Report: Business and Business Environment Analysis for Tesco's Success

This report provides a comprehensive analysis of Tesco's business and business environment, encompassing various aspects of its operations. It begins with an introduction to the business environment and its influence on customer relationships. The report delves into different types of organizations, their purposes, and legal structures, with a focus on public, private, and voluntary organizations. Tesco, as a private organization, is used as a case study. The report examines the size and scope of different organizations, comparing Virgin Money, Tesco, and Cancer Research. It then explores the relationship between different organizational functions, such as marketing and HR, and marketing and finance, and their connection to corporate objectives. Furthermore, the report investigates the positive and negative impacts of macro-environmental factors on business operations, including internal and external analyses to evaluate strengths and weaknesses. Finally, it discusses the interrelation between micro and macro factors and their impact on business objectives and decision-making.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1. ................................................................................................................................................1
P2&M1. The size and scope of different organizations..............................................................3
LO2..................................................................................................................................................5
P3&M2&D1.. Explaining the relationship between different organizational functions and their
link to corporate objectives.........................................................................................................5
LO3..................................................................................................................................................7
P4&M3. The positive and negative impacts of macro environment factor on operations of
business.......................................................................................................................................7
LO4..................................................................................................................................................9
P5&M4. Internal and External analysis of particular organization to evaluate strengths and
weaknesses..................................................................................................................................9
P6. Explaining the strengths and weaknesses interrelate with the macro factors.....................10
D2. The impacts of both micro and macro factors on the business objectives and decision
making.......................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment includes both internal and external factors which in turn closely
influences firm’s ability in relation to building as well as maintaining effectual customer
relationship. In the context of business unit, it is the accountability of manager to develop
competent strategic and policy framework for dealing with such environmental forces. The
present report is based on Tesco which provides customer with wide range of retail products and
services at affordable prices. In this, report will provide deeper insight about different types of
organizations and their legal structures. Further, it will shed light on the size and scope of varied
organizations. Report also entails organizational structure which Tesco is following for
managing operations effectually. Along with this, it also presents internal analysis which in turn
clearly reflects organizational strength, weakness, opportunity and threats. In this,
interrelationship between micro and macro factors will also be discussed.
LO1.
P1. Different types of organization and their purpose and legal structure
Public organization- Public sector organization is owned by government and is set up
for the achievement of defined purposes of public and not for profit making (Prajogo, 2016). The
major stake of such companies is held by the public authorities which include central, state and
local government. The securities of public enterprises are traded on the stock exchanges and
issued to public at large. For example- virgin money is a public sector enterprise, a leading UK
bank, focuses on creating value to the external and internal users by delivering positive
contribution to the society.
Purposes- Economic growth- the foremost objective of public firm is to enhance rapid growth of
the economy by creating necessary infrastructure for the development of the economy. Creating employment opportunities- Public company creates more and more
employment opportunities for the public so that economic goals can be achieved.
 Generating return on investment- These companies develop resources that inculcates a
high return to the stakeholders so that maximization of wealth can be attained.
Legal structure- As a leading challenger bank, they emphasize on the mortgages for home,
credit cards and saving account with the added complementary services that involves insurance,
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investments etc. This leads to a relationship building with customers and enables them to
facilitate a positive contribution towards the community.
Private organization- These are the privately owned enterprises, established for the
purpose of making profits. Such companies restrict the issue of shares to the public and the
securities of these enterprises are not traded on the stock exchanges (Kljucnikov, and et.al.,
2016). It is run by individual, instead by the government. For example- Tesco is the private
organization, a multinational retailer that focuses on generating revenue and income to reach a
competitive position and to gain competitive advantage.
Purposes-
 Profit maximization- the primary purpose of these companies is to increase the profits for
creating a brand image and to capture the large market.
 Restricting access- the private companies restrict the access to the policies, marketing
plan and competitive strategies and ensure that private data of the enterprise remains safe
and secured. By this these firms resist the competitors to attain the competitive edge in
the market.
Legal structure- It is a listed self owned company. As a corporate governance all the
shareholders, chief executive officer and the board of directors is in accordance with the external
laws, recommendations and regulations as well as the rules internal to the work environment
(Hillary, ed., 2017). They diversified their business at different geographical region through
superstores, convenience shops, supermarket etc. by selling a range of different products
altogether. This enables them to set up more and more stores across the globe.
Voluntary organization- It is a non-governmental organization, where a group of people
voluntarily contributes for the welfare of the people. These firms run for carrying specialized
activities in relation to development, aid and emergency relief. Such enterprise acts as the non-
profit making organization. For example- Cancer research, UK based voluntary firm that works
for facilitating social services by conducting the campaigns and research for preventing people
causing cancer in the community. They spread awareness being voluntary among the public for
curing the disease at all levels.
Purposes- Raise money- these firms raise money for the purpose of funding the welfare programs. Create awareness- such firms provide education to all the people including professional.
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 Welfare services- Provide services to those persons and families that are facing health
problems.
Legal structure- for meeting their purpose of fighting against the disorder, they take help from
the doctors, social activities and nurses for strengthening their success and infrastructure
(Jaakkola,and et.al., 2016). They have around 10 clinical units, 16 centers for cancer medicine
and 6 programs for training the graduate.
P2&M1. The size and scope of different organizations.
Virgin money Tesco Cancer research
Size This company works
at the medium and the
large scale as it is a
multinational body
that has the chances of
increasing the growth
at the high pace.
Tesco is an
independent body
owned by the
individual considered
as the medium
enterprise. The
workers of this entity
seek to increase sales
for enhancing the
business in the long-
run.
Cancer research act as
the small enterprise
where the level of
employment is low
and the investment in
the capital is also low.
Scope The company has a
wide scope for future
development and
seeking to enhance the
internal and external
factors of the
company. Virgin
money is operating as
the government sector
and earns huge
revenues. The capital
Tesco are private
bodies that are owned
by the sole proprietors
where they function in
partnership and has
possibility of changes
in their size and the
structure of revenue
(Bah, and Fang,
2015). The scope of
this organization is
The scope of cancer
research is also wide
and add up value to
the development of the
economy. The scope is
widened by generating
better opportunities for
earning income. The
growth and lowering
cost of business leads
to stability in the
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of the enterprise is
kept aside for meeting
the future investment
purposes.
wide in the future
aspects as it deals in
the wide range of
products and services
and has diversified its
business in different
sectors.
future for achieving
success.
Strategy Building better
investor relations by
adopting customer
relationship
management.
Strategy of this
company is to deploy
the resources for
achieving the goals.
High value from the
customers it follows
Long-term strategy.
High level of
investment is made on
the research for
beating the disease of
cancer.
Vision The vision of the
virgin money is to
perform and fulfill the
vision of the
individual and the
group.
The vision of the tesco
is to focus on long run
success. It drives for
growing business
across the world with
ample of
opportunities.
Innovation and
becoming modern is
the vision element of
the firm.
Preventing the life of
the people by treating
the disease of cancer
(Epifanova, and et.al.,
2015). To make design
for the research for
improving the
outcomes for the
people.
Mission Mission of virgin
money is to change the
community for the
better and facilitates
the way for generating
The mission of the
Tesco contains the
overall business
purposes. It
communicates about
Mission is to save the
lives of the people. To
cure, control and
prevent the disease for
the survival of the
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the returns on the
investments mad e by
the people.
the goals of an
enterprise to all the
stakeholders.
people.
Aims The major aim of the
enterprise is to ensure
the balanced benefit of
the employees,
customers and the
shareholders.
The main aim of the
company is to attain
and retain the loyalty
of the customers.
The foremost aim is to
reduce the death of the
individual from
cancer. To become the
leading and the largest
cancer research
company across the
globe.
Objectives Virgin money operates
on the concept of long
term sustainability of
the decisions of the
business. To build a
positive decisions
towards the people,
communities and the
customers.
The objective is to
generate value for its
customers and to earn
the loyalty of the
customers for lifetime.
The primary objective
is to form the cancer
research. To
coordinate the
planning of the
research that relates to
remain with the
objectives of the
company.
LO2.
P3&M2&D1.. Explaining the relationship between different organizational functions and their
link to corporate objectives.
With the increased risks and competition in the world, several departmental roles come up in the
companies to maintain a stable position in the changing and uncertain environment in the future.
Marketing with HR- This department is the most important part of the performance of
the business that helps in developing strategies in relation to the promotion and marketing
function of the Tesco. For attracting the right pool of talent and to hiring right person for the
right job in an organization, HR department has to rely on marketing department (Calabrese, and
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et.al., 2018). Effective marketing will act as the key for HR department in hiring the right
candidate on the right job and at the right time by building an appropriate list of the database and
efficient social media marketing. This leads to achievement of skilled and talented workforce in
the organization and objective of reaching the target can be met by the firm.
Marketing with finance- These departments are the pillars of the entity as growth and
profits are wholly dependent on these departments. Integration of marketing and finance is
necessary to generate great outcomes for the coming future. Finance department is related to the
financial aspects of the company such as costs, increase in sales, financial performance, profits
and feasibility of the projects. On the other state, marketing department is concerned with the
sales target, volume of sales, advertising, publicity and comparison of sales to the competitors of
the Tesco. Therefore, for improving the sales of the company, effective advertising and publicity
is required which in turn improves the profits of the organization (Hamilton, and Webster,2018).
Thus, without marketing, the finance department cannot function as the basic purpose of finance
department is to increase the profits and if there are no profits then the whole finance function
becomes redundant. Similarly, for making the marketing successful, Tesco need to have a strong
financial position because on the basis of finance only the goals of the enterprise like sales target,
sales price can be achieved.
Marketing with operations-For developing and researching a marketing plan, marketing
department plays a vital role. The plan outlines the details regarding the current situation in
relation to the customers, external environment, competitors and the internal weaknesses and
strengths of the Tesco. This plan sets the objectives of sales target, demand forecast and
requirement of resources for existing products. For successful implementation of the plan,
effective operational department is required for managing the development of product, delivery
of the product and manufacturing. Marketing internationally is a complex task and many pitfalls
are faced by the department. In the context of worldwide marketing it is important that operation
department has the complete information and the capacity for delivering (Adegbite, and et.al.,
2018). If the operation management cannot perform the offers promoted by the marketing will
lead to delay in delivery and not up to the specification. Thus, for meeting the objective of
efficient international marketing, harmony among the marketing and operation department is
imperative.
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LO3.
P4&M3. The positive and negative impacts of macro environment factor on operations of
business.
PESTLE analysis of Tesco
Political factors- Since Tesco is operating its business worldwide, the political factors globally
greatly impacts the performance of the corporate (PESTLE Analysis for Tesco discusses its
Business Environment,2019). These factors include the government rules and regulations
regarding the tax rates, stability etc. Because of the financial instability in the market, several
governments motivates the retailers for creating the employment opportunities for the population
which increases the cost of the company and affects negatively to the profits of the enterprise.
On the other hand, By creating the jobs, tesco builds good relationship with the government and
contributes to the economic development of the country (Brown, R. A., 2018). This in turn,
diversifies the workforce and increases the product's demand which influence positively to the
profits of the firm.
Economic factors- These factors are the major concern for the company, as they state the
demand, profits, leverage costs and prices. Therefore, tesco need to be aware of any change in
policies, taxation and other factors that influences the finance accessibility. More the leverage
cost, higher the debt of the enterprise which negatively affects the image of the company and it
faces problem in meeting its obligation. Increase in the income of the people leads to increase in
the demand of the products which in turn reflects positive impact on the profitability of the firm.
Globalization and diversification are the strategies adopted by the Tesco becomes the key points
for the success of the corporate.
Social factors- Evolving lifestyle, attitude and culture comes under the purview of social factors
that highly influences the functioning of the tesco across the globe. Due to the several social
changes, the trends stated that consumers are more and more moving forward to bulk buying
which causes a negative influence on the food items segment of the entity (Prajogo, 2016).
Therefore, Tesco increased the section of non-food goods that are offered to the customers for
sale. The demand of the goods and services is highly influenced by the consumers beliefs,
attitudes and culture which in turn are influenced by the social conditioning. Due to customers
are becoming health conscious and their preferences in relation to the food is frequently
changing, so Tesco by adapting to the changing perception started producing organic product so
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that it could attain the customer loyalty and this leaves a positive impact on the reputation of the
enterprise.
Technological factors- These factors includes the up-gradation of technology and technological
capabilities that impacts greatly the business of the Tesco. Technological advancements have
brought several new opportunities for the enterprise. The most distinct techniques that the
company adopted are the development of online shopping with home delivery facilities and the
points of self-service checkout have facilitated convenience for the customers. This positively
influence the labor cost of the corporate. On the other side setting up new techniques creates the
need for training and development of the employees as highly skilled workers can access such
advancement which leads to increase in the cost of the firm that affects negatively to the entity's
income.
Environmental factors- It deals with the ecological factors and natural environmental factors
that affects the operations, growth and survival of the organization (Kljucnikov, and et.al., 2016).
It is essential for the firm to keep continuous monitoring and reviewing these factors so that it
could survive even in the changing circumstances. Because Tesco deals in food items, it has to
take care about the climatic conditions as in the rainy season the food items becomes soggy and
affects negatively the quality of the product of the enterprise. Furthermore, It has make huge
investments on the efficient energy projects for fulfilling the long term goals and to reduce the
carbon footprint so that it could contribute to the society in terms of pollution free environment.
This helps the firm in creating the positive positioning in the overall market. Tesco committed to
reduce its carbon footprint by 40% by the end of 2019. By this the produced waste in their stores
has been minimized and lead to increased social conscience in the customers.
Legal Factors- Legal policies, regulations and legislation directly influence the operations and
performance of the Tesco. Legal laws changes on a frequent basis which negatively impact the
company as it need to implement the changes and if the company doesn't implement the changes
in the legislation it leads to incur penalty and the affects the goodwill of the enterprise. On the
other state, timely performing with compliance of the rules and regulation creates positive
environment for the survival of the corporate in the long run.
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LO4.
P5&M4. Internal and External analysis of particular organization to evaluate strengths and
weaknesses
SWOT analysis of Tesco
Strengths: By doing assessment, it has identified that Tesco has diversified its operations
in several areas such as books, clothing, electronics, furniture, financial etc. It is one of the
largest company and ensures listing on London Stock exchange. Company has established its
brand more effectually by using innovative marketing and advertising strategies. In addition to
this, firm has built strong brand equity in the market through the means of private labels. Further,
such firm is using advanced packaging tools or techniques which in turn creates distinct position
in the mind of customers. Tesco has 6500 stores across 14 countries which makes positive
contribution in the sales and profit of the firm.
Weaknesses: Internal analysis of Tesco presents that company faced several
controversies related to waste management etc. In 2014, company overstated its profit for which
SFO paid with £129 million. Fine was imposed by Serious Fraud Office, UK on Tesco in against
to the undesirable activities performed by it. This in turn created issue for Tesco in terms of
lower brand image and market share. Wholesale market scandal of Tesco has also negatively
affected company’s image. Along with this, in comparison to the competitors, presence of Tesco
in emerging country is not highly significant.
Opportunities: Business unit has opportunity to maximize both productivity and
profitability by exploring operations in emerging market. Along with this, by using digital media
firm can explore its reach. In other words, by placing advertisements on social networking sites
Tesco can develop awareness among the large number of customers at global level. Company
can boost its productivity and profitability through acquiring smaller chains.
Threats: In retail sector, products & services can be imitated by others or rival firms easily.
Thus, focus needs to be placed on offering innovative product or services to the customers which
in turn reflects uniqueness. Apart from this, changing government policies and tax obligations
are also imposing threat in front of firm. Companies namely ASD, Morrison’s, Sainsbury etc are
the major competitors, under retail sector, which in turn creating issues for Tesco. Moreover, all
such firms are also offering heavy discounts to the customers on retail products.
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P6. Explaining the strengths and weaknesses interrelate with the macro factors.
The strengths and weaknesses of the organization are linked with external macro factors as They
might increases risk of macro factors in the business.
Tesco has a strength of global presence and brand image which are linked with the legal factors
as different country has different laws and rules that are to be followed by the enterprise. This
creates difficulty for the corporate in implementing and working with the compliance of the
legislation. Diversification is the major strength of the company that relates with social factors as
wide range of products and services are offered to the customers leads to positive social
environment because the taste and preferences of the customers can be met by offering them the
various options to choose from (Jaakkola,and et.al., 2016). Tesco makes huge investment in
their promotional activities which helps in reaching the sales target and attracting the large
customers and this is directly linked to the environmental factors as effective marketing creates a
positive environment for the company. The organization faces criticism as a weakness which
interrelates with the environmental factors as it has been criticized that the products of the
company generates a lot of waste that harm the environment and due to this the reputation of the
company affected negatively. The company has also indulged in the wholesale market scandal
which acts as the weakness and has a direct link with the legal factors as the entity has an
involvement in the unfair practices which is considered void in the eyes of the laws.
D2. The impacts of both micro and macro factors on the business objectives and decision
making.
The micro factors of the Tesco includes the suppliers, intermediaries and investors that has a
huge impact on the smooth functioning of the company. If the supplier will not supply the raw
material timely then the operations of the company cannot be performed and the delivery of the
product result in delay so this affects negatively on the performance of the firm. Investors are the
one who enables enterprise in carrying on the business with high growth so any negative
feedback or comment for the firm induces the investors in buy backing their investment and this
leads the company with lower performance. The macro factors include the political, economical,
social, technological, environmental and legal which has an impact the Tesco in both ways
negatively and positively (Bah, and Fang, 2015). The stability and instability of the government
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