Tesco: Business Report on Company Strategy and Operations

This business report provides a comprehensive analysis of Tesco, a leading public company in the retail sector. The report begins with an executive summary highlighting Tesco's strong market position and strategic advantages, including its robust brand image and global expansion opportunities facilitated by favorable government policies in various countries. The introduction outlines the scope of the study, which includes an examination of the different types, sizes, and scopes of organizations, as well as the interrelationships between various functional departments within Tesco. The report delves into the internal and external factors influencing Tesco's business operations, utilizing SWOT and PESTLE analyses to assess its strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, legal, and environmental factors impacting its performance. Furthermore, the report explores the significance of globalization on Tesco's organizational strategy and decision-making processes, concluding with a discussion of key findings and recommendations.

Business report

EXECUTIVE SUMMARY
This study has shown that Tesco is a public company which has a strong strategy which helps the
organization to capture the market. Over the years the company has made a remarkable place for
themselves and have a great brand image in market. Internal and external factors which have
been covered in the study has shown that Tesco has a great opportunity in the market for growth
and expanding themselves since they have a strong powerful labour. Globalization for the
company has been in favour for the expansion to take place since the investment would be low
due to the policies the government has come out with of other countries.

Table of Contents
Business report.................................................................................................................................1
INTRODUCTION...........................................................................................................................4
Different type, size and scope of the organizations.....................................................................4
Interrelationship of Functions on Organization Structure...........................................................6
External and Internal influencers on Business Operations..........................................................7
CONCLUSION..............................................................................................................................11
REFRENECES..............................................................................................................................12
The British Petroleum Company plc. 2018. [Online]. Available Through:-
<https://www.referenceforbusiness.com/history2/34/The-British-Petroleum-Company-plc.html>.
........................................................................................................................................................12

INTRODUCTION
All the businesses have a different strategy and tools to function in the market and
understanding the competition in the market is a very important factor. Tesco has made a place
for themselves because of the experience they have gained over time. Tesco has 450,000
employees working in the organization. Company has more than 6,800 stores under there control
and the revenue the organization has made as of 2019 is £63,911 million.
This study will consist of size, scope and type of organization which are present in
market so that the organization can make changes accordingly. It is very important to study those
factors so that the organization can make decisions and select a powerful strategy for themselves.
Interrelationship between the departments and factors influencing the operations of the
organization globally and in the country which will include the internal and external factors as
well.
Different type, size and scope of the organizations
Types of the organization
Profitable organization: Profitable organization are those organizations which has main
purpose to generate high profit in the organization. They apply various type of techniques to
improve GDP of the company. Profit organization enhances country's GDP by paying tax from
the net income. Government doesn't involve in the profit sharing means' owner takes whole
profit.
Non-profit organization: Thus kind organization is specially organized for giving the
services to community where government control over the company. Organization doesn't earn
profit from the people. Second organization doesn't have to pay tax from the net income.
Government notices whole operation of the organizations which is conduct during offering
services to public. The organization includes charitable and social enterprises which has motive
to give the services. Organization gets funds from sponsorships, donation and private and public
sectors.
Non governmental organization: Thus type organization doesn't involve in profit gaining.
The main purpose of the organization to give services to the public without involving
government, in simple term it is government independent organization. In the organization
includes there type of NGO's such as international NGO's (INGOs), business friendly

international NGO's (BINGOs), environmental NGO's (ENGO's). Organization gets funds from
donation and membership programs.
Size of the organization
Small size organization: Such kind organization includes fewer employees' approx 50-
100 in the company and operates organization independently. It can be two type profitable or
non-profitable business. The turnover of the organization is less than €10 million. It is small
scale company and also supports to improve GDP rate of the country. Even government helps
such kind organization by offering bank loans on low interest. Turn over of the medium-sized
business approx €25.9 million (What is an SME?, 2012).
Medium-sized organization: it is medium-sized organization in which posses more than
500 employees, and they offer services in company. Funding sources are friends, relatives and
bank loan. Medium sized organization enhance GDP rate of the organization by paying tax from
the net income. Turnover of the medium-sized business approx £50 million (UK SME Data, Stats
& Charts, 2019).
Micro size organization: it is subset of the small business in which number of employees
more than 0-9. The funding source of the organizations is friend, family and bank loan. The
turnover of the organizations' not more than £2 million.
Based on the purpose
Private sector: Tesco is a private type of company which has main goal to give the value
and generate high profit in the company. It is British multinational groceries and general
merchandiser retailer company and established in Welwyn garden city, England, UK. It offers
their services worldwide. The revenue of the company approx £63,911 million. It is famous for
the variety of products such as supermarket, hypermarket, super store, convenience shop etc.
Public sector: the main purpose of the public sector to offers public services in which
includes goods and their services. Government has control over the organization and services are
military, police, public education etc. there is an example to understand public sector is British
petroleum. It is multinational oil and gas company which offers oil and gas services to
customers. Government involves in whole operations. Number of employees who offers their
services approx 73,000 (The British Petroleum Company plc. 2018).
Voluntary organization: The main purpose of the organization to provide highly services to
community. There is an example of volunteer organization is Oxfam. It is independent charitable

organization which has access on reducing global poverty. In this organization large non-profit
group offers their services to peoples along with extensive operations. Organization offers
services worldwide.
Interrelationship of Functions on Organization Structure
Marketing and HR
Manpower related all the requirements are fulfilled by HR department and that is why it
is very important for Marketing to have good relations if it wants to have best manpower. This
also shows dependence of marketing and organisation on HR department when it is concerned
with staffing the departments (Brunvall and et.al., 2016). Effectiveness and efficiency of
marketing practices is dependent on effectiveness of HR department while recruiting staff. This
also shows dependence of marketing department on HR department.
Human Resource and Finance
The Biggest part of financial expenditure of an organisation is spent on the employees.
HR department which is responsible for employees and their well-being and also look after their
pay and salary needs to have relations with finance department and is dependent on finance
department for fulfilling finance related needs of department and employees. Profitability of the
firm is likely to increase is organisation employs effective manpower and effectiveness of
manpower increases when they are paid good remunerations and benefits. This too shows that
effectiveness of the organisations is also dependent on each other.
Finance and Marketing
Finance and marketing do also have a very close relationship as success of marketing
keep financial well-being in the Tesco. Marketing department on the other hand needs finance
for its marketing campaign and promotional activities which are fulfilled by finance department
which shows interdependence of marketing department and finance department.
Production and Marketing
Production department of Tesco which is dependent on marketing department when it
comes to most important question of what to produce. This question is answered by marketing
department as they are responsible for identifying and understanding requirements of customers.
Present customer centric business environment needs to produce what is needed and required to
customers (Ciccia and Sainsbury, 2018). This requirement of customer's choice and requirements

make marketing one of the most important part of Tesco and production department is also
dependent on this department for the same reason.
Production and Sales
Production and sales share most important and significant relationship in the Tesco.
Production department produces goods and services which are sold by sales department. Another
important question of production which is how much to produce is answered by sales
department. Sales department generate and communicate demand of the product in market to
production department showing their interdependence and relationship in organisational context.
Production department also have a great impact on success of marketing department as sales is
greatly affected by product quality and its price which is controlled and managed by production
department and is affected by its efficiency.
Research and Development and Finance
This is another important relationship in the Tesco in this research and development
department works on product and quality and cost of the product. R&D researches on lowering
the cost of product and increasing its quality for customer satisfaction and increasing customers
and profit (Debra Paul and Cadle, 2019). For practices of R&D all the monetary requirements are
fulfilled by finance department. Finally, it is the finance department that enjoys success of R&D
when their efforts contribute in increasing profit of the Tesco.
External and Internal influencers on Business Operations
There are various factors of business that affects its operations. Internal influencers are
those which exist within the Tesco and it has control over these factors. External influencers are
those which exist outside business environment and Tesco cannot control these factors (Horsnell
and Baldock, 2016). Such factors are analysed through SWOT analysis and PESTLE analysis.
SWOT Analysis
Strengths (internal and certain)
 Biggest grocery retailer in UK.
 Increasing number of stores.
 Geographically diversified.
 Diversified market and product range.
 Several international awards.

 Superior use of technology. Effective supply chain network.
Weaknesses (internal and certain)
 Decrease in operating profit.
 Financial Errors.
 Low cost strategy.
 Poor operational performance in certain markets.
 Fraud trial and accounting errors. Failed operations in UK and Japan.
Opportunities (external and uncertain)
 Expanding business of Jack's.
 Strategic alliances with other brands. Online Business.
Threats (external and uncertain)
 'Fake Farm' legal threat.
 Competition with supermarket giants.
 Economic crisis and credit crunches.
PESTLE Analysis
These are external environmental factors of businesses on which business does not hold
any control. These factors are as follows-
Political- Tesco is a multinational organisation and that is why political factors of all those
countries where Tesco works affect its operations (Nazareth, 2019). Major factors that are
covered in its political factor are tax rates, acts of legislation and political stability of country in
which it operates. Companies who are multinational needs to follow regulations of all those
countries where it operates and many countries encourages retailers to employ local people in
their organisation and to operate smoothly they have to employ local people.
Economical- These factor is concerned with financial status of the people and countries in which
it is operating. Being multinational many countries' economic condition affect Tesco and its
performance in respective country. This also includes economic policies of the country in which
it is operating. Tesco needs to timely ensure availability of finance, changes in policies, taxation

policies and rates. Being a multinational company it is affected by many countries but still it is
dependent on UK as its 30% market is in UK and its headquarter is also there.
Social- Social factor is very challenging and difficult for multinational firms like Tesco (Powell
and Chen, 2019). This includes choice and requirements of people of a country and choices of
people keep changing and is mainly affected by their ethnicity. Tesco when plans its operations
in other countries needs to ensure that it is able to fulfil needs and requirements of the people of
that country otherwise in present customer centric business environment it will be impossible for
business to survive in the market.
Technological- Major driving factor of success. This refers to technological up gradation and
advancement. Tesco's one of strength is that its technology is advanced and which is very helpful
in its performance.
Legal- Legal factor refers to policies of government and laws that are required to be followed by
businesses to operate and function smoothly in a market (Sainsbury, 2019). Tesco have to
business according to various laws and standards of all those countries where it operates and also
policies and regulations of international organisations.
Environmental- This factor includes concern for natural environment. Tesco have to ensure that
its functioning do not affect environment in any negative manner.
Importance of globalization on organizational strategy and decision-making
Globalisation has increased the importance of international trade in changing business
scenario which has lead to growth prospects, reduced dependence on known markets, business
expansion. The increase of international trade over the years has lead companies to work towards
increasing their production targets to expand in overseas markets (Siim and Borchorst, 2017).
Tesco has taken significant steps for effective implementation of organization strategy and
various decision-making tools with globalization factor in mind.
Expansion into new markets: Due to increased globalization effects Tesco has aimed the
organization strategies and decision-making for the food products and other retail services to
expand in international markets outside the UK market. In many global expansions Tesco has
started by opening many convenient hypermarkets. The innovative strategies are also evident
from the formats of store, and the usage of branding in different countries.

Increasing customer satisfaction levels: Globalization has brought tough competitive levels in
the retail market industry where all companies are working towards enhancing their products
variety and services by increasing the focus on customer satisfied products. Tesco has aimed the
decision-making and organizational strategies by keeping the customer satisfaction as the main
criteria to work towards.
Leadership and management : With increasing globalization in the market share companies are
under immense pressure to evolve the managerial skills, and develop the workforce under good
leadership to improve the performance levels. Tesco aims to keep the brand image by strong
leadership and management skills to supervise the workforce with training and developing their
skills to work more effectively.
Globalisation in food retail industry : Tesco is number one food retailer in UK market and has
less scope for organic growth in the domestic market due to which it is aggressively pushing for
entry into new markets (Tamzid and Parves, 2017). Tesco management aims to use various
analytical frameworks for spreading into the global market reach, by studying the incraessng
market trends and working towards changing preferences of customers.
Management skillet : With globalisation into various sectors of products and services Tesco
aims to work towards increasing the performance levels of workforce by providing proper
training and developing their skill sets to enhance the profit margins and increase the quality of
services. With globalisation company Tesco aims in improving the brand name on international
platforms by opening new stores where employees with enhanced skill sets work for incraesing
the performance standards.
Decisions to merge and work internationally : Globalization has aimed companies to
amalgamate with fellow brands in the same industry to improve the performance levels in
countries where stores are underperformed (Woo and Lee, 2018). Tesco has aimed to make
decisions to merge with countries where stores are less in numbers and where Tesco needs to
introduce new variety. By making organizational decisions and strategies to amalgamate in
stores globally Tesco can position itself as a global strong brand and keep up with the loyalty of
customers towards the brand image.
Enhanced competence : Globalization has aimed the companies to increase the productivity
targets and competence in serving the customers with enriched global name, goodwill to keep the
brand image (Woo, 2018). Tesco has expanded the product range and global presence by

increasing its competence to serve the customers with enriched quality shopping experience
which ultimately benefits the company in increasing the market share.
CONCLUSION
On the basis of discussion it can be concluded that Tesco which is a multinational retail
organisation needs to ensure that all its department share a good relationship and their
interdependence is managed efficiently. Weakness and objective of one department does not
affect functioning and efficiency of other department to ensure effectiveness of the whole
organisation. This report also included analysis of various factors which affect operations of
Tesco. For internal analysis of Tesco SWOT (strength, weakness, opportunity and threats) have
been carried out and for external analysis PESTLE analysis have been carried out in this report.
Lastly, what influence globalisation have on organisation strategy and decision-making have also
been discussed in this report.

REFRENECES
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Siim, B. and Borchorst, A., 2017. Gendering European welfare states and citizenship:
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Tamzid, M. and Parves, M.T., 2017. Human Resource Management Policies and Diversity
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Online
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<https://www.referenceforbusiness.com/history2/34/The-British-Petroleum-Company-
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