Comprehensive Analysis: Tesco's Business Environment and Governance

This report provides a comprehensive analysis of Tesco's business environment, focusing on the application of PESTEL framework and its impact on the company. It explores Tesco's corporate governance structure, emphasizing the roles and responsibilities within the organization. The report delves into the political, economic, social, technological, environmental, and legal factors influencing Tesco's operations, including the effects of Brexit, interest rates, and demographic variables. It highlights the importance of these external factors in shaping Tesco's strategies, such as their digital transformation, waste reduction initiatives, and legal compliance. The conclusion summarizes the significance of understanding the business environment and the value of PESTEL analysis for strategic decision-making. The report also references academic journals and books to support its findings.

Business Environment

INTRODUCTION
Business environment Is a broader and wider concept
which is need to be understood as well as adopted by
organisation in most efficient way so that goals and objectives
are achieved with proper manner. Tesco largest supermarket and
Multinational Corporation and headquartered in UK. The
company deals in variety of products such as cosmetics,
groceries, consumer goods etc. Tesco is a globally located
organisation and is also considered as a business leader in the
supermarket industry. It is defined as combining of internal and
external factors that affects the functions of operations and other
activities of business as well as regulations.

Tesco corporate governance
and structure
Corporate governance within the business is
defined as body or set of rules, regulations,
practices and other processes which of these
entities are being governed. This also includes
distribution of rights and responsibilities by all the
members within the enterprise. Governance at
TESCO ensures that everyone in firm follows a
proper decision-making process so that interests of
all the stakeholders are being protected (Čepel,
2018).

• Purpose of Corporate governance-
• Main aim of corporate governance is to assist in
achieving long term success as well as economic
growth and development.
• It has a positive impact on price of shares as
because it develops the trust within the market.
(Frei, 2018).
• Moreover, corporate governance purpose is to
give guidance and direction to the owners and
managers about the strategies and tactics of
business.

• It has also seen that structure of TESCO, is been monitored
and regulated by the head of administrative staff and then
comes in middle level in which board of directors and
shareholders are included. In this members which are to be
known as assistant manager vice president, general
manager etc. The board meeting co-ordinate their functions
as well as operations of their members and departments
and accordingly they fulfil responsibility.
• Then at the low level comes regional manager executive
personnel department, trading and non-trading departments
etc. It is a broader concept and it is responsibility of the
HR manager to make ensure that the procedure and
activities as well as decision making is done in most
effective way without facing any problems or issues.

Importance of
PESTEL analysis
• Weather the entity is annuity based business or established one
reviews of this Pestle Analysis it help them and every
entrepreneur in identifying various changes within the business
sector and which also assist in identifying of risk as well as
issues in future perspective.
• It also helps in identifying and implementing strategic
planning as well as how to expand the business using the same.
• Furthermore, framework could be used for controlling the
activities and roles such as marketing, sales and accounts.
• This model helps manager to use information and resources
with correct measures and at the time when they are required.

PESTEL framework
• It is a tool used by entities to identify which factors
affecting the business activities. This is the most
beneficial model adopted by the organisations to
understand the changes within the environment and make
the decisions to achieve the goals and objectives. When it
is used by the marketers, they need to be active and aware
about the responses which are to be made at the right
time and with proper measures. Also, this analysis gives a
brief overview of business environment how it can
change the structure of management (Shatskaya, 2016).

• Political factors- This includes governmental, Labour law, text
policy foreign trade policy trade restrictions etc. It specifies the
involvement of government and how it regulates the economy.
In relevance with Tesco, the impact of Brexit slows down the
growth and business operations as well as other activities of
company has it become difficult for them to run their activities
at global level.
• Economic factors- This involves inflation and deflation rate
interest rates disposable income of consumers and business etc.
In this involvement of government is more and it is
uncontrollable by the firm. In relation with the selected
enterprise, interest rates are changeable and dynamic within
the market which makes it difficult for company to export and
import the raw materials. These factors distract the entities
from their roles and responsibilities which are to be considered
at priority level.

• Social factors- Then further comes the social factors in which it
includes culture religion belief attitude of the individual,
population growth, age distribution gender etc. These are the
most important elements which are to be considered by the
entities to achieve the overall growth and development as
because they have a deep impact on organisational structure. In
relevance with chosen enterprise, their target they market on the
basis of demographic variables and age distribution. This helps
them to identify and examine the potential customers as well as
market (Stoyanova, 2017).
• Technological factors- These factors involved use of advanced
software and hardware artificial intelligence and tools as well as
equipment. With the changing period of time technology has
been become necessity and is being used by every individual. In
relation with selected entity, they also have been digitalize
themselves through digital platforms and use updated online
management system which help them to feed and store the
customer information as well as data.

• Environmental- Then arises the environmental elements in
which it includes pollution waste management weather
temperature etc. By focusing on such factors on addition
increases the goodwill and fulfil their corporate social
responsibility. In context with Tesco, focuses on waste
reducing and use natural ingredients within their resources also
they adopt the friendly materials.
• Legal- This includes contract, agreement, mutual
decision which is enacted by the law and legislations. It is
important to focus on such elements have a proper decision
making during the process. In relation with choose an entity
they have a knowledgeable legal team and department which
keep them up to date about the changes in government rules or
regulations. This help entity to run their business without any
problem or facing legal issues and this also assist them in in
implementing positive relation with the government (Rahman,
2019).