begins with an introduction to the factors affecting business decisions, highlighting the importance of understanding both internal and external environments. The main body delves into the impact of culture, natural environment, and the broader business environment on Tesco's operations. It examines economic factors such as inflation, unemployment, and Brexit's impact, along with non-economic factors including cultural influences, leadership strategies, and employee motivation. The report also explores the natural environment's influence, including resource management and sustainability. It incorporates SWOT and PESTLE analyses to provide a structured evaluation of Tesco's strengths, weaknesses, opportunities, threats, and the political, economic, social, technological, legal, and environmental factors affecting the company. The report concludes by summarizing the key findings and emphasizing the importance of adapting to the changing business landscape to maintain a competitive edge and satisfy customer needs.

CONTEMPORARY
BUSINESS ENVIRONMENT

TABLE OF CONTENT
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................4
Impact of culture, natural environment and business environment on organization................................4
SWOT.....................................................................................................................................................7
PESTLE...................................................................................................................................................8
CONCLUSION...........................................................................................................................................9
REFERENCES..........................................................................................................................................11

INTRODUCTION
There are a lot of factors which have to be understood before making any decision for the
company because that will directly or indirectly affect the effectiveness of the organization.
There are internal and external environment of the company which have to be understood and
analysed by the businesses in the market so that they can make decisions which are going to be
effective for a long run. Depending on the size of the business the economic and non economic
factors are going to have an impact on the company. It is very important that the company knows
those factors well of the country so that they can price the products and improve the quality
according to the customers of that specific country. The leaders of the company and the
managers have a very essential role to make the company change the working of the company
effectively so that the company can have a better functioning and the organization will be able to
have a better competitive advantage for a long run.
It is very important for the company to innovate and invent products in the market so that
they can improve the satisfaction level of the customers which is going to be very helpful for the
organization for a long run. External environment factors are the political factors, social, legal,
technological, economic, etc are those factors which can affect the business directly and
indirectly which have to be considered by the organization so that there is a better functioning.
The competition in the market is increasing which is why they have to understand the internal
factors of the company so that they can make improvements in the organization accordingly so
that they can get a competitive advantage and make the employees work effectively.
The report would consist of business environment of Tesco and the internal and external
factors which are affecting the company’s working. The aim of the company is to make the
customers have a better satisfaction level of them and by understanding the internal and external
factors is a very essential factor for the company. The strategies and planning of the company is
done accordingly so that they can have a better functioning which is a very essential factor for
the company so that they can get a competitive advantage and make the profit margins higher.

MAIN BODY
Impact of culture, natural environment and business environment on organization
It is very important for all the industries to understand the business environment so that
they can make decisions accordingly in the company which can be very helpful for the company.
There are a lot of factors internally and externally which can make the productivity of the
company fall or rise and to keep that in mind and then make decisions will make the company
have higher revenue and reputation in the market. The quality of the company will also not fall
and employees of the company will have a better sense of direction in market for the functions
they are doing (Kumar and et al., 2020). The leaders and managers of the company have to be
effective and experienced so that the changes in Tesco can come in easily which is going to be
very beneficial for a long run of the company. The behaviour of Tesco has to change with time
which is going to make the customers of the company have a higher competitive advantage
which is going to be very helpful for the company for a long run. Satisfaction of the customers is
what Tesco is aiming for which has to be fulfilled only when the company can get in the changes
easily in the company so that there is a better functioning.
ECONOMIC ENVIRONMENT
Business organisations which are running to earn profit are economic motive business
organisation. There are different factors in the external business environment and internal
business environment which helps to increase the efficiency to increase economic growth
effectively. Economic factors are determined for a whole market which also helps to increase the
productivity to attain more revenue generations. This is also very important for business to
evaluate all the factors which increases the opportunity to expand their size of Tesco in market.
Increase in the inflation rates in UK market has impacted Tesco to increase its performance as
the cost is increasing (Pantano and Gandini, 2018). Increase in unemployment rates reduces the
income level of customers to spend. This also impacts the job satisfaction of employees due to
lack of proper business approach which increases employee turnover in the business negatively.
Due to lack of proper training and develop of employees this also increases the operational cost
of Tesco to develop high quality products and gain better profit margins. There are many
products which increases the competition of Tesco and company also lack high performance
culture which decreases the economic activities of company to compete in market and achieve

core competency effectively. UK is also high economic generation market for the company and
it is very essential for the company to develop effective strategic and marketing plan to utilize all
the available resources effectively to attain higher profit margins. Brexit impacts the company
adversely as it increases the import export duty for all the business industry and due to instability
of government it has also increases the risk of loss in the market. The taste and preferences of
customers changes due to change in lifestyle and less disposable income in market. This also
impacts the sales of industry as a whole and increases the prices. Company can reduce their
prices to services in the recession and grow gradually.
Non- Economic Environment
Cultural Environment
Culture of business organisation is very essential to achieve the objectives by gaining
high performance working environment which motivates employees to increase their efficiency.
Tesco is also using effective value driven culture which helps employees to work with more
efficiency and increase communication within the organisation effectively. Tesco also adopted
effective leadership strategies which help top increase the performance of employees by
influencing them to improve their willingness to finish work on time (Efstratiadi and et al.,
2019). Tesco has effective leaders which uses different styles according to the situation to
motivate employees. Company develops training and development programs, incentives,
recognition. Company also implemented motivation theory and focuses on hygiene factors by
providing better employees benefits like health and safety to increase their job satisfaction
effectively. It is very essential for Tesco to determine all the factors which reduce the
performance and develop effective strategies which integrate with the vision of company and
increase shared value of employees effectively.
Tesco is having a good internal environment by following the culture of all the
employees and by providing them what they need so that the company can function effectively.
The decisions and strategies which are being made in Tesco are according to the employees of
the company so that there is a better functioning and the employees of the company can give
their best in the organization. It is very important for the employees to give their best because
that will fulfil the needs and demands of the customers which have to be present so that they can

achieve their targets on time. Tesco has expanded themselves in a lot of locations which is why
the company is having a high demand and to meet that the employees must be given what they
need. There are incentives and extra privileges which are being provided by the company so that
the employees can give their best in the company. Feedbacks are being taken by the leaders and
managers of Tesco so that if there is a need of improvement then the company will be able to do
that effectively. There is a sense of flexibility as well which can be seen in the company so that
there is an effective functioning of the company which will make the reputation of the company
more effective (Sai, Sevruk and Tunitska., 2018).
Attitude of the employees is very positive in the company because there is a balance
between the personal and professional life which is visible in Tesco. Employees of the company
are getting a fair treatment and equal rights to all the employees of the company which is why
the company is not having a high turnover and there are skilled employees working in the
company which makes the productivity of the company more effective. There are no language
barriers in the company because there are translators which are kept in the company so that the
company can have sense of direction in which they must function so that they can have an
effective functioning (Yi, 2016). The employees are always ready for changes like technology
which takes place in Tesco all the time so that there is an effective functioning.
Natural Environment
It is very essential for business to determine the natural environment to plan all the
activities and increase the performance of the organisation effectively. Tesco needs to examine
the resources which are Available due to increase in awareness of environmental protection
globally can reduces the goodwill of the company and reduces the efficiency to gain higher profit
margins (Nguimkeu, 2016). Natural environment can also reduce the efficiency of company to
sell their products. It is very essential for company to invest in research and development and
analyse the behavioural patterns, needs and wants of customers to produce better products and
satisfy them effectively. Increase in the sustainable products and demand of healthy food
products it is big opportunity of Tesco to increase its market share and compete in market.
Change in seasons also impacts the business demand of products so company has developed and
innovated products which creates constant sales to increase the efficiency of company. There
many factors which also impact UK market due to natural environment and it is very important

for Tesco to analyse all the resources to reduce the threat of natural factors as they cannot be
controlled by business activities. But by formulating effective business plan it can be avoided
effectively.
It is said by a lot of environmentalists that the financial performance of business are
being affected by the weather by at least 70%. There are limited resources in the world which is
why Tesco will have to use them wisely so that there is a better functioning and the company
will be able to have a long run in the market. There have to be alternative resources and materials
which can be used to produce the products so that there is a better functioning and the company
will be able to satisfy the customers for a longer run. Tesco is making policies so that they can
maintain the internal environment and the external environment of the company which is going
to be very helpful for the company’s long run in the market. The company has expanded
themselves in a lot of locations so that they can reach out to the customers from time to time
which are going to be very helpful (Yang and et al., 2017). The channels which Tesco has
created for themselves over years are very strong which is helping the company to reach out to
the customers from time to time which is going to be very helpful. The climate factors are not in
control of the company but if they have waste disposal and other harms to the environment for
the climate change then it is going to help them only for a long run. The company has zero
carbon footprints and have adopted a lot of other strategies so that they can save the environment
from getting harmed and that is going to be very helpful for the organization in having a long
term. The reputation of the company will also improve and the customers will also get attracted
in the company and the satisfaction level also improves.
SWOT
 Strengths
The company has a strong portfolio for themselves over the years which have made the
company have a strong base for Tesco. Tesco has taken patents license agreement so that the
company develop their products in the market and the company can have a unique factor for
themselves which is going to be very helpful for the company for a long run.
 Weaknesses

The company did not have an experience to understand the customers and priced their
products according to the raw material which the company used which made the company sell
products at a misfortunate price, example Giraffe eatery. The pricing of the products have to be
better so that the company can have a better growth and the cost of the company can also be
maintained.
 Opportunities
The company has a great opportunity for expanding themselves globally and have a better
segmentation for getting more customers in the company (Arrieta Paredes, Coca-Stefaniak and
Hallsworth, 2018). Online is a great opportunity for the company because that can make Tesco
get more customers which is going to make Tesco have high profit margins which is a great
competitive advantage. There is a lot of technological advancement in the company which is
why the demands of the customers will also be met on time.
 Threats
The greatest threat for Tesco is that the competition in the market is increasing which has to
be taken care of by Tesco so that they can get better market share. The company has to get loyal
customers in the company so that they do not lose the customers and the profit margins can be
maintained. Due to Brexit the company has already lost a lot of customer base which has to be
filled by the company by promoting and adapting to new strategies.
PESTLE
 Political Factors
There are a lot of countries which are having free trade policies which is a great factor for the
company and advantage can be taken by Tesco by expanding themselves in those countries. Due
to Brexit the company has lost a lot of customers but there are more chances for the company to
expand themselves in other countries and the uncertainty in the organization has gone.
 Economic Factors

There are a lot of countries where the labour wages is high which makes it difficult for the
company to provide the customers the products at a low rate (Cao, 2018). The products have to
be given to the customers at a low rate so that there is a better functioning. The exchange rate of
currency can also affect the pricing of the products of Tesco which have to be considered.
 Social Factors
A lot of customers have got socially active which is a great advantage for the company so
that they can get more customers by getting online themselves. Customers will find it easier to
reach out to the company and the organization will be able to maintain their standards and profit
margins (D’Antone and et al., 2017).
 Technological Factors
There is a lot of improvement in the technologies which are being used in Tesco so that the
demands of the customers can be met which can make the company have a better base for
themselves. Mobile payment is also available so that the customers can find it easier for
shopping with Tesco.
 Legal Factors
There are strict privacy measures which are taken in Tesco so that they do not give out the
information of their customers to other companies or anyone else. The laws and copyrights are
issued by the company from time to time so that they can maintain their internal environment.
 Technological factors
There is no dependency on plastic in Tesco because they have zero carbon footprints in the
environment and there are measures which are taken by the business so that they can have a
better functioning.

CONCLUSION
This report concludes that it is very essential for business to understand all the factors to
formulate effective strategies to increase the potential. Report also helped to analyse
organizational behaviours to increase the efficiency of the company. Report also explained all
the business environments which increase the efficiency to compete in the market and gain profit
margins with them. It discussed different environmental analysis tools which helped to gain
effective information about the market. This helped business to formulate better strategies and
reduce all the issues in the organization. With the help of internal analysis business also
supported cultural values to increase the performance to achieve objectives. It was also analysed
that there are different environments in the market which influence the business activities.
Economic environment which helped to understand all the activities related to finance and non
economic environment also provided information which helped to increase the opportunity to
attain core competency in the market and gain higher profit margins effectively. Tesco is a very
successful company in United Kingdom because of the experience it holds in the industry and
knows the competitors so well.
It can also be concluded that Tesco is having a well planned strategy and measures for
themselves so that they can function effectively in the market. The company has understood the
needs and demands of the customers and follows the trends of the customers as well so that the
company can fulfil them from time to time which are going to make the company have a loyal
set of customers coming in the business. The internal and external factors of the company are
planned out and analysed therefore the company is being able to take such decisions for
themselves which are so effective in nature. There is a need for the internal environment of the
company to be strong so that the company can have a strong outside impact on the customers
which is a very essential factor for Tesco because the competition for the business is increasing
with time. There is a need for the customers to have the awareness for the changes which the
company is getting in the company so that Tesco can have a better customer base for them in the
market.

REFERENCES
Books and Journals
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food retail industry: A UK case study. Energy. 174. pp.1133-1144.
Kumar, V and et al., 2020. Examining the relationship between social media analytics practices
and business performance in the Indian retail industry: The mediating role of customer
engagement.
Nguimkeu, P., 2016. Some effects of business environment on retail firms. Applied
Economics. 48(18). pp.1647-1654.
Pantano, E. and Gandini, A., 2018. Shopping as a “networked experience”: an emerging
framework in the retail industry. International Journal of Retail & Distribution
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Sai, D.V., Sevruk, I.М. and Tunitska, J.М., 2018. COMPETITIVE STRATEGIES IN RETAIL
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MODEST ECONOMIC GROWTH. Scientific Bulletin of Polissia. 13.
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repurchase intention in a multi-channel (online-cum-mobile) retail
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Yi, J.H., 2016. 5 Consumption Liberalization, Aggressive Consumers and Active Retail Industry
in Rapid Economic Growth since the 1980s. In History of Korean Modern
Retailing (pp. 139-172). Brill.