Business Environment: Tesco Value Chain and Internal Analysis

This report provides a comprehensive analysis of Tesco's business environment, focusing on its value chain and internal factors. The introduction establishes the importance of business environment analysis for organizational efficiency and growth. The report then delves into a detailed value chain analysis of Tesco, examining primary activities such as inbound logistics, operations, outbound logistics, marketing and sales, and service, as well as secondary activities including firm infrastructure, human resource management, technology development, and procurement. Furthermore, an internal environment analysis is conducted, identifying Tesco's strengths (strong retail network, market share, effective locations, product differentiation, and supply chain), weaknesses (inefficient market analysis, ethical issues, and customer service), opportunities (business expansion, online stores, and new market development), and threats (customer trust, Brexit, and competition). The reflection section highlights the key learnings from the value chain analysis, emphasizing its role in understanding internal and external factors, improving efficiency, and enhancing customer satisfaction. Finally, the conclusion summarizes the report's findings, emphasizing the importance of value chain analysis for Tesco's profitability and sales growth.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
Value Chain Analysis of Tesco...................................................................................................3
Internal Environment Analysis of Tesco.....................................................................................5
Reflection....................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is the system which I integrated with many business environmental
factors which help the business organization to increase its efficiency and provide the quality of
the business organization. All the internal and external factors are combined to form, the
business environment so that they can ensure the efficiency of the business organization. The
analysis of these factors help the business environment to expand its operations and increase its
productivity effectively. The business environment consists of different activities which will also
help the organization to provide a healthy relationship with the economy and also grow the
economy rapidly. The business environment top determines the effective business functions to
archive the objectives of the business organization and gain the market share to grow the
business more effectively. This report has a bride study about the internal and external factors of
Tesco plc. The report has an analysis of what are the various factors which will help the
company to increase its efficiency and become more successful in the market.
Value Chain Analysis of Tesco
Tesco analyzed the importance to increase the efficiency of the business by analyzing the
value of each and every activity which the company is operating which will help the company to
segment the issues and problems and also solve them effectively (Prajogo, 2016). The value
chain analysis is adopted in the company as it helped the company to understand the quality of
each stage and also increase its efficiency which will contribute in the overall growth of the
company. This will help Tesco to create the competitive analysis of the competitors to increase
the market share (Hillary, 2017).
Primary Activities
1. Inbound Logistics- Tesco have a very complex inbound logistics system and also need to
understand all the factors In these activities to provide proper resources and achieve the
efficiency in the operations. Tesco have adopted the Large economy of Scale as it creates
huge value for their products and services. Tesco reinvest the profits in the logistics to
increase the production scale size of the logistics (Teece, 2016). The company have to
innovate the logistics to provide enough space to trans[port the goods to different place
and decrease the cost.

2. Operations- Tesco also have focused on the operation of the company like retail,
manufacturing units of goods as the company is retail giant and also need to improve the
quality of their products to attract more customers to the company. Banking is all the
segmented operation which the company have to focus on in order to evaluate the
efficiency of the company and provide with the better quality of the company.
3. Outbound Logistics- Tesco have to focus on the delivery of the goods and the services I
the such a way that it will decrease the cost of the products. The company have also
introduced many fast delivery option to the customers and also at very less process which
attract the customers and also helped to provide the products directly from the company
so that company can provide their services to the customers and increase the satisfaction
of them (Cepel and et.al., 2018).
4. Marketing and sales- Marketing is the very important aspect of the company as it focuses
on the customer satisfaction ad also help the customers to provide the product value by
communicating it to the customers in a very innovative way by which the customer are
willing to pay the prises and also develop the desire to purchase the products from the
stores.
5. Service- Tesco have developed the strategy to provide the after sales services to the
customers as it also help the company to increase the customer retention and customer
loyalty in the company (Lee, 2017). The company also adopted many leadership
strategies and management styles which helped the company to maintain the services
quality and also increase the satisfaction of the customers. This helped the company to
achieve the efficiency and attain the objectives to increase the profitability and improve
the goodwill in the market.
Secondary Activities
1. Firm Infrastructure- Tesco have the infrastructural design which helped the company to
maintain its efficiency and also manage all the employees to become more potential I the
company. The infrastructure also help the company to attain the quality and financial
aspects of the company (Dolan, Conduit and Fahy, 2015).
2. Human Resource Management- The Human resources are the very important aspect of
the company as the Retail stores need to have the human resources to interact and also
help them provide the better knowledge about the products and services that will also

help the company to increase the sales ad also make the customers loyal to the company.
The human resources management of Tesco also involvement the effective training and
selection of the employees which have the potential to be the company.
3. Technology Development- Tesco also have to increase the ability to analyse the new
technology in the market as it helps the company operation to decrease the cost and
increase the profitability of the company. The technology development will also help the
company to increase the customer attraction as the new technology also help the
customers to increase the satisfaction level (Hamilton and Webster, 2018).
4. Procurement- it is the very essential factor of the company as the procurement is the
purchases of the goods and services of the company which can help the company top
decrease the cost and also increase the quality of products.
Illustration I: Tesco value chain Analysis
Internal Environment Analysis of Tesco
Tesco have determined and adopted an analysis tool by which it can understand all the internal
factors which provide growth to the company and it can also help the company to motivate the
employees to work in the company and increase their performance to achieve the objectives and
maintain the position of the company in the market (Althouse, Allan and Hartt, 2016). The
internal analysis of the company will also help the company to provide a better understanding of

the resources of the company so that they can increase the efficiency of the resources by
adopting new strategies and implementing effective techniques as the internal factor of the
company can be controlled by the company and it can also be change to improve the outcome
according to the will of the company.
Strengths
1. Tesco have a strong network of the retail stores in UK which help the company to
achieve the objectives as the company have a high goodwill and brand name in the
market (Ledgerwood, 2017).
2. The company also have the highest share of the market as the company have increased its
techniques and strategies which attracted many customers and it is now the leader of the
market with more than 25% shares of market coverage.
3. The company have established its stores in very effective locations which can attract their
maximum customers and also increase the sales of the company. Tesco also have the
effective strategies which will increase the satisfaction of the customers and make the
loyal to the company t increase the sales of the company and become more efficient by
gathering information from the customers to improve the quality of the products and
services.
4. The company also have product differentiation in the market so that they can attract all
segments of the customers at various price ranges which are suitable for the income level
of the customers (Holotiuk and Beimborn, 2017).
5. Tesco also have the effective supply chain delivery system which help to provide
products and services to the customers so that they can increase the efficiency of the
company and make them more effective in receiving the products more sooner.
Weaknesses
1. Inefficient to analysis the new markets and also very poor forecasting techniques as the
company have incurred huge loses investing in the new market to establish its base ad
increase the sales of the retail stores.
2. The employees of the company are also not having ethical values as the company have
also convicted of an accounting scandal in the past as it the employee were not true with
their work and by which the company have to suffer and also pay the penalties and huge
amount's they have forged the original values (Ruël and Wolters, 2016).

3. The company is also not efficient in providing the customer loyalty and after services as
many customers switched the company as the Tesco do not fulfill the promises as they
have done to the customers.
Opportunity
1. The company have the opportunity to increase its business by opening new brand and
also increasing the customers need and wants to buy those products and services. The
company have also established a new store which provide discount to the customers.
2. The company ls have the opportunity to establish the online store which will increase the
customer's satisfaction as the new trends are the customers are mostly busy with work
and o nit prefer to go tut but the products so the company can provide the products at
their doorstep and also increase the satisfaction of the customers (Abdullahi and Zainol,
2016).
3. Tesco have the opportunity to develop anew market with the existing products as the
retail stores have the demand in the Asian markets so the company have the effectively
design the products so that they can make the use of all the factors to increase the quality
of the products and services in the new market.
Threats
1. The company also have the threat to lose the efficiency and trust of the customers as the
products can hurt the sentiments of the customers which can also decrease the sales of the
company and impact the revenue generation of the company very adversely (Chukhray
and Mrykhina, 2018).
2. Brexit can also impact the growth of the company as after the Brexit the market will be
unstable and all the customers will be confused and all the investors hill withdraw the
investments from the company.
3. The competitors in the market can also increase the threat of the company as the new
rival also have the innovative ideas which can attract the customers and also decrease the
efficiency of Tesco.
Reflection
From the Value chain analysis of Tesco I have learned that it is very important for there
company to increase its productivity and as I have understood it also helps the company to

deliver to products and services by fulfilling the gaps of the company. The value chain analysis a
have helped me to analyze the important factors of the company like internal and external factors
as these factors are very much responsible to form a business environment of the company
(Escaleras and Chiang, 2017). I also learned that value chain analysis help the company to
increase the value of each and every function of the company by evaluating them separately and
also making the effective strategies which will help the company to maintain the quality of the
company. This also help them to make my in understanding that it can help the customers to like
the company as the company will make the strategies which are based on the customers needs
and behavioral patterns as this will also help the company to increase the sales of the products
and services. The internal and external analysis of the company showed me the factors which can
help the company to increase the efficiency to by formulating and implementing the strategies
which are related to the wants and needs of the customers, as I have learned that Tesco have
focused on the customers value creation and satisfaction of the customer (Komljenovic, Loiselle
and Kumral, 2017).
CONCLUSION
This report had a brief information about the value chain analysis of Tesco plc as it had
increased the profits and sales with the help of this analysis. This had provided an information to
the company about all the operations which are done by the company and also set the effective
standard to increase the performance of all stages which were the analysis. Tesco as a retail giant
had to evaluate the internal factors which helped the company to improve the internal efficiency
and formulate the better output of to achieve the objectives of the company and increase the
profitability.

REFERENCES
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