Analysis of Tesco's Business Environment and Organizational Structure

This report provides a comprehensive analysis of Tesco's business environment, encompassing various organizational types, their purposes, and legal structures, with a focus on the private, public, and voluntary sectors. It examines the size and scope of Tesco, BBC, and Oxfam, detailing their objectives and stakeholder relationships. The report further explores the interrelationship between organizational functions, such as marketing, human resources, sales, and research and development, and their alignment with organizational objectives. A significant portion of the report is dedicated to identifying the effects of the external environment on Tesco's business operations, utilizing a PESTLE analysis to assess the impact of political, economic, social, technological, legal, and environmental factors. The report also includes a SWOT analysis to evaluate Tesco's strengths and weaknesses.

Business and The
Business Environment

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INTRODUCTION
The sum of internal and external factors which affect the business is defined as Business
environment. This internal includes employee, customers needs , expectation, client supplier,
and the external factors includes owner and innovation in technology, social change,marketing
change etc. This internal and external factors affect business environment. Business environment
improves the overall performance and identify the opportunities, growth, and profitability of the
organisation. This report is carried out in context of TESCO, a British multinational groceries
and general merchandise retailer founded in 1919 by jack Cohen. its headquarter is in England
UK (Andersson, Forsgren and Holm, 2015). This study involves various kinds of purpose and
legal structures of organisation the scope of different organisation provides a link between
objectives and product offered by companies. This report focuses on identifying the impact of
macro environment on business operation with the help of PESTLE. The strengths and weakness
will be examined by swot analysis below:
TASK1
P1.Different types and purpose of organisation and legal structures.
The various type of organisation such public, private, voluntary to operate the business
successfully. In the present report, Tesco company is taken as the private organization , British
broadcasting company is taken as the public organisation and OXFAM is considered as the
voluntary company. Types , purpose , mission , vision , product & services and legal structure
of these organisation is explained below:
Public sector: This public sector is defined as the organisation which is closely-held and
direct by the government. British broadcasting corporation is a British public sector broadcaster.
This organisation was founded in 18 October 1922 by John Reith. BBC is a worlds oldest mass
media industry and national broadcasting organisation.
Services and product: BBC provides several services to its customer's and It also
operates various televisions in UK. They currently operates HD services to all its nationwide
channels with the exception of BBC parliament. The BBC has its own 10 radio stations in UK
and further 6 radio station in national region. This organisation operate news gathering
operations, news website and also operates BBC audio books.
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Size and scope : According to the number of employees BBC considered as the largest
broadcaster in the world. Its has 20,950 employees and 16,672 are working for the public sector
broadcasting. BBC has 35,402 fixed and flexible staff employee including part time employee.
(Belás and at. el. 2015).
Vision:
To see its self as the most creative organisation of the world.
Mission :
the mission is to inform and educate the people through programmes and services.
Legal structure :
This is defined as an structure where the organization has the liability for all those work
which they perform at different platforms. Organisation can be of different types such as Private,
Public and voluntary to operate the business successfully. In the present report, Tesco company
is taken as the private organization , British broadcasting company is taken as the public
organisation and OXFAM is considered as the voluntary company. Types , purpose ,
mission , vision , product & services and legal structure of these organisation is explained
below:
Public sector:
the public sector is defines as the organization which is directed and controlled by the
government. British broadcasting corporation is a British public sector broadcaster. This
organisation was founded on 18 October 1922 by John Reith. BBC is the worlds oldest national
mass media broadcasting organisation.
 Services and product: BBC provides the several services to its customer's. BBC
operates the various television in the UK. They currently operates HD services
to all its nationwide channels with the exception of BBC parliament. The BBC
has its own 10 radio stations in UK and further 6 radio station in national region.
This organisation operate news gathering operations, news website and also
operates BBC audio books (Chang, 2016).
 Vision of BBC:
To expand the area of mass media over the world
 Mission of BBC :
The mission is to make the people aware about its services.
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Legal structure of public sector:
This is defined as an structure where the organization works at local level , state level
and national level.
 Local government: it is defined as the administration where local government
operates in districts, towns, cities and countries. This local government have
control over the local area not the wider area. Decision of local government not
affected at larger level.
 State government: This defined as the factors which is focus on making the laws
for a state. This state government Frame the rules and regulations for the
businesses for an specific state.
 Central government: The government holds the power over the unitary state is
defined as central government. The united state is a federal systems of
government in the power are sharing between the central and state government. In
public organisation, it required at least two shareholder and organisation should
be registered with company house.
Private sector:
The administration which is operated by the people or the partners but not by the
government is defined as private sector. The key purpose and objective of these organizations is
to earn huge profit. Tesco is a general merchandises British multinational retailer company,
headquarter in Welwyn garden city UK,. This organisation was founded by jack Cohen as a
group of market stall in 1919 (Charter, 2017).
 Services and product: Tesco provides various type of services such as
household product , clothing , insurance , groceries etc.
 Purpose They want to earn loyalty and create goodwill for consumers.
 Mission of tesco:
the mission is to earn loyalty and trust of customers.
 Vision of tesco:
To expand the market by delivering its customers durable and new sustainable products.
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Legal structure for private sector:
 Sole trader: Sole trader are the people own and run their own business. The
owner of the organizations not solely works to achieve the targets other
employees also helps them in growth opportunities. As sole proprietor owner can
use its social security to reports on taxes.
 Partnership: It is defined as the structure where two or more persons agrees
legally to run a business organization together and share the profit into equal
distribution.
Voluntary sector :
it is defined as the organisation which enriches and provides benefits to the society. The
purpose of these organization is to provide benefit to the society not on the profit. OXFAM is a
charitable organisation which focusing on decreasing global poverty (Deasy and at. el. 2016).
This organisation was developed by OXFAM international inn 1942. voluntary sector is non-
profitable sector which operates collection of tasks.
 Services provides by OXFAM : This organisation provide the services such as
health and education which is effective in reducing the inequality .
legal structure :
 Unincorporated association: It is explained as the association which is
commenced by the number people were they don't have the motive to earn profit.
 Trust : It is the business organisation which is required to present themselves as a
trustee in which there are number of people who works for the organisation.
P2.Explain the size and scope of different type of organisation.
TESCO is one of the most popular company in retail sector. They have around 2300
supermarket store were more than 300000 people works. The main setup of TESCO is in united
Kingdom.
Size and scope of Tesco:
The company have near around five lakh employees across the world who have to
operate there seven thousand stores across the globe. Tesco currently operates in 13 countries.
Planning ro expand to US BECOUSE ITS ALREADY the largest retailer in UK.
Business objectives:
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the main objective is to survive a short term objective at thr time of new firms enter the
market. try to make more possible profit.
Stakeholders:
Tesco company has many stakeholders some of them are shareholders, customers,
government, local community, financiers etc.
OXFAM
This organisation is defined as the global movement of people and working together to
end the injustice of poverty. as a network of people this organisation save , protect , tackle the
inequality that keeps the people poor. It is effective uin buil better lives for themselves and for
the others. OXFAM solve the issues like land right, climate change and the discrimination
against women (Erasmus Strydom, and Rudansky-Kloppers, 2016).
Size and scope OXFAM:
This company has the collaboration with 20 Oxfam organisation with more than 10,000
staff and nearly 50,000 interns and volunteer working around the world. Together with all the
local partners this company works in more than 90 countries as the part of OXFAM. This
organisation spends 25% of its funds on the wages and running cost. This organisation has wide
scope more people wants to connect with this because its help people for their betterment.
Objective:
Organisation have made the motto in which they loves to save the children by delivering
them better education facility, health services and many more.
Stakeholders:
The main stakeholders at Oxfam are: financial supporter, their contribution has great
impact in this organisation but still not enough involved in the campaigns. This would include
its founder, director , board , staff , volunteers, donors, and the other benefits from their work.
British Broadcasting corporations:
this company is worlds oldest national broadcasting organisation and the largest broadcaster in
the world by number of employees.
Size and scope :
Size and scope : BBC considered as the largest broadcaster in the world according the number
of working employees. Its employee over 20,950 and in this 16,672 are in the public sector
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broadcasting. The total number employee staff in the BBC is 35,402 after including part-time,
flexible and fixed contract staff included (Evans, and at. el. 2017).
Objective:
BBC is simple, to enrich peoples lives with programmes and services that is provide
information, education , entertainment by being the most creative organisation in the world. This
organisation has 6 values which people across the BBC share.
Stakeholder:
key stakeholder are creditors , directors, employees, government, owners, suppliers, unions and
the community.
TASK 2
P3. Relationship between various organizational functions and their link to organizational
objectives and structure.
Tesco Plc.
It is a multinational groceries and general merchandise retail company based in UK. Tsco
was founded by Jack Cohen in 1991 it is the third-largest retailer organization in the world. The
company is diversified into different areas such as clothing, retailing of books, furniture,
electronics, petrol, financial services, telecoms services etc. the relationship of different
organizations of Tesco are as follows :
marketing with human resource: Marketing is an important tool for every organization to
promote itself in the competitive market (Hair and at. el. 2015). To carry on the functions of
marketing, employees are required so human resource departments provides employees to
complete activities and task. In the same way when an organization requires human resource,
the company need to announce in the market to full fill the requirements, through marketing
tools such as newspapers, hoardings, advertisements, pamphlets etc. so these two functions of an
organization are interrelated to each other.
Advantages: Marketing helps in promotion of business organizations and human resource
plays a supporting role in execution of marketing.
Disadvantages: Social media marketing is a negative tool in case of fraudulent.
Ineffective human resource can lead to the failure of marketing activities.
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Sales with research and development: To carry on the production and manufacturing activities
first a company need to forecast demand and supply with the help of research and development. .
When a company achieves estimated sale then the R&D department help in developing sales
procedure which is changed with the purpose to divert the focus to different department.
TASK 3
P4. Identification of the effect of external environment on business operations.
Large surroundings basically refers to the outside environment, that includes the
environmental factors which affects organizations. Some of the impact of external factors have
been determined through PESTLE:
PESTLE analysis
PESTLE model is defined as the analytical tool through which it can be easily found that
what are those factor through which organisation is affected. Detail information has been
discussed in context of TESCO.
Political factor- These element consider the plan of action of authorities such as labour laws,
fiscal policy, trade restrictions and political stability of an economy that are required to be
followed by TESCO (Hamilton and Webster, 2018) .
Positive impact- Tesco is an UK based retail company and the government of UK is
stable this positively helps the constant decision making process of the company by not
introducing new laws and regulations at short period this in turn helps the organization to
achieve more growth opportunities.
Negative impact- Fiscal policy of government has a negative impact on Tesco by the rise
in taxation policy and less revenue for business, which affected the profit margins of company.
Economic factor- It includes economic growth, inflation rates, interest rates, exchange rates and
unemployment rates that have a direct or indirect impact upon a company.
Positive impact- Government is offering employment to unemployed peoples which in
turn has a positive impact on Tesco's growth with increase in production and expansion of
business with more labour opportunities.
Negative impact- Increase in inflation rate leads to decrease in the profit of company
when the weighted price of goods raised by the government, the buying capacity of consumer
reduces. That shows a negative impact on the profitability index of Tesco company.
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Social factor- Here, discussion is about population, growth rate, age, career attitudes, health
consciousness and cultural barriers of the environment.
Positive impact- The economy with large Population having different taste and
preferences has positive impact on tesco in terms of market expansion and growth of the
company.
Negative impact- Consciousness for health is increasing immensely which has a negative
impact on sells of ready cooked foods which is being avoided by the consumers and increased
the preference for fresh food.
Technological factor- his factor defines innovations in technology which effects to the operation
of the organizations, It includes research and development and awareness of technological
factors. Tesco can promote its products and services through tv and internet which can lead to
increase in awareness for its product and services (Kljucnikov and at. el. 2016).
Positive impact- Research and development helps tesco in segmenting the market
according to the demand created by people. By with the help of R&D the company can analyse
the competitive market and growth opportunities by customers demand.
Negative impact- If the company lacks technological factors such as promotions through
social media, research of consumers taste and preferences then it has a negative impact for the
organization in creating goodwill for its organization.
Environmental factor- This factor includes weather, climate, environmental policies and
climatological changes of the economy which affects Tesco's in positive and negative aspects.
Positive impact- Tesco is encouraging the people to shop through its online website,
Which saves the fuel and time of people.
Negative impact- The packaging of tesco's products is done with plastic begs which are
non recyclable and affects the environment, it reflects a negative picture of organization.
Legal factor- It includes various laws such as discrimination laws, employment laws and many
more. Tesco follows all the rules and regulations which comes under legal factors.
Positive impact- Tesco provides equal remuneration and incentives to the workers who
performs task under the company, and also render them insurance services by which employees
can enjoy benefits of the company.
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Negative impact- In the year 2016 some workers of Tesco were extremely frustrated with
the age and gender discrimination for low pay rates for night.
TASK.4
P5. Conduct internal and external analysis of organisation to identify strengths and weakness.
SWOT analysis of TESCO company:
Strength Weakness
 They are good in delivering the
services to customer because of that
they have won number of awards.
 TESCO is also known as the giant of
their sector and the reason is
profitability.
 This company has strong financial
background because the company has
significant cash reserve and has wide
property in its portfolio which is
underdeveloped.
 The company has its long history in
UK which in turns will continue for
long period.
 They have better technological
services which is helping them to
sustain in the market.
 They are unable to declare accurate
financial statement due to which
different fines have been imposed.
 The share price as of 25th April is
below the peak
 They have less disposable income and
even they do have high stock selection.
Opportunity Threat
 They do have the opportunity to expand
their business at greater platform as
demand of their product is high.
 This company face the threat of the
economic recession and the credit
crunches to threaten profitably in area
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 TESCO have the option to work as a
joint venture at international platform
through which they can easily enhance
there business.
 In this company there is the more
opportunities as well. There is
significant opportunities to grow online
shopping for tesco as well as provide
the offer home delivery to the
customer's or more area.
 In this company there is the more
opportunity in the private label market
also.
 This company can also provide better
access to the western goods theses area
demanded.
around the world, reducing the number
and size of purchase made by
customer's.
 Competitor threat is in front of tesco
because other global retail may be able
to offer lower price great variety as
well
 food prices are very high which also
reduce the the number of consumers
who buy the product.
 In this company there is the threat of in
term of increasing wages and benefits
around the world add to tesco cost
basis.
 Pressure of grater stakeholder related to
the environment and social
responsibility also adversely impact
tesco cost basis.
P6. strength and weaknesses interrelation with the external macro environment
Analysing of macro environmental factors will help an organisation in improving its
image and performance at workplace by monitoring several opportunities threat which is present
external environment. In order to achieve high benefits tesco must determine the strength and
weakness of particular macro environment factors for formulating strategy accordingly.
Political: This political factors work as the strength of the organisation because this is
effective in increasing the demand for its product and diversified its workforce. Due to decline in
disposal income and house hold income.
Economic: the economic factor work as threat for the tesco because economic
recessions and credit will continue threaten market share and profitability in around the world.
It will affect number and size of purchases which is made by customer's.
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Social: the economy with large population is a strength for the organization to achieve
more growth opportunities in market and It expands the market effectively in term of high
profitability.
Technological: it works as a opportunity for tesco. The company promotes online
shopping for their growth in international market. They can offer services like home delivery to
more an more area.
Environmental: this factor work as threat for company. It will increase the pressure on
company to address environmental issue and adopt way which are beneficial for the company.
Legal : this affects the company by banning current practices without noticing the
company.
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CONCLUSION
It is concluded from the above report that there are number of association and it is
necessary that it should be formed legally. It can be said that size, structure and scope of
organisation are never similar with any of the organisation. Stakeholder are always connected
with company who helps to enhance the business at better platform. SWOT is one of the
essential tool which helps to identify the internal and external strength of the organisation.
PESTLE is also helpful as it indicates all those factor due to which organisation can be affected
or benefited.
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PESTLE Analysis of Tesco. 2019. [Online]. Available Through:
<https://www.marketingtutor.net/tesco-pestle-analysis/>.
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