Business Environment Analysis Report: Tesco PLC Case Study

Desklib offers solved assignments and past papers to help students succeed.

BUSINESS
ENVIRONMENT
ANALYSIS

Table of Contents
INTRODUCTION.....................................................................................................................................2
PART A...................................................................................................................................................3
BUSINESS...........................................................................................................................................3
PUBLIC BUSINESSES...........................................................................................................................3
PRIVATE BUSINESSES.........................................................................................................................4
VOLUNTARY BUSINESSES...................................................................................................................5
DIFFERENCE BETWEEN PUBLIC, PRIVATE AND VOLUNTARY ENVIRONMENTS..................................8
PART B.................................................................................................................................................10
INTRODUCTION...............................................................................................................................10
STAKEHOLDERS MAPPING ON TESCO..............................................................................................10
EXPLANATION..................................................................................................................................11
PART C.................................................................................................................................................13
COMPANY'S OVERVIEW...................................................................................................................13
SWOT ANALYSIS...............................................................................................................................13
PORTER’S FIVE FORCES....................................................................................................................14
PESTEL ANALYSIS.............................................................................................................................15
CONCLUSION.......................................................................................................................................17
REFRENCES..........................................................................................................................................18
INTRODUCTION
1

In this report mainly various types of businesses and what are their purposes are
discussed. The starting section explains about the different business environment
and their main responsibilities and work processes. The different type of businesses
environment mainly covers private, public and voluntary sectors. Further topic
includes detailed information about how different types of stakeholders affect the
business environments and how they influence business growth. This part is
featured using stakeholder mapping. The latter part of the report covers the
evaluation of the effect of micro and macro business environment on the decision
and activities of the business in the private sectors. Analysis models and techniques
like PESTEL analysis and Porter’s five forces and also SWOT analysis are used
elegantly for making the evaluation clearly understandable. At last summing up all
the things the final conclusion includes brief information about what we gained
through this report. This report will make clear the understanding of the business
environment in a simple and graceful manner.
2

PART A
BUSINESS
In the simplest terms, the business is an organisation which provides legal service
and goods in exchange for a fair amount of money. Any business requires some
amount of investment as an input and enough customers to which the goods or
service can be sold.
TYPES OF BUSINESS
The business is mainly divided into three major parts:
1. Public
2. Private
3. Voluntary
PUBLIC BUSINESSES
Public companies are those which sell all or a part of the company to the public via
an IPO (Initial Public Offering) and the shareholders can then claim of being a part of
the company’s profit or asset. The stocks of these companies can be easily
exchanged using stocks or over the counter market. An example of such an
organization is Tesco PLC (Lawrence, et al., 2014).
Introduction to Tesco PLC
Figure 1: Tesco Stores
3

[Source: Tesco Stores]
Tesco PLC is a leading British brand supermarket. Tesco has its headquarters in UK
, Welwyn Garden City and other countries. Tesco has gained a lot of popularity and
customer trust by providing quality products at a very cheap cost (Tesco, 2019).
Purpose of Public Companies
The main purposes of PLCs are:
 To raise their profits in order to increase the shares.
 Such companies focus on expanding their business as more as they in every
possible area.
 Another goal that a public company is to raise its profits by reducing cost and
growing sales. The extra capitals which they gain, help them to emerge in
more areas and also in research for new ideas.
 To increase brand recognition such as companies participates in social events
and collaborates with the NGOs (PB, 2019).
 Participating in other social events also helps such companies to develop
more trust to the customers and also helps in finding great talent for their
company.
PRIVATE BUSINESSES
Opposite of the public companies these cannot sell their stocks in the public market
or through on counter stores. These companies work under less legal requirements
than those of public companies. These are owned by a small group of individuals
and they have to manage other sources of in investments for development. An
example of such a company is Virgin Atlantic.
Introduction to Virgin Atlantic
Virgin Atlantic is the commonly known name of Virgin Atlantic Airways Limited. Virgin
Atlantic is a British airline company which was established in 1984. Every year this
company takes more than 5 million people to more than 340 countries. They have a
partnership with Delta Airlines, Air France and KLM (VA, 2019).
4

Figure 2: Virgin Atlantic
[Source: Virgin Atlantic]
Purpose of Private Companies
 The principal aim of such companies is maximizing profit.
 Maintaining the transparency of financial and annual reports among the
limited known shareholders who own the whole business.
 Making the company's overall structure more robust for better growth.
 Increasing brand recognition in any way that does not require too much
investment.
 Keeping the company’s marketing plans, business strategies, and research
procedures as private as possible (Bradley, 2019).
VOLUNTARY BUSINESSES
The voluntary sector is made up of those organizations whose main aim is to benefit
and enrich society without earning profit for themselves and with minimum or no
governmental interaction. The extra profit gathered by such companies is again
invested in expanding social work or making the current work better. An example of
such a company is NHS (Osborne, 2013).
5

Introduction to NHS
National Health Service (NHS) is a social reform funded publically and provides
healthcare services. NHS was established in 1948. The main motive of this reform is
to provide a comprehensive range of health services at minimum cost and totally free
to the local residents of the UK. The patients only have to pay some amount of the
prescription.
Figure 3: NHS Hospital
[Source: NHS Hospitals]
Purpose of Voluntary Organizations
 Adding as much value to society as possible.
 Generating social development and awareness rather than profit for
themselves.
 Getting investments from other firms for expanding the services (Butler, et al.,
2015).
6

 Making the services available to as many individuals as possible irrespective
of cast, sex, language etc.
7

DIFFERENCE BETWEEN PUBLIC, PRIVATE AND VOLUNTARY
ENVIRONMENTS
Sr.
no. Parameters Public Private Voluntary
1 About the
Companies
These are the
companies which
have sold their
stocks in the public
markets and
through on counter
sales via an initial
public offering.
These are the
companies which
are established and
handled by a few
groups of individuals
and whose stocks
cannot be sold
publically.
These companies
are funded by the
public and other
firms and they
perform social
works to add
more value to the
society rather
than generating
profit for their own
selves.
2 Brand
Recognition
Brand recognition
is a primary
purpose for such
companies. They
even perform social
tasks and self-
hosted events for
brand recognition.
Brand recognition is
not that important
for "still growing"
companies. But it is
a must for a well-
established
company.
Brand recognition
is not a primary
objective for such
companies. But
they gain social
wealth via the
services they
provide.
3 Business
Strategies
Business strategies
are as private as
possible.
Business strategies
are as private as
possible.
They do not have
too strict
strategies and
that is why
business
strategies are not
private.
8

4 Revenue
They generate
revenue and
investments
through their stocks
and services they
offer.
They generate
revenue mainly
through their
services.
They are funded
by other firms,
some
governmental
investments and
by the public.
9

PART B
INTRODUCTION
Stakeholder mapping is an analysis which helps us to identify the effect of different
stakeholders on the business environment so that the right stakeholders (those who
helps in maximum benefit to the company) can be chosen among the whole
stakeholder’s spectrum and this can be also be decided how much involvement is
required with that stakeholder (SM, 2019).
Figure 4: Stakeholder Mapping Matrix
[Source: Stakeholder Mapping]
STAKEHOLDERS MAPPING ON TESCO
 Identifying Stakeholders
The main stakeholders of Tesco are:
Pressure groups Trade unions Employee
Government Local and national
communities Suppliers
Owners Government Creditors
10

Customers Directors Workers
Local Authority Unions Community
 Mapping Stakeholders
EXPLANATION
Below is the explanation of why the specific stakeholder falls in the specific part of
stakeholder mapping matrix for Tesco:
 Pressure Groups – These are the organizations that can write letters to PMs,
Organizing marches etc. That means they have power and a little interest.
 Trade Unions – These are the group of individual employers created for the
benefit of the employers (They have interest but don’t have enough power).
 Government – Government has a lot of power but has no interest in our
company. They can influence the company in a drastic way.
11