Analysis of Tesco's Business Environment: A Comprehensive Report

This report provides a comprehensive analysis of Tesco, a multinational retail company. It begins with an introduction to different types of organizations (private, public, and voluntary sectors) and their relevance in the international business environment, focusing on how these organizational structures facilitate high growth. The report then delves into a detailed examination of Tesco, including its background, the products and services it offers, and its mission and vision. It also explores the functions of key departments within Tesco, such as finance, human resources, marketing, production, and administration, using organizational charts to illustrate their interrelationships and highlighting both advantages and disadvantages of each function. The second part of the report conducts a PESTLE analysis to identify and discuss the macro-environmental factors (political, economic, social, technological, legal, and environmental) that influence Tesco's operations. A SWOT analysis is then performed to assess Tesco's internal strengths and weaknesses in relation to external opportunities and threats, with an emphasis on the interrelationship between macro factors and the company's strategic positioning. The report concludes with a critical reflection of key findings, evaluating their impact on Tesco's decision-making processes.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Introduction of overview with provide explanation of different types of organisation to make
high growth in international business environment................................................................1
Explanation of each chosen business and include background, ............................................2
Functions for one of the chosen organisation with using chart to show interrelation with
advantages and disadvantages................................................................................................3
TASK 2............................................................................................................................................5
PESTLE analysis to identify and discuss various macro environmental factors that impact on
chosen business......................................................................................................................5
SWOT analysis and show interrelationship with external macro factors...............................6
Critical reflection of key findings and evaluate that influence on decision making process. 9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In order to ascertain effectiveness, it can be stated that business environment considered
interaction with different resources that can be effectively used to seek with more opportunities.
It influences business decisions that can be forces of economic, social, political and
technological actors. These factors are outside the control of enterprise (Hinkelmann, Van der
Merwe and Woitsch, 2016).
Present study based on Tesco which is multinational retailer company and provide
different kinds of grocery and general merchandise products to attract several customers in the
business. In term of measure gross revenue, it is third largest retailer that produce more products
and services at workplace.
In this report, effectiveness successfully develop with consider different types of
enterprise. Furthermore, it assists to focus on background and detail of the products and services
that provided by the business. Moreover, it considers macro environmental analysis that find
impact of outside elements on business functions.
TASK 1
Introduction of overview with provide explanation of different types of organisation to make
high growth in international business environment
In the UK, there are different types of organisation work that ascertained significant
advantages to focus on accomplishment of goals and objectives. In this consideration, high
growth in internation business environment can be successfully gained to attain overall
profitability and effectiveness. Different types of organisation are as follows: Private sector: Private sector business is very important part of every country. Most of
the private business possess intention to make profitability in systematic manner. Industry
or business may start to move further in the country that ascertained desired level of
outcomes (Papilaya, Soisa and Akib, 2015). For instance, Iceland Limited is private
sector business of the country which deals in retail operations and functions. Public sector: They are also existing to provide different kinds of public welfare services
through engage several people in business. It is the best way to deliver goods and services
to their citizens. As a result, main motive of this type of company is increasing welfare of
people without making profits. For instance, AWE (Atomic Weapons Establishment)
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which is public sector business and provide manufacture and support services in the
country. In addition to this, the chosen business Tesco is also public limited company
which deals in retail sector operations and functions to increase share of the enterprise.
The legal aspect of the company is that is consists of partners which tends to follow the
set rules and regulations of the government. This allows business to follow the set
guidelines in such way that everything that it requires is being achieved.
 Voluntary sector: Voluntary sector business refers as organisation which has primary
purpose to create social impact instead of profits. It is also known as third sector because
it is independent from local and national government that is distinctive from private
sector (Kumar and Pradhan, 2016). For instance, British Heart Foundation is charity
business of UK which considered different types of functions and operations for public
benefit. The legal aspect of the voluntary sector is that it consists of Board of Members,
Chief Executive Officer, etc. This ensure that appropriate goals and objectives are being
are achieved.
Explanation of each chosen business and include background,
Private, public and voluntary, all these businesses have following information which
determines effective results in operations and functions: Iceland Limited: Iceland Limited is private sector business which has several products
such as frozen foods, groceries, etc. It is supermarket chain that helps to increase several
numbers of customers to increase profitability. Their main vision is to promote business
through online selling to increase several stores. Furthermore, their mission to operate in
shop online and receive more customers from different areas of the world (Demil, Lecocq
and Zott, 2015).. The company has Limited Liability Companies which is relatively new
form that also combine advantages and of a company with minimum personal liability
and selling stock. There are several stakeholders helps to promote business operations in
positive aspects. AWE (Atomic Weapons Establishment): AWE (Atomic Weapons Establishment) is
public sector company which is responsible for the design, manufacture and support to
gain more success with several facilities. Team is also world renowned scientists which
undertake critical work, provide & maintain design with unique skills and expertise.
There are three shareholders such as Jacobs Engineering group, Lockhead martin
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Corporation and Serco group. They have mission to retain control to accomplish business
objectives and maintain high safety or security. In this business, corporation is owned by
one or more stakeholders. Therefore, they managed board of directors those are elected
and appointed by board of directors (Fan, Lau and Zhao, 2015). Vision of the
organisation is to remove heart and circulatory diseases and their risk factors from UK. British Heart Foundation: British Heart foundation is voluntary sector business which is
charity enterprise of UK. They considered fund through research to beat heartbreak from
heart and circulatory diseases. Therefore, risk factors are also removed that assists to
increase effectiveness in the business. They have mission to beat heartbreak forever.
Legal structure of the company is charitable organisation (Kumar and Pradhan, 2016).
Scope of this business is to support, lifesaving skills, campaigning to establish policies
and minimise risks distributing defibrillators throughout England.
 Tesco: Tesco Plc is one of the largest British multinational groceries and general
merchandise retailer in UK. They have different kinds of products such as supermarket,
hypermarket, superstore and convenience shop. This company has mission to expand
globally to increase more profits and revenue of the operations and functions. Moreover,
they have vision to diversify business in clothing, electronics, financial services, telecom,
etc. (Papilaya, Soisa and Akib, 2015).
Functions for one of the chosen organisations with using chart to show interrelation with
advantages and disadvantages
In order to accomplish business objectives, Tesco has several functions that promote
desired results of the enterprise. It assists to show interaction with several advantages and
disadvantages with organisational chart. Different functions are as follows: Functions of finance department: With finance department, Tesco considered different
types of functions such as recording all the business transactions such as expenses &
incomes, measurement of financial performances, etc. Along with this, it considered
controlling the finance which helps to stay reliable and pay off debts to gain more profits.
Finance department interrelate with many other functions of enterprise to deal with
innovative functions and operations in effective manner. As a result, it has several
advantages that is provided appropriate budget to focus on goals and objectives of the
business. However, when appropriate budget not set for products and services actual
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performance of business not easily measure. Its positive aspect is that it helps the
organisation in achieving set goals and objectives. Along with it, it ensures that set
growth is being achieved. Its negative aspect is that sometimes it tends to make the
organisation face in reaching set goals and objectives. Functions of human resource department: Furthermore, Tesco has another important
department that is human resource. With this consideration, recruiting, selection, training
and developing new staff ascertained to focus on effectiveness. For instance, keeping all
records that possess confidential to stand with data protection act. Main advantage of
these functions are dealing with customer care and services to evaluate services and
recommend improvements (Demil, Lecocq and Zott, 2015).. However, there is
disadvantage that is more cost occur when training, development and promotion must be
placed in the business. Its positive aspect is that is helps the organisation in reaching and
developing new aspect of growth. Its negative aspect showcase that the organisation
tends to face issues in growth and development. Functions of marketing department: Moreover, in marketing department of Tesco
research conducted to collect information and data regarding market trends and customer
requirements. In this way, survey and questionnaires has been prepared for new
development of business. It includes sales promotion and advertisement that make sure
promotion is clear and understandable (Hinkelmann, Van der Merwe and Woitsch, 2016).
Marketing department has interrelation with all other department to provide instruction to
deal with complaints of customers and increase profitability for more improvements. Functions of production department: Production department of Tesco is responsible for
marketing services that provided in offices, vehicle, retailing products. As a result, they
are responsible for delivering appropriate product to customers. They are also ensured
that in business enough stock availability (Fan, Lau and Zhao, 2015). EPOs system is
worked with new technology so that it is responsible to deliver products to consumers.
 Functions of administration department: Administration department of Tesco creates an
ordered way of working that enable to business to run functions smoothly. Therefore, it
brings together various parts to achieve business success and ensure good communication
among management and workers. Proper procedures for controlling and monitoring work
with high level of supervision and well-motivated. This function work effectively in the
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business which has interrelation with marketing department to written down all things
that are being changed. Proper procedures for controlling and monitoring work create
high level of supervision and well-motivated staff (Hinkelmann, Van der Merwe and
Woitsch, 2016).
The functions of Tesco are interrelated for specific purpose as the organisational structure is
a combination of divisional and functional unit. For example, finance depart is linked all the
department for ensure availability of adequate funds and cost efficiency of operations. Further,
marketing department coordinates with HR for training of employees and recruitment of new
skilled employees in department. In addition, research and development department helps
marketing team in market research and production team in taking appropriate action to manage
changes and meet customer needs and expectation.
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Organisational chart
CEO of Tesco
Finance
department
Marketing
Department
HR
Department
Production
Ddepartment
Administration
department

TASK 2
PESTLE analysis to identify and discuss various macro environmental factors that impact on
chosen business
Macro environmental factors are beyond the control of business. Therefore, in Tesco it
creates large impact on functions and operations that impact highly on different activities and
tasks. It is multinational food retailing company so that following elements of macro
environment create large impact on effective functioning on the enterprise: Political factors: Retailing company is operating in worldwide. Therefore, in Tesco
global political factors are greatly influence on their performances. It considered tax
rates, acts of legislations and stability of the country where it operates. Many
governments also encourage to retailers so that the chosen business play important role
for creating employment opportunities. Also, sometimes these political factors lead the
organisation towards facing the issue of growth and development. However, due to
financial instability in the world, many governments encourage retailers to create jobs for
the domestic population due to which internal management is liable to focus on
diversifying workforce. Economic factors: Economic factors are also influencing Tesco as it is most likely to
leverage cost, demand, profit and prices. Hence, company must be aware towards
changes in policies, taxation and other elements that create impact on accessibility of
finance. As it is important to grow business, in international market. Internationalisation
and diversification are major two key strategies that pursued in the company (Fan, Lau
and Zhao, 2015). The negative impact of the economic factors is that, it tends to make the
organisation face profitability issues. Social factors: Social factors are also created major impact on Tesco because of changes
in market trends and customer demand. With this regard, it can be stated that customers
of UK have moved towards bulk shopping. As a result, the chosen business increased
number of non-food items that offered for sale. There are different kinds of goods and
services relate with cultural factors that associated with social elements. Furthermore,
according to customers demand and requirements, it is essential to deal with products and
services (Demil, Lecocq and Zott, 2015). Consequently, the selected business adapts
these changes through accommodating demand of organic products. Sometimes social
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factors make the organisation face issues regarding its cultural growth and development
and make it face growth issues. Technological factors: Advancement of technology factors creates several opportunities
for Tesco. Online selling of products and services is depending on the facilities that
assists to deliver qualitative products and services it can be stated that reduction in cost
associated with positive consideration (Stott, Stone and Fae, 2016). In addition to this, the
chosen business also invested significant amount on energy efficiency to fulfil long term
objectives (PESTLE Analysis for Tesco discusses its Business Environment, 2014).
Technology tends to make the organisation face issues in personal development,
investment and continuous training of staff. Legal factors: Government policies and legislations are also directly impact on
performance of Tesco. For instance, Food Retailing Commission (FRC) in 2004
suggested that code of practice must be introduced that ban with many current practices
such as changing prices without notice or demanding payment from suppliers. In order to
facilitate policies, the chosen organisation provides customers price reductions in
accordance with amount to spent on grocery stores (Hinkelmann, Van der Merwe and
Woitsch, 2016). Introduction of the Food Retailing Commission (FRC) in 2004 Code of
Practice will lead to ban of many current practices which will negatively impact cost
effectiveness of company.
 Environment factors: With increasing pressure on businesses, companies must need to
address environmental issues that adopted ways of operations that benefit to society.
Tesco is also committed to reduce carbon footprint by 50% in 2020. Hence, they need to
minimise waste produced in their stores that enhance social conscience in customers.
SWOT analysis and show interrelationship with external macro factors
Tesco is retailing company which is global enterprise that offers towards different kinds
of food and non-food products in the world. Retailer need to focus on different kinds of food
products that increase competitive environment and handle pressure for rethinking strategy
forward (Papilaya, Soisa and Akib, 2015). Therefore, following SWOT analysis considered in
the business:
Strengths
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 Tesco has gain several numbers of awards for their retail excellence, customer services
and overall shopping experience.
 It is considered as one of the largest and most profitable supermarket which has several
competitors and tried to emulate.
 In the selected business, significant cash reserve also assists to deal with wide range of
property which helps to show strong position in market (Uhl and Gollenia, 2016).
 It has also considerable brand equity in its name that recognised global consideration in
stands for terms of quality, selection and services. Tesco is having employees which are skilled. This help the organisation to achieved set
goals and objectives and most importantly reach required growth and development in
ensuring better social advantage.
Weaknesses
 However, Tesco has several weaknesses in which it has been stated that subsidiaries are
not operating as it is move vulnerable with certain external factors. Hence, finance profit
level of the company adversely impact in recent credit crisis that rebound from global
event (Kumar and Pradhan, 2016).
 Competitive pressure led to price wars that eroded in retailer's profit so that the chosen
business needs to focused on other way to gain competitive advantages.
 There is some retail format in certain nations that performed and well expected that
suggest Tesco to conduct market research.
 Consumers not effectively buying items that are related with reduction in disposal income
so that retailer will easily concentrate on maintaining inventory and selection that living
in high cost inventory (Hinkelmann, Van der Merwe and Woitsch, 2016).
 Retailer is highly dependent on UK's sales so that it creates impact on its functions and
operations that trying to serve in many markets to align with strategic intent. Tesco sometimes tends to faces issues in achieving required profitability because of the
less effective sales and its overall economic growth. This tends to make the organisation
face issues.
Opportunities
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 For Tesco, many opportunities help to expand operations and functions that deal with
strategic alliance that helps to interact several people in many products that helps to
attract more consumers in certain target market (Fan, Lau and Zhao, 2015).
 In the countries, where Tesco operating may be underperforming so that it enhances
market intelligence to improve performance in these areas. The chosen company has significant opportunities to grow their performances in online
shopping to deliver services in many areas (Mathien and Suresh, 2015).
Threats
 Economic recession and credit crunches also continue to threaten market share and
profitability in different areas around the world. Therefore, it reduces number and size of
purchase made by consumers.
 High competitive threats are coming from global retail giants so that it helps to offer
products at lower prices and increase variety as well (Demil, Lecocq and Zott, 2015).
With the help of global supply network, goods can be move faster than the Tesco to make
more innovative to use advance technology.
 Food prices also rising around the world that reduce what consumers buy and much
disposable income also available.
 Tesco has major threat in term of increased wages and benefits in all over the world. This
is because, it increases cost which puts pressure on the pricing strategy.
 Rising in raw material costs are also threatening to the profits of chosen business that is
main cause to expand its suppliers network in all over the world (Begg, Van der Woerd
and Levy, 2018).
 Government regulations and political landscape also putting pressure on the selected
business that consist new regulations that make significant changes to operate structure.
Strength and weaknesses that interrelated with macro environmental factors Political factors: The company has also opportunities to deal in private label areas to
ascertained significant advantages at workplace. As a result, it can be stated that political
factors are highly influences to the selected business that impact negatively on business
outcomes but the strength of firm which is retail excellence and customer satisfaction
denotes ability of Tesco to manage stability in business operations due to private labels of
brands.
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