HND Business Environment Report: Tesco's Internal and External Factors

This report offers a detailed analysis of Tesco's business environment, examining both internal and external factors that influence its operations. The report begins with an introduction to the business environment, highlighting the importance of identifying factors affecting business activities. It then provides an overview of Tesco, a multinational retail company, focusing on its objectives and organizational structure. The report delves into the interrelationships between various organizational functions, including sales and marketing, finance, human resources, administration, production, and research and development, emphasizing their roles in achieving business goals. Furthermore, the report explores the positive and negative impacts of the macro environment on Tesco, utilizing PESTEL analysis to assess political, economic, social, technological, environmental, and legal factors. Finally, the report includes an internal and external analysis of Tesco, including SWOT analysis. The report aims to provide a comprehensive understanding of Tesco's business environment and the factors that contribute to its success.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1 Covered in PPT.................................................................................................................1
P2 Covered in PPT.................................................................................................................1
LO2..................................................................................................................................................1
P3 Relationship between different organization functions.....................................................1
LO3..................................................................................................................................................4
P4 Positive and negative impact the macro environment.......................................................4
LO4..................................................................................................................................................6
P5 Internal and external analysis of Tesco.............................................................................6
P6 Strengths and weakness interrelated with external macro factors.....................................7
CONCLUSION................................................................................................................................8

INTRODUCTION
Business environment is a combination of external and internal factors which affect the
whole business activities. These factors affect the company process in negative and positive way.
It is very important responsibility of a manager to identify the all factors which assist in
achieving the success in business operations. Basically business environment is define ion a two
words Business and Environments. Business define human activities which is perform by person
to earn money. On other hand Environment means the surroundings of aspects. So that business
environment is a set of activities Like political, economical legal and social which is
uncontrollable by the business. Present reports is based on the Tesco, it is retail store which
provide quality products to their customers in order to get higher satisfaction by them. The main
target and aim of this company to satisfy customers needs and wants (Chesbrough,
Vanhaverbeke and West, 2014). When organization analysis their environment it will helps them
to take aggressive advantage from their competitors. In this reports there are various type of firm
like private, public and voluntary sectors. Business environment can affect the Tesco which is
very essential to identify the factors so that organization can attain predetermine targets in
appropriate manner. Organization can also conduct SWOT analysis to evaluate the strength,
weakness, opportunities and threats. Relationship and different function of business organization
also describe in this report.
LO1
P1 Covered in PPT
P2 Covered in PPT
LO2
P3 Relationship between different organization functions
Tesco is a multinational company which is related to the retail store. They provide best
quality of products and service to its customers in order to attain higher satisfaction by them. The
structure of an enterprise is based on its size. Tesco follow its hierarchical structure which assist
in achieving the goals and objectives in appropriate manner (Crane and Matten, 2016). Every
organization have their top level management who are responsible for the lower level they have
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more responsibilities which is beneficial to the organization performance. There are some
important objectives of Tesco which are as follows:
 Tesco wants to expand their business in marketplace which assist in developing the
growth of the company.
 They provide best quality of products and service to its customers at affordable price so
that they can buy its products and increase sales volume.
 They just want to supply all type of product under a roof so that it is convenience of the
services users. They protect the environment so that they reduce wastage of production.
Different type of organisation function:
Every organization wants to grow their business effectively and attain higher
profitability. Tesco have many departments which provide quality of products tom its customers
in order to satisfy customers needs and demand (Chavis, Klapper and Love, 2011). There are
some departments which are essential to the organization to achieve its objectives:
 Finance department
 Sales and marketing department
 Human resources department
 Administration department
 Production departments
 Research and development department
Sales and marketing department: In business organization these department play
important role which providing useful information of the customers needs and demands. This
department of tesco use various type of promotional activities to promote their products in front
of customers and to attain higher profitability in appropriate manner. Tesco also use best
strategies to which is used by the company to increase sales in market. This department is related
with the marketing function for the company, in which manager of the company determine
customers taste and preferences in effective manner which leads in attaining set goals and
objectives in appropriate time frame.
Finance department: It is very important to every organization to run their business
with smoothness. Without finance company can not run their business activities and can not
achieve higher profits. Tesco maintain their budget which describe the income and expenditure
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of the company. It include planing, auditing and organizing of the company finance. They
prepare financial statement on continuous basis which assist in defining the income of the
company. This department is relate with the marketing function because it provide enough
financial funds to the company to operate their activities in effective manner which leads in
attaining end goals and objectives in most effective manner.
Human resource department: This is more important department of every organization
to increase the performance of the company (Chang, Hughes and Hotho, 2011). Without human
resources company can not able to complete their work. Tesco provide better training and
guidance to its staff which assist in developing the work performance of the company. It is HR
managers duty that they motivate their workers by providing rewards and gifts so that they can
done their work with effectiveness and attain best results. Along with this, HR department helps
in marketing function because manager of the company hire skilled and talented employee who
are capable in communicating with customers which helps in attaining competitive advantage in
most effective manner. By this company capture larger marker share form its rivals.
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Administration department: The main aim of this department to provide support to the
organization in order to complete all the task in appropriate time period. Manage organization
activities in effective manner is responsibility of administration department so that they improve
their performance at marketplace. It is responsibility of tesco manage to manage all the work and
motive their employees to complete that work in effective manner so that they can attain goals
and objectives (Bryman and Bell, 2015). Manager provide useful information about the research
to its workers so that they are manage all activities in proper way. Along with this,
administration department define their relation with the research and development function of the
company because it helps in developing better strategies which implement in organization
activities. With the help of this Tesco easily attain their end goals and objectives and also
enhance their profitability level at market place.
Production department: It is more important department for every organization which
produce bets quality of products according to customers needs and wants. Tesco have production
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Illustration 1: Organization Chart of Tesco

department in order to make best quality of product. Its Tesco managers duty to reduce
unnecessary cost by providing better training to their employees so that they can done their work
with efficiency. Production department helps in making final production its service users. This
department of Tecso interrelate with selling and distribution function because it helps in
determining customers taste and preferences in effective manner. By which company easily
enhance their performance level by attaining its end goals and objectives.
Research and development: It is define by the every organization which helps in
identifying customers needs and wants. It also helps in improving their merchandise in
marketplace. Tesco depend on the research department to improve their performance and get
success. They maintain finance to do research so that they can compete their work effectively.
Along with this, it define their relation with marketing function in which manager of the
company undertake research in order to determine the customers needs and preferences in
effective way. By this Tesco easily attain their targets and improve their performance level at
market place.
All these function is very important for the Tesco in order to achieve its goals and
objectives in appropriate time period. This function also evaluating in business process to done
all the works in effective manner which assist in improving the performance of the company at
marketplace. Furthermore, it helps in improving their production activities and at the same time
also enhance their performance level by delivering quality services to its customers. With the
help of this company hit their set target and attain end goals and objectives in appropriate time
frame.
LO3
P4 Positive and negative impact the macro environment
External environments affect the business company which is uncontrollable by the
organization. These factors affect the company in positive and negative way. It is very difficult
to find these elements effectively. It is managers duty to analysis their impact on business
because it affect directly and indirectly. Organization make effective policies to overcome from
these factors and run their business smoothly.
Tesco define these components with the help of conducting PESTEL analysis. This
method is essential to identify the impact on the business. It is used by the organization which
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assist in understanding the business environment easily (Borio, Drehmann and Tsatsaronis,
2014). With the help of this manager of tesco identify their threats which create obstacles in
organization. They eliminate this factor from their process so that they can able to attain goals
and objectives in appropriate time period. On other hand it also helps in taking competitive
advantage from its competitors so that it assist in improving the goodwill in market.
PESTLE analysis:
 Political: This factors are affect to the business performance. In this the company operate
with worldwide and the political factors are influence the performance of the company.
These factor include tax rates, stability of the nation. In this tesco define job opportunities
to increase employment which assist in increase the demand of the products.
 Economical: In this factors the Tesco is highly concerned with it. In it labour cost is one
of the important which can increase the profitability of the company. There are many
elements which improve the goodwill of the company this elements are as fiscal policy,
credit availability and etc. If organization wants to get success so that they are make best
policies for diversification which assist in getting goals and objectives. These factor are
affect the economy of the nation so that they introduce job opportunities to their local
people to reduce unemployment in the country.
 Social: This factors is related to the society which is dynamic nature. It is totally
customers oriented because their demand is change with fashion (Boons and Lüdeke-
Freund, 2013). So that it is necessary to the Tesco to provide quality of products which
helps in attaining higher satisfaction level. The customers demand is influence through
their attitudes so that organization have to provide them accordingly. It is tesco managers
duty to analysis the customers demands.
 Technological: This factor is very important to the organization to develop the business
function which assist in the reducing the consumption of resources. In today aggressive
world, technology play important role which enhance the efficiency. Tesco needs to
adopt new technology to improve their supply chain management and product
management to increase their productivity at marketplace. With the help of this they
provide top quality of products to its customers and get higher satisfaction by them. It
affect positively in the business activities that is boost the company ability which
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complete the task in appropriate time period. On other hand its negative impact is that it
is consume lot of resources in their organization process.
 Environmental: Tesco define their environmental factors which affect the business
activities either directly or indirect way. The organization sign treaties which assist in
protecting the environments from pollution. It is essential for business to understand the
guidelines which is define by the government to keep environment safe.
 Legal: In this analysis government and regulatory bodies are directly affect the business
activities which assist in improving the performance of the Tesco (Barnett and Salomon,
2012). Every company define their rules and regulation which is follow by the every
employees in order to achieve best goals and objective in appropriate time period. This
rules are followed by the organization appropriately.
LO4
P5 Internal and external analysis of Tesco
Organisation can use SWOT analysis to determine its internal and external factors which
affect the operations of the company and adverse affect on the profit level of the enterprise.
Tesco is one of most largest retail store in UK which provide quality goods and services to
customers and clients. They can also attract various clients by giving online advertisement. There
are various resources which is very important to development and growth of the organisation.
These resources includes such as finance, human resources and intangible assets. By using these
resources company can achieve its targets and goals of the organisation. Satisfaction of
customers is very important for success of any enterprise. For this purpose they can launch new
products according to taste and preferences of clients (Auzair, 2011). It is very important to give
quality services and products so it will helps to boost up income level of the company. For
implementing this organisation have to find out different external and internal factors. SWOT
analysis can be used for identification of external factors which are influencing operation of the
company directly.
Details are given below:
Strength: Tesco is the biggest retailer of grocery products in UK. It includes various
strength by which a company can use to provide quality products tro their customers. It also
includes marketing strategies of a enterprise which a company is uses to provide services to
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various clients. Cited company wants to increase customer retention and their loyalty in business
for this purpose they use club card techniques. Along with this it attracts more people of the
society towards them.
Weaknesses: According to this Weak points are include of the company in terms of its
operation. The main problem of Tesco is that prices of products is very high other than its
competitors so it will affect customer choices and income level of the company. Clients do not
buy their products because of high process they are switch to other competitors. This is the
biggest problem of cited organisation.
Opportunities: Company want to expend their business in non food range. For this
purpose they have to plan effective marketing strategies as well as efficient (Aterido, Hallward-
Driemeier and Pagés, 2011). They have an important possibility to increase their market online.
Enterprise can give advertisement online so they can attract lots of customers. They can also
provide free home delivery which feel comfortable to various customers. Quality of product are
much better comparison with to other organisation that will aid them to take competitive
advantage from their competitors.
P6 Strengths and weakness interrelated with external macro factors
In organization PESTEL analysis define external environments by SWOT analysis define
internal and external elements which is affect to the business activities. Laws, inflations and
interest are affect the organization functions. In order to identify the customers needs and
demand they conduct the research process to evaluate it effectively. When organization use old
strategies and methods then they can not compete their competitors in marketplace. Tesco have
to use new methods in order to achieve competitive advantage from its competitors so that they
can easily achieve their predetermine objectives. With the help of using new method they can
develop merchandise which helps in taking best opportunities from the market. This
opportunities define higher profitability and increase their reputation.
Demand of the products and service is very high because it introduce their product at
affordable price to the customers. Company take more and best opportunities which assist in
overcoming by the threats (Ahmed, Aamir and Ijaz, 2011). Environment having dynamic nature
which influence the operational activities of organization so that it is become more beneficial to
the tesco to invite large number of customers to buy the products. When an organization increase
in their product price so that they can lose their customers which will affect to the revenue of the
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company. Tesco make new and attractive products to its customers so that they can satisfy their
needs in continuously basis. It there is any changes in inflation and tax rate so that it affect the
production process which leads to increase labour cost and material cost. It is negative to the
business organization which create hurdle in increasing performance in market place.
CONCLUSION
In above mentioned report can be concluded that business environment is very essential
tom identify the factors and manage the business activities in effective manner. It will assist in
increasing the profitability of the company at marketplace. In this report there are various sectors
which is define the organization nature in market which are as public sector, private sector and
voluntary sector. These sectors are different from each others which is depend on the
organization size. There are some function which helps in doing all the task in appropriate time
so that tesco can achieve goals and objectives in proper way. Business environment is affect the
whole organizational activities which is uncontrollable by the business it assist in taking
important decision regarding the business to boost up the image in market. Organization conduct
SWOT and PESTEL which assist in understanding the internal and external factor of the
company in effective way. They can work in this process to attain goals and objectives.
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