FE4055QA: Tesco's Business and Economic Environment Analysis

This essay provides a comprehensive analysis of Tesco's business and economic environment, focusing on the UK retail industry. It begins with an industry analysis, highlighting the structure of the retail sector and Tesco's position within it. The essay then employs the STEEPLE framework (Social, Technological, Economical, Environmental, Political, Legal, and Ethical factors) to examine the external forces impacting Tesco's operations. The economic analysis includes discussions of supply and demand determinants, competitiveness in the UK market, and the impact of random shocks, such as the COVID-19 pandemic, on fiscal policy. The report concludes by summarizing the key factors influencing Tesco's business environment and emphasizing the importance of adapting to external challenges to ensure sustained growth and profitability. Desklib offers access to similar essays and study resources for students.

Understanding the
business and economic
environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Industry Analysis........................................................................................................................3
Structure of the chosen industry..................................................................................................4
STEEPLE Analysis.....................................................................................................................4
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refers to the external influence, circumstances which are beyond
the control of the company and also having the impact that hoe they are being influencing in the
market. There are certain type of company which are operating in the market for say, public
company, non-profit organisation and voluntary firms which are operating in the market(Alam
and Grose, 2022). They all are working with the sole aim of having the major consideration in
the large marketplace so that they can sustain in the market for long period of time. Furthermore,
this will cover the factors which are associated with the development and the enhancement of the
company. This assessment will studies the allocation of the resources in an effective manner. For
this, Tesco is the respective public limited company which is operating in the United Kingdom.
The headquarter of this company is in Welwyn garden, England. It is the leading company which
is operating and their operations is being measures on the basis of their gross revenue in the
globe.
MAIN BODY
Industry Analysis
It is the technique that is related to analysing the company and this analyse the position of
an organisation in the particular marketplace. It is the major consideration in which the
respective market is being operating with the proper planning in the given business. The chosen
industry for this is the retail industry from the UK standard industrial classification(SIC 2007).
Furthermore, there are various that are making up the UK grocery market and involves small
supermarket, online trading & conventional stores. There are various supermarket chain that is
Asda, Morrisons and Sainsbury that are suffering by reducing the overall sales of the company
and these are being evaluated and controlled by the competitors as they are not able to sustain in
the market in the large marketplace.

Structure of the chosen industry
There are various that are running their business in the retail store which are considering
the areas that are centralised, operations and regional business. Furthermore, centralised business
operations involves the roles and responsibilities of the store planning and the various factors of
HR manager. These are the various resources which are ensuring the flow of goods and services
in the given marketplace and also meeting the needs of their potential buyer who are resident in
UK. There are various types of retailer which are conducting their business in with the single-
store retailer and chain companies around the world.
STEEPLE Analysis
It is the advance analysis which measures the palaeoenvironmental external factors and it
also give the detailed introduction of the eternal field. The acronym for STEEPLE analysis
stands for Social, technological, Economical, Environmental, Political, legal and Ethical. In
context to Tesco, following factors are explained as follows:
 Social factors: these aspects includes the culture, social norms, values and their belief as
when the individual changed their mind for purchasing the organic goods by which Tesco
can attract the large customer base and they can include the overall consideration in the

target marketplace. These are the aspects which is based on the choices and the eating
habits of the consumer by which they can change their attitude and mind set for
purchasing the particular goods and services.
 Technological factor: With the change in the market trends, there is the sudden change
in the business which is impacting the overall functionality of the business in the target
market. When the company is using the innovative machine or the methods which helps
them to sustain in the competitive market. They are also coping with the new methods
and experiments due to which they attract the large group of customer by giving them
new set of products and services to their potentials buyers. In context to Tesco, they are
operating their business and also introduce that they can pair-up with the Amazon Go,
also they have new technology for making cask less billing which help the buyer to make
quick purchase by which they can avoid the hassle free billing and purchasing in the
market.
 Economical factor: These are the aspects which needs to keep in mind by Tesco as they
impact in adverse manner which is directly occurring in the market and also hurdling the
entire functionality of the business.
Identify the microeconomics factors which affects the demand of products and services
with the demand curve:
Demand is the fundamental concept which is related to the microeconomics and define
the desire of the individual in order to buy the buy the particular goods and services in the target
market. In relation to Tesco, rise in the price of commodity tends to impact the demand of gods
in the target market.

Following are the determinants of demand which are given below:
 Given price of commodity: This is clear that the given prices of the product tend to
rise then the respective demand of the goods tends to rise in the marketplace . It is clear
that the consumer always look for the goods which are affordable to them(Panda and
Gupta, 2022). In relation to Tesco, when the given prices of goods and services are being
sell on high prices then the demand fir such goods tends to reduce in the target market.
 Income of the buyer: it is being known that when the consumer is having the high
income level then it leads to increase the overall demand of goods in the target market,
When the income of the consumer tends to rise the the overall demand of commodities
also increases and vice-versa.
Enlist the determinants of supply and what would cause the supply to fall/rise with the help
of supply curve.
Supply is defined as the total amount of goods which are being available for the sale in
the target market. In relation to Tesco, there are various factors which are influencing the overall
supply of goods in the target market. Following are the various factors which is influencing the
supply of the commodities in the market are explained as follows:
 State of technology: These are the factors which is majorly contributing to the growth of
the business. In relation to Tesco, they are updating its technology in their machine and
methods for producing the commodities in the target market which also leads to increase

the overall supply of goods by which they can generate more revenue and profitability.
These are the aspects which leads to haver the major consideration in the target market.
 Number of firms in the market:There are humourers firms which are operating in the
market and sustaining in the competitive world. It is being stated that when there are
large number of firm operating in the same industry then the supply of such goods tends
to slow down as consumer will be divided in such firms as per their choices and
preferences(Koleša, Burger and Dickmann, 2022). In consideration to Tesco, there are
companies such as Asda, Morrisons who are operating in the same industry and giving
tough competition to the other companies as well.
Discuss the competitiveness of the UK market and its influence on future of the business.
Competitiveness is the word which explains the overall market scenario in the market and
helps the company that they can sustain in the market for long period of time. It is being
analysed that the UK is expecting the to 11.00 in the end of the year 2020 and this is also being
evaluated and recorded that the trading economics global model in the market. It also helps the
Tesco to be the leading company in the globe and they are retaining their good brand image in
the large market segment.
Examples of random shocks that could undermine the UK government fiscal policy and
analyse if there is an monetary and fiscal policy impact the economy of UK.
Random shocks are the emerging critical situations which is being occur and includes the
global pandemic due to which there is the big outburst of the COVID-19 and with this, there is

the complete lock down in various nations and the entire world is going through the major issues
and continuous fighting against this. This is majorly impacting the entire economy of United
Kingdom(Wegwu, 2022). As per this, the government put huge taxes on export and import
which leads to slow down in the company and leads to have restrictions of the people for their
travelling from one place to another by which many corporate sectors is being impacted badly in
the market. All the taxation policy is being implemented in the market and t is being control and
formulated by the government of UK itself. They are ensuring the better functioning of the
business by which they can effectively contribute to the economy of the country. As the UK
government is imposing the huge restrictions in the flow of goods and services in the large
market.
 Environmental factor: These are the factors which includes the ecological balance and
the sustainability in the target marketplace. In this, Tesco is taking the initiative for
enhancing the overall environment by which they can rightly create effective sustainable
environment. Moro-ever, They are focuses on its 2 phase in that they are using the reuse,
remove, recycle and reduce so that they can have the proper working within the market
and the company.
 Political factors:These are the factors which is related to the government stability by the
government and the entire working of the company. When talking about UK, there is the
stable government which help the Tesco is ensuring the smooth functioning of the
business in the target market. There are certain retailing company which are operating in
the respective sector so company needs to follow all the rules which is being imposed by
the government so that they can rightly comply with the political environment of UK.
 Legal factor: These are the certain policies which is basically affects the overall
operations of an organisation which are to be followed in the global market. In context to
this, food retailing industry commission also laid down the certain issues which needs to
be followed by the company who can respectively operating in the similar industry.
 Ethical factors: These are the factors which includes the respect, effective
communication and honesty which ensures the employees to effectively work in the
given organisation(Liu and Xia, 2022). In context to Tesco, they are ensuring th better
working and providing the good working environment to them so that they can retain in
the business for a long period of time.

Discuss the business problem and challenges which is being faced and criticise on the
external effects of a business decision.
Tesco is public operated company which is completely controlled by the government of
UK. With this, they are making effective working by which they are ensuring to follow all the
rules an regulation so that they can rightly sustain in the market for long period of time. But
being a public limited company, they can not go out of the box and can not expect any change
which are not the standard operating procedure of the government.
CONCLUSION
From the above report, it is being summarised that there are various types of business
which are operating in the market and their dole consideration is to ensure their huge profits and
growth in the target market. Moreover, STEEPLE Analysis is being used in order to understand
the impact of the external factors on business environment. In economical factor, demand an
supply are the two aspects which is ensuring the better flow of goods and services in the target
market.

REFERENCES
Books and Journals
Liu, X. and Xia, T., 2022. The innovation paradox of political capital in transition economy firm:
Innovation and political capital. Journal of Business Research, 142, pp.775-790.
Wegwu, M.E., 2022. DEFENSIVE STRATEGIES AND FIRM’S RESILIENCE IN A
DYNAMIC BUSINESS ENVIRONMENT. World Bulletin of Social Sciences, 6, pp.41-
50.
Koleša, I., Burger, A. and Dickmann, M., 2022. The effects of institutions on emerging market
firms’ international assignment location decisions. Economic and Business
Review, 24(1), p.1.
Troise, C. and et. al., 2022. How can SMEs successfully navigate VUCA environment: The role
of agility in the digital transformation era. Technological Forecasting and Social
Change, 174, p.121227.
Panda, A. and Gupta, R.K., 2022. Understanding Organizations and Business Ecosystems in
India Using Business Systems Framework. In Indigenous Indian Management (pp. 307-
345). Palgrave Macmillan, Cham.
Alam, Q. and Grose, R., 2022. Shifting sands in the regional business environment in Australia.
In Regional Businesses in a Changing Global Economy: The Australian Experience (pp.
1-10). Routledge.