Report: Micro and Macro Factors Impacting Tesco's Business

This report provides a comprehensive analysis of the business context of Tesco, a major multinational grocery retailer. It explores both micro and macro factors influencing the company, including suppliers, shareholders, media, and employees, as well as economic, political, technological, and environmental factors. The report utilizes SWOT and PESTEL analyses to assess Tesco's strengths, weaknesses, opportunities, and threats, and to identify the external forces impacting its performance. Furthermore, the report examines Tesco's ethical behavior and sustainability practices, emphasizing the importance of corporate social responsibility, environmental protection, and economic considerations. The conclusion summarizes the key findings and emphasizes the dynamic nature of the modern business environment and the importance of ethical and sustainable practices for long-term success.

CONTEXT OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1 ................................................................................................................................................1
Micro and macro factor that affect the company........................................................................1
LO2 .................................................................................................................................................3
Ethical behaviour and sustainability ..........................................................................................3
CONCLUSION ...............................................................................................................................3
References .......................................................................................................................................4

INTRODUCTION
Business context is the background which helps in understanding the factor which impact the
business from various perceptive and also identify the micro and macro factors which affect the
business to the large extent. Tesco is a British multinational groceries with headquarter in
Welwyn Garden City, Hertfordshire, England, United Kingdom. It is third largest retailer in the
world. It also has shop in seven countries. This report will cover the micro and macro factor that
affect the company to the large extent.
LO 1
Micro and macro factor that affect the company
There are many Micro environment factors such as -
Suppliers – Suppliers plays the main role in the organisation and can influence the business
strategy of Tesco as they provide raw material to the suppliers. If they do not provide material on
time then it may affect the working of the Tesco as sales decreases due to the delay in the
production process.
Shareholders – It is important for the Tesco to maintain good relationship with the shareholders
as the demand for raise in profit can influence the success of the business for the long term.
Media and social Media – Social media is the large platform as whatever it shows it impacts the
people to the large extent. If media shows negative side of the business then this will decrease
the sales of the Tesco. So it is important to maintain strong relationship with the media.
Employees – Employees are considered as the most important assets of the organisation. If there
is low motivation and low skilled employees, then business will be in loss and it impacts the
working of the business. So employees can influence the business.
SWOT analysis's of Tesco
Tesco is a retailing powerhouse and portfolio of retail brands and also Tesco offers food and
non-food items in all over the world. In this analysis's the company strength , weakness,
opportunities, and threat will be examine (Mason, 2017).
Strengths

Tesco has improved and advance technology which give Tesco a competitive advantage
and also have cost efficiencies and enhanced services . Tesco is considered as the largest and
most profitable supermarket and give tough competition to other . And also it has strong
marketing strategies which attract customers and increase the sales . Tesco has along standing
history in the UK which give assurance to operate long into the future (Khan, Alam and Alam,
2015).
Weakness
The biggest weakness of Tesco is that it depend on UK and Europe for its sales and has
not spent time on developing the other markets where it operates . The second weakness is that
some retail format in certain counties have not performed well because Tesco has not done
proper market research . The third weakness is that some subsidiaries of Tesco is not performing
well and it is the biggest weakness of the company .
Opportunities
The first and foremost opportunity to grow online shopping for Tesco as well as offer
home delivery services in many areas and also has the opportunity to reach the wide range of
customers. Where the Tesco is underperforming there could be the opportunity for joint venture
and partnership in which the local company can help Tesco for the market research and also
Tesco can improve the areas and perform in better way.
Threat
The biggest threat of Tesco is that the food prices are rising day by day and it affects the
sales of Tesco as it reduce the customers . The second weakness is labour threat in terms
increasing there wages which further puts pressure on Tesco to change its pricing policies. The
third important threat is competitive threat in which the other competitor may sale products at
lower price that could affect the sales of Tesco as customer might swift to another brand (Bull
and.et.al ., 2016).
PESTEL analysis's of Tesco
The PESTEL analysis's is a tool which analyse the unpredictable environment in which Tesco
operates by identifying the forces that have most impact on Tesco's performance .
Political factor
Political factor affect the nature of modern business in the global environment as there
are various new laws, taxation, monetary policies, fiscal policies are all part of the political factor

which affect the business directly or indirectly. As in modern business the government has
introduced many taxation policies which might affect Tesco to the large extent (Miller and
Blackler, 2017).
Economic factor
Economic factor affect the nature of modern business as it has a huge influence on firms
and its success. And some factor are inflation rate, current phase of the trade cycle, economic
situation, consumer spending potential etc.
Technological factor
The technology is advancing day by day. As the development of online shopping is the
major trend nowadays and customers first preferences is online shopping and it provides
convenience and ease to the customers which also turn labour cost. Further Tesco has invested a
major amount on energy efficiency project for the sake for long term objective which further
help Tesco to reduce the carbon footprint
Legislative factor
The legislative and government policies directly impact the performance of Tesco. As
government has introduces data protection law and education law. As in modern business the
Tesco has to follow the rules and regulation as it has to protect the data of the customer.
Environment factor
Environment factor is affecting the business to the large extent. As in modern business
environment people are more conscious and serious for the environment. And it affects the Tesco
as it has to use environment friendly products and focus on reuse and recycling of the resources
and also minimise the wastage of the resources. Tesco has also committed for reducing carbon
footprint by 2020.
LO 2
Ethical behaviour and sustainability
It is important for the individual and the organisation to manage responsibility, sustainability
and behave ethically in relation to social, cultural, economic and environmental issue because it
will help the organisation for cost saving as many changes will favour the sustainability such as
using less packaging will help to decrease the production cost. Also it help to gain advantage
over the competitor as Tesco is performing in the ethical manner and fullfilling its corporate

responsibilities. And the third reason is that it will help the business for greater employees'
engagement because by managing suitability there will be a positive environment in the
company and employees enjoy working more for the company . (Phadermrod, Crowder, and
Wills, 2019).
Social issue include the corporate responsibilities which prior concerned of business as company
is providing free education and scholarship to the domestic poor people and thus by the help of
corporate social responsibilities the brand image will improve. The company should manage
ethically in relation to social issue because if there is positive impact on the customer about the
brand of the company then the sales of the company will increase. The second issue is
environment issue in which Tesco has committed to reduce its carbon footprint by 2020 and the
company should follow it because people are more serious about the environment and by
protecting environment people will attract towards the company and brand image will also
increase. Also, the third issue is economic issue in which it includes unemployment by which
government is encouraging retail industry to provide job opportunities to domestic people so
Tesco is also provided job to the people. .
CONCLUSION
From the above study it is concluded that in changing dynamic and modern world there
are many drastic changes due to various factors such as micro and macro .whereas the macro
include the external factor which have the major impact in the business and micro factor include
employees, customers, shareholders, media. Also, it has concluded that the individual and the
organisation has the responsibility to manage suitability and behave ethically in relation to social,
culture, economic and environment.

REFERENCES
Books and Journals
Bull, J. W. and.et.al ., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT
analysis of the ecosystem services framework. Ecosystem services.17. pp.99-111.
Khan, U. A., Alam, M. N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management. 3(6). pp.955-961.
Mason, R .O., 2017. Four ethical issues of the information age. In Computer Ethics (pp. 41-48).
Routledge.
Miller, S. and Blackler, J., 2017. Ethical issues in policing. Routledge.
Phadermrod, B., Crowder, R. M. and Wills, G. B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.