Report: Business Environment Analysis of TESCO (BUS 201)

This report provides a comprehensive analysis of the business environment of TESCO, a multinational grocery and general merchandise company. It delves into the internal and external factors influencing TESCO's operations, including its collaborative business culture, economic and non-economic environmental aspects. The report examines the role of business, natural, and cultural environments in shaping the organization's behavior. It explores the impact of macro and micro factors, such as tax rates, unemployment, market demand, and competition. Furthermore, it includes a PESTEL analysis, considering political, economic, social, technological, environmental, and legal factors, as well as a SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report emphasizes the importance of adapting to changing customer trends and the competitive landscape to achieve sustainable performance and competitive advantage. This report is designed to provide a detailed overview of TESCO's business environment, its strategic positioning, and its ability to thrive in a dynamic market.

1. ORGANIZATION AND
BUSINESS
ENVIRONMENT- REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Role of business, natural as well as cultural environment for shaping organization's behaviour
................................................................................................................................................4
PESTEL analysis and SWOT analysis of company ..............................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is basically the collection as well as mixture of the internal as well
as external factors like customers, employees, supply etc which impacts the organization in a
great way. Business environment is one of the most deciding factor for the success of each and
every organization. Business environment is predominately of two types which are internal
environment and external environment. Internal environment mainly consist of analyzing the
strengths, weakness, threats, employees, management of the organization which impacts it
internally. External factors like political factors, socio-cultural, economical, legal factors mainly
affects the operations of organization externally. In the nutshell, there are mainly two types of
the business environment which impacts organization which are economic and non-economic
environment. It is highly essential for each and every organization to asses the business
environment in order to gain the competitive advantage and fulfill needs as well as demands of
customers. As the business environment is highly competitive, dynamic as well as challenging
thus the organizations are required to continuously analyze the environment in order to resolve
the various problems and bring innovation in the business. The frequently changing customer
trends, political factors, legal policies are highly influential for the organization thus in order to
gain an edge over competitors and survive in the cut-throat competition, it becomes highly
crucial for every organization whether big or small to adapt to this changing scenario and
environment. The business environment affects the performance as well as sustainability of
organization and transforms their overall operations and supply chain. This report mainly highly
the business environment of the renowned organization TESCO. TESCO is basically the
multinational grocery as well as general merchandise being established in 1919 and
headquartered in England, United Kingdom. This organization mainly deals in books, clothing,
petrol, telecom, financial services and many more. The main aim of this report is to understand
and study the different types of environment which affects the operations as well as activities of
TESCO. Along with this, major objective of report is to have the in-depth analysis if various
external as well as internal factors which affects the functioning of TESCO.
This report gives the overview of role of business, natural as well as cultural environment
for shaping organization's behaviour and PESTEL as well as SWOT analysis or organization.

MAIN BODY
Role of business, natural as well as cultural environment for shaping organization's behaviour
The business cultural environment plays a great role within organization and thus shapes
the overall behavior of the company. The business culture is the mixture and integration of
various values, beliefs, perception of the employees and management which makes up the
organization and thus determine the overall productivity of organization (Reese, 2019). The
business culture is one of the major contributing factor towards profitability ad performance of
the organization. Talking about the business culture of TESCO, this company has a collaborative
culture which becomes the major driver of its success. TESCO is majorly known for its
imperative and highly influential culture which shapes its behavior. TESCO mainly focuses on
the team culture and thus is highly team-oriented which helps them to foster the innovation and
empowers employees. This culture eventually shapes the behavior as well as overall performance
of this organization. The team-oriented culture of TESCO helps the employees to thrive
professionally as well as personally and thus provides the healthy blend of enjoyment, work and
personal development. TESCO has nurtured its workplace from past few years and its imperative
culture has helped the organization to achieve competitive advantage and establish position in
the market. Thus, the business culture of TESCO has been the highly powerful aspect which has
helped the organization to shape its behavior (Van Looy and Van den Bergh, 2018).
There are two type of economical environments which affect the profitability of the
TESCO company and it is important for the leaders and mangers of t6he company to understand
affect of economics and non-economic factors (Bull and et.al., 2016). The term economical
environment refers to the all external factors which influence buying of the customers and
business and therefore affect the performance of the TESCO company. There are factors are
often beyond companies control, and may be either large and small scale . Macro factors can
include the tax rates , when government change the tax structure then it affects the prices of the
product and customers have to pay more prices for the products. Increase in the unemployment
rates in the country can be helpful for the TESCO because people will be ready to work from
them in low salaries which can affect on their profitability because they will not need to recruit
employees from the other counties (Cepel and et.al., 2018). They will get employees in the same
country where they are operating their business. Micro factors which include the size of the
available market and demand of the product and services offer by the TESCO. Demand of the

product and services change with the time so it is important for the TESCO company to develop
their product and their design, so they can stay in the competition. They have to find what
customers need and according to their need they have to develop their product and provide
better product a design to the customers which affect on the company's profitability, and they can
show their name as a emerging brand (Gürel and Tat., 2017). Competition is also micro factors
in which increase in the competition in the retail market is threat for the company so it is
important for the TESCO company leaders to make strategies related to the product, price and
their services, so they can gain customers locality and take competitive advantages in the
competitive market.
The non-economic environment exercising a powerful influence the TESCO enterprise.
Usually the economic environmental component are the prime factors for all type of the business
practices . Social cultural environment- it is important for the TESCO company to look for the
socially and provide them product which satisfy their social life and basic needs. Like they can
provide products to the farmers in less price, so they can use them for the farming and grow
their crops more better. “Non economical environment” also include natural environment
which consists of the Geographical environment and ecological environment (Hamilton and
Webster., 2018). Geographical considerations determine the some figure of business decisions.
Tea and coffee raiser are preferable to be place like hill regions, where the environmental
condition are appropriate for preparing the crops. The people tend to have related tastes in the
specific geographic location. Thus, this product is to much used by South Indian people, may
but there are very less buyers in northern side, because of environmental conditions are different.
Also, the arability of the raw material and the other product in the specific geographical location
affects the localization decision of the TESCO organization business. Because it is low-budget to
transfer finished goods as compare to the raw material. The natural structure of the area where
TESCO is operating their business, whether it is Hilly, plain or the sea cost , also affect
companies strategy and their decision-making by the leaders (Iguisi., 2018). Hilly location of
this TESCO business will be not suitable because transformation of the goods can be difficult
and take time to deliver goods, unless the raw material availableness or the appropriate
environmental condition confirm their location in that location. “Ecological Environment” To
reservation the society, it is necessary for the TESCO company to defend the surround.
Therefore they must take measurement to save the natural environment rather than damaging the

environment. Nature is important for us and it gives us – land, air, hills , forest etc. and the water
is the form of rivers and water body. IT is responsibility of the TESCO company to protect the
environment and create better environment for the people who leave nearby their shop[ location
(Krajnakova, Navickas and Kontautiene., 2018). They can plant trees nearby their stores people
who are nearby their stores will get fresh air and natural environment. It will also increase their
reputation in the market and attract customers. It will affect on their brand name because they
will give support to the good environment. “Demographic environment”- refers to the proper
study of human population specially their education, size, age, sex, Geographic concentration
and dispersion urban and rural population etc. Information about the human population is of the
great significance to the TESCO business it not only helps this company to select the products
which customers want5 but also helps to select the distribution channels , advertisement media,
choice of marketing methods and other business decision of this company. It is important for the
marketing team of the company to study about this all elements, so they can understand what
people need and which product can satisfy their customers (Lin, Die and Renpu., 2019). They
can develop their product according the demand and needs of the customers and satisfy their
needs. Some of the products can be useful for the particular age group like baby products. This
can be used by the babies who have age between 2 and 3 or last 4. There will be no use of those
products for the adult age group but target of the TESCO will be their parents, so they will have
to attract them to buy those products for their child. Physical and ''Technical environment' –
possible shortage of the unsure raw material for example – coal,oil, minerals , unstable price of
the force increase the levels of the uncleanness : changing function of authorities in environment
security are a some of the dangers this global is facing on physical surroundings forces. Keeping
these forces in mind, world thinkers have expressed their concern over whether the physical
environment is being irreparably damaged by the industrial and other business activities of
today’s modern nations. Environmentalism has now shown up (Mpinganjira, Roberts-Lombard
and Svensson., 2017). every nation is focusing to recycle and conserve their natural resources
through the energetic movement. This is because whole worldwide is about to face the crisis on
may tally of recent pace of the usage of material continues without looking. Ecologic equality
may also be disarranged. The application of the modern engineering in the retailer industry , this
is now felt, track to fast economic development at the huge social cost of the declension of the
physical environment around us for example – pollution, noise , water , so on and so forth. The

creation of price like this being measure by biologists , social scientist, consumers ad
environmentalist. “ governmental environment” Mostly the authorities is the political
organization but this has a societal intention. This supply the means and the ways to maximizing
social welfare and maximize social price. This the demographic set up, the theorization of the
powerful political party influence on the TESCO management , ownership and their sizing of the
business. The right-wing inclination of the powerful political parties will formulating legal pro-
business polices while their left-wing inclination will pass judgment and measures like
nationalization and expansion of the public sectors. This also includes the legal environment in
which TESCO company have to follow all the legal rules of the governmental to run their
business. Without having legal rights they cannot run their business. The lawful environment
also refers to the national policy environment. The huge governmental system of the Laws and
regulations, argumentation decisions, political bureaucracy , and the law processes have gain the
impact on the business decisions. The past of the business law during the past 100 years has
been characterised by the three well-defined law philosophies that is,
PESTEL analysis and SWOT analysis of company
PESTEL analysis Of TESCO
Political factor
TESCIO company is operative their business in worldwide, so they are affected with the
global political factor. This affect on their business activities and companies performance in the
market. When tax structure of the any particular country change then it affect on the companies'
profitability (Pan, Chen and Zhan., 2019). They have to pay taxes to the government, so they can
continue the business but some governments give them relief in the taxes and encourage them
to come into their country and open their business because retailers like TESCO creates jobs for
the people.
Economical factor
Demand in the market change with the time and it is important for the TESCO company
to analyses the market and understand what customers want from them. Change in demand affect
on the decision-making and strategies of the company because they have to analyses the market
and make new strategies to develop their product, so they can take competitive advantages and
stay in the competition.
social factor

Because of the social changes in the market, trends shows that buyers in the United
Kingdom have shifted towards the mass purchasing and one stop purchasing. This affect on the
TESCO, and they have gain the number of the non- food products and bring them for the sale.
Most of the products and services demand by the TESCO buyers influence by the attitude and
beliefs which , in turn are influenced by the social conditioning. It is because people are
becoming more health consensus because of these varieties of foods and approaches are
changing continuously.
Technological factor
Technology helps this company to take competitive advantages, and they are able to
expand their business more (Prajog., 2016). They are having their own shopping website where
people can go shopping and discount. This is usefully for the customers because customers do
not have to go to TESCO stores. This company deliver their product directly to their home which
saves their time and money both. Customers just have to order their product and TESCO delivery
team will deliver their product to their home.
Environmental factor
With enhanced force on institutions to address environmental problems and to borrow
ways of dealing which what would welfare for the people, Tesco is distinctly given their
commitment to reducing its carbon foot-mark by 50% till the end of 2020. Also, Tesco is
decreasing the waste material produced in their shops by acceleration social moral sense in the
consumers.
Legal
TESCO company is following all the legal rules of the cuties where they are operating
their business, and they are having all the right to run their business.
SWOT analysis of TESCO
Strength
 TESCO is one of the sizable distributor retailer company in the worldwide, and they also
won awards for their perfect retail (Krajnakova, Navickas and Kontautiene., 2018) .
 This organization has significant currency reserves and a deep reach of place in its list yet
undeveloped, which gives the strong financial place to them.

 this company has sizable brand assets in their name with the international recolonization
and regard for what this company position for in the term of services, quality and
selection.
Weakness
 Competitive pressure in the Retail market give pressure to the TESCO to decrease their
prices which affected on their profitability (Lin, Die and Renpu., 2019).
 Some of TESCO’s subsidiaries are not operating as well as they are more vulnerable to
certain external factors. For example, TESCO Finance profit
 most of the consumers may not be buying product from the TESCO company because
ODF their less disposable income and this company have adjusted their inventory and
selection.
Opportunities
 There are many opportunities for strategic confederation with other brands and admired
the organizations to offer new products and also attract more new buyers in positive
target market.
 There are some countries where this company is not performing well in their business
could be opportunities for them if they collaborate with the other companies and
increase their profitability in the market and take competitive advantages.
Threats
 there are many other retailers who are giving competition in the global level, those
competitors can may be able to provide fewer prices and greater varieties of their product
and services which will inverse their chances to overtake the TESCO company and show
their presence in the market as a brand.
 Prices of the food is increasing in all around the world which is threat for the TESCO
company.

CONCLUSION
It has been summarized that business environment plays an essential function for each
and every organization and thus shapes it in both positive as well as negative way. The business
environment mainly encompasses business culture as well as natural environment which affects
the overall operations of the organization to a great extent. Thus, in this way business
environment have a crucial role to play within organization whether it is big or small. The
business culture which is one of the significant and most important aspect of the business
environment generally impacts the overall performance and productivity of the company in
highly imperative way. There are various kinds of business culture which are being followed by
the organizations. Every organization is mainly determined as well as recognized by its culture
and its business culture largely determines its success as well as failure. On the other side,
natural environment within which the organization mainly operates also poses a great impact
upon its functioning. Like when the weather conditions remain adverse then organization mainly
faces problems in the acquirement of raw material which are needed for manufacturing the
product. Apart from these two aspects, business environment mainly consist of external and
internal environment. The external environment helps as well as assist the organizations to
evaluate the various external factors and elements that affects their organization and becomes
roadblock in their success. These external environment consist of numerous factors like political
environment, legal factors, economic conditions, socio-cultural factors etc. Like when the
interest rates decline then it becomes easier for the organizations to borrow funds and take loans
for their business operations like when tax rate of country increases then this poses a problem in
trading. Thus, it is highly essential for the organizations to analyze external environment for
achieving competitive advantage. Internal environment on the other hand, mainly helps the
organizations to evaluate their internal capabilities as well as assist them to identify that what are
their strength and weakness and what opportunities and threats might affect their performance in
market and their functioning. For analyzing the internal environment, organizations uses various
tools and framework among which the mist effective and remarkable one is SWOT analysis.
Through this tool, organizations are able to examine that what are their strength and weakness
which impact them in positive and negative way and what opportunities they can exploit for
overcoming their weakness. This also helps organizations to recognize the various threats which
might hinder their performance in the market and will affect their brand image.

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