Impact of Business Environment and HR Strategies at TESCO

This report provides a comprehensive analysis of Human Resource (HR) strategies within TESCO, a leading retail company. It begins by outlining the forces that shape the HR agenda, including HR function models, strategies, solutions to support business performance, and the importance of business ethics and accountability. The report then compares three key tools for analyzing the business environment: SWOT analysis, PESTLE analysis, and Porter's Five Forces model, evaluating their strengths and weaknesses in the context of TESCO. The report also explores the role of HR in different strategic stages, presents various business indicators for performance evaluation, and explains how to assess sources of business and contextual data. The analysis highlights how these factors influence TESCO's overall performance and the strategies HR employs to navigate challenges and opportunities.

Business Issue & the Contexts
of HR

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Presenting some forces which shape HR agenda...................................................................1
Comparing three different tools for analysing business environment....................................2
Presenting different factors that impact business and HR functions......................................4
Role of HR in each stages......................................................................................................6
Presenting three types of business indicators to evaluate business performance...................7
Explaining how different sources of business and contextual data can be assessed..............9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Human Resource (HR) suggest different solution and strategically manage the people as a
business resource. Their main work is to recruit and hire the employees, make good collaboration
with the company's employees and suggest strategies related to training and development.
Chosen company for this report is TESCO which is one of the leading retail company in the
world. Report describes how different factors affect company's overall performance as well as
strategies of HR in adverse way.
Further it compares three different tools in order to determine business environment and
some factors that creates impact upon business as well as HR functions. Study also describe key
stages in strategy formulation and the contribution of HR in business ethics. Moreover, report
also presents different business indicators in order to evaluate business performance. Report also
explain some sources of business and contextual data which are utilised for planning.
MAIN BODY
Presenting some forces which shape HR agenda
HR Agenda is the thing that is used by HR to change the people according to business
environment. They mostly think in deep about the reason of a service that in which manner the
services should be deliver. There are some forces that helps to shape up the HR agenda in more
detail and these are as mentioned below:
Model of HR functions: HR run training and development sessions in order to develop
skills and competencies of their employees. The model of HR functions such that Harward
model actually describe the way of HR and how they deliver the goals as well as objectives of
the company. HR also recruit the best candidate for their company in order to increases the
production level and it directly affects the company's profit too (Gutierrez-Gutierrez, Barrales-
Molina and Kaynak, 2018). HR model such as guest model also includes provide training
sessions to their employees who are not performing to attain the company's goals and objectives.
The model of HR function is also assigned different duties or role to their employees in order to
deliver the internal customers so that they will easily attain the goals of the company.
HR strategies: This is another force that help to shape up the HR agenda and further this
strategy also help to develop those strategies that also assist to attain all objectives and goals.
The strategy is a destination for a long term plan that actually created in order to achieve the
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objectives in Human Resource and the development in organization. HR strategy is developed in
order to achieve the goals of the company in positive manner. So, HR strategy is also completing
all the responsibility and only they completed the mission, goals and future aspirations. Because
they are necessary tool that is also essential for the attitudes to align with directions in which the
company wants to move.
Solutions to support business performance: Another important force that helps to
shape the HR agenda and if there are any conflicts between their employees then HR tries to
resolve the issues so that this clashes may not lead to any higher issues (Yim and et.al., 2018). As
a result, indirectly HR of the company always provide the best solution to their employees.
Furthermore, to raise the business performance, HR of the company also develop the best
solutions and different strategy which help to upgrade the company's overall performance.
Hence, it has been analysed that having a good strategy which help a company to sustain their
brand image in market and as a result, the HR of the company also provide various solutions to
their employees for their further development and to raise the production level of the company.
From the above HR agenda and strategies, It has been analysed that if the work is good
and everyone are involve in the same work in a company and as a result, people who are likely to
be more happy and then the business are more productive and profitable. So that the
communities are more likely to be flourished. But on the other side, when the wok is not good
and the business are found in corporate scandals then it directly affects the ethics of the business
and also raise so many difficulties which needs to be solves as per the time (Khedmatgozar and
Shahnazi, 2018). Even the ethical culture of the company also help business to raise the short
term profit to long term sustainability and also ensures the work and also benefited more to their
employees. The CIPD is not the single organization that only sees some tangible benefit in order
to do the things in different manner and the HR of the company also thinks better and a part for
broader movement for their better business.
Comparing three different tools for analysing business environment
Business analysis models are the basic and useful tools or techniques which help to
determine organizational environment. In order to determine the exact business environment,
there are so many tools which are used to identify environment of business. Three main
important tools are as follows:
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SWOT analysis: It is the most common and advance tool that is used to determine the
internal environment of TESCO. It has been analysed that SWOT model is one of the most
popular strategic analysis tool that is used to identify the strength and weaknesses of the
business. Further this model also determine the opportunities and threats. Once if this are
identified easily then it easily assesses the capitalise of the strength of TESCO and how to
minimizes the weaknesses and by determine the opportunities, then it will also use that to grow
the business at further level of success (Leiber, Stensaker and Harvey, 2018). Further it also
reduces the impact of any threats. But on the other side, SWOT analysis also gives a better
perception from the internal and external environment and it does not only prioritise results only
because it may be lead to any improper strategic action too. Hence, to determine the internal
environment of TESCO, it is quite beneficial for a firm to use SWOT analysis.
Strength Weaknesses
 TESCO is one of the leading retail
brand in UK who offer different
products to their customer at reasonable
rate.
 Quoted firm has effective online
operations and strong property
portfolio.
 The firm has brand equity with their
global recognition in terms of quality
and selection.
 The financial performance is weak
because of alliance in UK market.
 The employee morale is also
diminishes as a result, the firm did not
provide best quality of products.
 Because of high competitive pressure
which lead to price war and as a result
the performance also decreases.
Opportunities Threats
 To expand its business at international
market.
 Company also increases its non- food
retail.
 By using different marketing strategy,
that enhance the effectiveness of
TESCO.
 High competition.
 Currency fluctuation can be consider
threat for TESCO.
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PESTLE analysis: This is another framework which help to determine the external
environment of TESCO. This model is consisted of 4 factors that all assist to identify all the
factors that impact upon the environment. P stands for political factor that helps to determine the
political situation and also includes the political influences that affect the external environment
of TESCO. On the other side, E stands for Economical factor that also creates the impact upon
the overall performance which is affected by the national and global economy (Hasegawa and
et.al., 2018). Social factor mainly focus on different ways a society can also affect the company's
position and technological factors also determine the effect of emerging technology upon the
company's performance. However, it has been critically evaluated that PESTLE show
opportunities and threats better than SWOT and as direction of business changes it also fail the
project which beyond from the control. Hence, it has been analysed that PESTLE analysis is
used to determine the external environment of TESCO and it is far better model as compared to
SWOT.
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Illustration 1: PESTLE analysis
(Source: PESTLE Analysis, 2018)

Political Economical
 Political instability affect the
company's performance such as tax
rates, legislation and unemployment
rates.
 It is required for the firm to make
strategy in order to attain goals.
 Sudden change in economy of the
country also affect the system as well
as financial performance in negative
way.
 Moreover, high unemployment rates
that also decreases the effective
demand for many goods and decrease
the profitability of a firm.
Social Technological
 Demographic change like ageing
population and it also affect the
performance of business.
 Even the obesity is the another issue for
the society. That is why TESCO should
provide healthy food to their customers.
 From last many years, TESCO faces
issue of poor customer service,
therefore, if it uses new and advance
technology into their working
environment then it will help to
enhance the profitability.
Environmental Legal
 It is quite required for the firm to
produces products that help to
minimizes 50 percent of the carbon
footprint.
 Firm should imply all the legal
conditions into their working area such
as employment law, Food retailing
commission.
Porter Five force model: It is another analytical tool that is also used to determine the
business of TESCO lies in the terms of competitiveness and the future positioning strength. This
factor also includes some factors that also affect competition such as potential entrants, existing
competitors, buying power and suppliers or the substitution of the products or services. As the
company uses this model then it can easily build a strategy which helps to keep ahead of these
influences. Basically this tool is used to analyse the competition of a business and even this tool
also draws from the industrial organization is to drive the five forces that helps to determine the
intensity of the competition and the capability of lack of an industry that reduces the overall
profitability of the company (Mazouni, 2018). Hence, if all this factors are determined then
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TESCO can easily make their own strategy in order to move ahead in this competitive world.
However, it has been critically evaluated that Porter five force model simply the averment of
other forces that also refers to the innovations and complementary products and services that also
affect the five force model. Hence, it has been analysed that by using Porter five force model,
TESCO can easily determine the competition in a market. So that they can develop new strategy
to sustain in this competitive world.
Threat of new entrant: TESCO faces low threat of new entrant because if new company
entered into the country then it requires more money to invest and the brand image also matter.
Hence the firm faces low threat of new entrant.
Bargaining power of suppliers: TESCO also have threat in order to grow the ability for
large retailer source, even the firm also produces cheap rate of products. The relationship with
their seller also help the company to reach at wide level of customers. Hence, effective supplier
of management help it to raise the profitability of the company.
Bargaining power of customers: being a brand image in country, customers buying
power is high and it continuously provide innovative products to their customers which help to
attract them. By providing innovative products and different discount and offers to them will also
help a company to raise bargaining power of customers.
Threat of substitute: as customer are changes their switching cost and as a result, firm
faces threat of substitution. Therefore, it is quite necessary for TESCO to understand the need of
their customers and provide the best products to them.
Rivalry competition: Faces high competition from other firm and by build sustainable
differentiation and through collaboration with their rivals it can increases its market share and
occupy brand image in market at global level.
Presenting different factors that impact business and HR functions
They work for the welfare of the company but on the other side there are factors that
creates obstacles in the path of success and hence, the productivity decreases. Some factors are
as follows:
Government regulations: HR functions are directly affected by this factor and with the
introduction of new workplace HR department of the company is constantly under pressure to
compliance with the laws made by the government. This government policies directly affect the
entire process of the HR department such as hiring, training and compensation. And if the
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company is not follow such laws then they have to fined extensively which is bad for company's
financial position (French, and Argyris, 2018). It has been analysed that state laws and some
external factor always affect the human resource management and it is quite necessary for the
company to compliance with all. If there is a political instability in the country then it directly
affects functions of the company as well as affect company's overall performance.
Technological Advancement: It is the internal factor that also affect the human resource
planning. For example, if the company greatly use the online tools such as online benefit
management so that employees of the company can easily change their benefit plans by their
own. Hence, if this advance techniques are used in the working area then it will be more
beneficial for the company to do the work in fast way and it directly helps to minimize the cost
as well as capital (Ervural and et.al., 2018). It has been analysed that using technology in the
working area is the more advance way and it is done not just from a consumer standpoint but
from the internal cost saving way too. Therefore, it also affects the business performance as well
as functions of the HR.
Labour market: As the main function of HR is to maintain the adequate staffing levels
through planning and the external factor also influences the ability to recruit those qualified
candidates which is based upon the labour market availability that is also affected by the
unemployment rates. Due to shortage of the labour market, HR of the company faces some
difficulties in order to find best suitable candidate for the company who help to raise the
production level as well as profitability. This external factor also affect the company's
performance and HR function too. Furthermore, the HR has to focus on the recruitment
procedure in outside region and also pay relocation packages in order to encourage the qualified
staff so that they can take up their own position in the company (Priem, Wenzel and Koch,
2018). To cope up with this factor, HR should uses advance techniques through which they can
recruit the best candidate and it further minimizes the cost and saving too.
Competition: It is another external factor that also affect the business performance. It has
been analysed that there is tough competition in market and the extent of competition also affect
the company's ability to recruit the best qualified workers. Even there is no need to spend extra
money for the recruitment because the candidate also visit website. To retain the employee, HR
should also develop some programs and some incentives. Hence, HR department of the company
has to focus on some recruitment strategy and also attending some job fairs in order to promote
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the company and attract other candidates too (Bryson, 2018). Because of high competition in
market, the company's HR has to develop some strategy for the promoting business and also
develop some strategy which help to keep retain their employees.
Role of HR in each stages
Strategy formulation is the process of choosing the most appropriate action by the HR of
the company in order to promote the current existing business. This involves six basic steps such
as:
Setting objectives: It is the first step of the strategy formulation under which the HR of
the company set goals to long term. If at initial level, the objectives are set then it will be more
beneficial for the company as well as HR to use that in order to achieve the set goals. Strategy
formulation also lays stress upon the process to reach there. While fixing the organizational
objectives, it is quite essential for the company's HR to determine some factors that also
influence the selection of the objectives before choosing objectives (Bailey and et.al., 2018).
In this step, HR plays an effective role such that only they identify which goal or
objective is good for the company and the selection is also based upon them only. Having a
critical thinking power also help HR to choose best long term objective for the company.
Evaluating the organizational environment: It is the next step under which the HR of
the company evaluate the economic environment of the company in which it operates. Hence,
this also review the organization competitive position. This evaluation is quite necessary because
it helps to determine the strength as well as weaknesses of the company and after identified this,
the HR will take proper action to overcome the problem of weaknesses.
The role of HR in this step is such that they keep track the rival's moves and then take
action as per the requirements. After determining opportunities for the company, they also
develop new strategy in order to execute such into business. So that it will be helpful for the
future execution also.
Setting Quantitative targets: it is the third stage of strategy formulation under which the
HR of the company are fix some quantitative target values for their organizational objectives. It
is done so because to compare with long term customers and to evaluate the contribution of the
HR that might be done by various products zones as well as operating department too (). Hence it
is quite necessary for the company as well as HR to develop some quantitative targets in order to
achieve the target or objectives for the welfare of the company.
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Divisional plans: Under this stage, the HR assign different roles to the department of the
company so that they all contribute in order to achieve the target which is set in first stage.
Different division have different roles and it is quite necessary through strategic planning should
also be done for each sub unit. But on the another side, HR of the company should pay more
attention and careful analysis the trends of macro- economic.
Performance Analysis: It is the most important stage which shows the gap between
discovering and analysing the gap between planned and desired performance. To determine this,
the HR of the company critically evaluated the past performance with present situation a d then
desired to take action according to attain the defined goals in future (Gutierrez-Gutierrez,
Barrales-Molina and Kaynak, 2018). For this reason, the HR is also attempting to estimate the
future situation of the company if they takes the best action after analysing the past performance.
Choice of the strategy: this is the last step under which the HR select best strategy to
execute the objective. It has been analysed that the best course of action is also chosen after
analysing the organization goals, strength as well as weaknesses and to determine the
opportunities for the company. Further this also helps to contribute the HR system and at last this
also lead a business at further level of success. If this all are determined then it will be helpful for
the company's HR to select best Strategy in order to attain the selected objectives for a company.
Presenting three types of business indicators to evaluate business performance
To evaluate the Business performance which is a simple process that let HR know about
the deepness of a company. It can be evaluated through many methods and this are as mentioned
below:
Key performance Indicators: It is the best measurable value that helps to determine
how effectively a business is run and achieving the business objectives. Many companies uses
key performance indicators at multiple levels in order to evaluate the success of a business. High
level KPI only focus on the overall performance of a business and on the other side, low level
KPI only focus on the process and employees in department. For example sales, marketing. It has
been analysed that firm mostly uses or adopt Key Performance Indicators that also reflect the
business progress and it is also used as an effective tool that assist or build the better performing
teams (Albats, Fiegenbaum and Cunningham, 2018).
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In order to achieve the target which are defined by the company, there is a need to use
KPI which help to gain better understanding of the business processes that needs to be measured
the overall performance of the employees as well as business.
Benchmarking: It is the another tool that is used to measure the company's products
with another industry that is used to identify the internal opportunities for the company's further
improvements. Using this tool in the working area will help a business to improve the employee
understanding that is related to cost structure as well as internal process. Further this tool also
encourage team building so that they become more competitive and hence it raises the overall
production level of the company (Molinos-Senante and et.al., 2018).
It is further analysed that it is the best practice and this is also used in management that
further help to raise the company's overall performance. This tool also allow organization to
develop some plans related to improvement and its main aim is to increases the performance of
the company's employees. Moreover, the benchmarking is that event which is treated for the
continuous improvement for the performance of the company. The key role of HR using this
tool into their working area is such that it lower down the labour cost and increases sales and
profit of the company. By recruiting the best candidate for the company and uses this tool will
help to improve the product quality and hence it also uses to determine the competitor strategy
too.
Balance scorecard: it is another strategy tool that helps to evaluate the performance. It is
the semi standard report that helps the HR to keep tracking the activity of the employees and also
monitor the consequences that also arises from the taking actions. This tool is also used by
individuals in order to track the performance of employees (Akkermans and Van Oorschot,
2018). Balance scorecard also focus on the strategic agenda and the data that also mix some
financial as well as non- financial items.
HR of the company uses this tool in the company then it will help them to make strategic
planning and through effective communication, the employees of the company can easily attain
the defined goals. Balance Scorecard is also assists the HR to improve the performance and as
per the increased needs and requirements which should be also met with the objectives. The
biggest advantage of using this tool in their working area is such that HR will also emphasize the
financial goals. From above, it has been analysed that HR of the company wants to change the
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management of the company and through their effective planning they actually change the entire
management.
Explaining how different sources of business and contextual data can be assessed
There are so many sources through which HR can collect information in order to take a
business at further level of success. Basically business data are collected from surveys, and
through online information and many more. Some of them are as follows:
Online information: It is the most advance source because as per present scenario, the
Internet is considered the most powerful source that helps to collect different information from
the countries. Even, it has been analysed that Internet is also includes data which are related to
demographics and markets, finance and marketing and international trade or government rules
and regulations. This entire information is provided by Internet only. Thus, online information is
considered one of the most advanced and fast source of information that can be used by HR of
the company in order to set strategy for the firm's further development. In order to collect the
information from the online source, the HR of the company should have perfect skill, which
must be developed but the small business owner also have the practices regarding the workplace
(Kolk and Rivera-Santos, 2018). Thus, it has been analysed that through online information, the
company's HR can easily manage the work in perfect manner.
Television and Radio Media: To determine the external environment, the company also
uses Television as well as Radio media to determine other company's performance. There are
many programs which are also devoted to general investment strategies and also changes fortune
for those companies who have their won goals and objectives. Even there are so many programs
which are conducted by different companies and it has been analysed that this are also changing
fortune of many large firms and to rich wide range of customers, there is a need to collect
information through T.V. And Radio in order to raise the company's overall performance. If the
news is telecast by these sources, then company also determine the different strategy which are
used by their rivals and by analysing, HR of the company also take better action as per the
requirements and hence, this further help to raise the production level of the company as well as
profitability too. Hence, it has been analysed that this also consider an important source of
collecting information from different business.
Print Information: this is another important source that help to cover not only the array
of books but also includes the entire information which needs to be uses in order to let people
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know about the company's strategy. Among all, the books and periodicals are considered the
most important print information source for collecting the data. Because generally the books are
provide the entire information related to a firm and even the book also provide the general
references and information on the HR management (Wang, Kung and Byrd, 2018). The print
information are considered 100 percent true because it provides exact information to the rivals
and also determine the strategy which is used by the company in order to sustain in this
competitive world. Further it has been analysed that this sources are not as much used by the
company because of online information and advance techniques. Many firm directly update in
website and for this reason, print information is not actually used.
Business meetings or seminars: It is the another source of information that is actually
used. There are so many business meetings and seminars are conducted in which many big firms
are interacted with each other in order to let know each other. Seminars are also conducted so
that all business owners are come to let know about individual strategy of success. Hence, it can
be considered that through meetings and different seminars, information are also transferred so
that every firm get know each other policies and strength (Yim and et.al., 2018).
From above, it has been analysed that there are four basic sources of information through
which HR can used this for utilizing for planning purposes.
CONCLUSION
By summing up above report, it has been concluded that HR plays an important role in
every business. Report concluded that Hr function, strategies and provide solutions to raise
business performance are some key forces that shape the HR agenda and by using SWOT
analysis, PESTLE analysis and Porter five force model HR can determine the business
environment. Report further concluded that through strategy formulation, company's HR also
contributed to business ethics as well as sustainability. Moreover, using KPI, Balance Scorecard
and Benchmarking the company also evaluate the performance of a business and uses different
sources in order to get exact information from business contextual data.
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