Business Environment Report: Tesco's Governance and PESTLE Analysis

This report provides a comprehensive analysis of Tesco's business environment, encompassing its governance structure and a detailed PESTLE analysis. The report begins with an introduction to the business environment and then delves into Task 1, which describes Tesco's organizational structure and management, including its history and international operations. Task 2 explores the importance of PESTLE analysis for businesses, explaining its role in monitoring macro-environmental factors and identifying threats and opportunities. Task 3 applies the PESTLE framework to analyze the external environment of Tesco, examining political, economic, social, technological, environmental, and legal factors impacting its operations. The analysis considers factors such as Brexit, economic trends, social changes, and technological advancements in the retail sector. The report concludes by summarizing the key findings and their implications for Tesco's strategic decision-making, highlighting the dynamic nature of the business environment and the importance of adapting to external changes.

Business Environment
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Explain that how Tesco is governed and structured....................................................................3
TASK 2............................................................................................................................................6
Discuss about the importance of carrying out of PESTLE analysis for Tesco............................6
TASK 3............................................................................................................................................7
PESTLE analysis of Tesco plc....................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business environment can defined as internal as well as external factors that affect on how
organization functions. It may include employees, management, supply and demand, customers.
The enterprise environment is basically consist of various factors which providing the better
view of alterations accordingly.
The report will discuss about the organization such as Tesco whereas how entire business
governed and structured in proper manner. It will consider the importance of pestle analysis for
carrying the different strength, weakness. This will help for examining the current growth
opportunities to acquire a lot of information or data in business expansion. Furthermore, it will
describe about the pestle analysis which consider as a tool for analysing overall performance of
Tesco in global marketplace.
TASK 1
Explain that how Tesco is governed and structured.
Tesco is based on the retailer within United Kingdom and consider as largest food retailer in
global marketplace. He was founded in 1919 by Jack Cohen, started for selling the various type
of groceries item in different location in London. After few years, the organization has made a
profit £2 from sales of £5 (Stream, Beckett and Lane, 2016 ). However, it has become
established a latest brand whereas each and every consumer attract towards the product as well
as service. In 1930, Tesco has continuously expanding their business, established the better
position in global world. The enterprise has been recorded their revenue approximately £42,641
million during the year of 2007 (LeBaron, Lister and Dauvergne, 2017 ). Afterwards, it continue
increases day by day. Tesco has started the enterprise which has opened the grocery physical
store but expanded into market in wide range of product as well as services.
Tesco has managed both international as well as national level while implementing the
effective strategies. In order to operate the business in global marketplace. in this way, it plays
important role in identifying the opportunities present of international market. Sometimes, it may
allow for exploiting them. Tesco is one of the development organization to manage their specific
operation and function (Stream, Beckett and Lane, 2016 ). Generally, it operates in different
countries such as Asia, Europe and America. Sometimes, International expansion has affected on
the different facets of company in context of culture, structure and financial status.
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Structure of organization
The product, service and their objectives of tesco is directly linked with each other in context of
scope, structure, size. Sometimes, it may refer to different activities that help for achieving the
growth and development. It is an essential part to maintain flow of information between different
level within tesco. The organization that offers 25000 product and their different categorise over
1200 framework. The primary objective is to provide the better quality of product as well as
services (Stream, Beckett and Lane, 2016 ). Tesco has supplied the various items which are
already used in the offices, homes. In this way, it can easily identify the specific mission of
company which manufacturing the high quality of service to exinsting consumers.
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There are various stakeholder’s performed the significant role within tesco so as they can easily
maintain the different operation in proper manner. Each and every departments are established
the coordination between them. They also sharing the essential information from one department
to another.
Tesco have considerations of different member within committee such as John Allan
(Non-executive chairman), Dave Lewis (Chief executive), Deanna (Senior directors). These are
important peoples in tesco to participant the significant role in different enterprise activities
(Gordon, Mueses and Ong-a-Kwie, 2020).
The tesco should be used the corporate Governance framework that always supports board
of directors. In order to deliver the better stratgey and also increased the long term sustainability
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in context of growth as well as development. In this way, it is very important for directors to
make better decision in business expansion (Ørtenblad, Larsen and Suebpongsang, 2020). The
board is supported by different activities, so as each of committee member which ensure the righ
level of attention. Afterwards, it also considerations of specific matter which related to business
improvement.
TASK 2
Discuss about the importance of carrying out of PESTLE analysis for Tesco.
Pestle analysis is a type of tool or platform that help for analysing the importance of
organization in marketplace. On other hand, it refer to the framework used by marketers to
monitor as well as analyse the macro-environmental factors, which are primarily impact on the
organization. As a result, it become easier for Tesco to find out the certain threats, weakness in
proper manner. Pestle stands for political, social, economic, technology and environmental.
These are dividing into different way to conduct the analysis (Ørtenblad, Larsen and
Suebpongsang, 2020). It is useful for Tesco to start with the own business, if they have an
existing enterprises.
Tesco has given more prior to determine the strong indication on impact of different
criterion. In context of political factor, Tesco has consider the different political issues that
directly affecting on the entire business performance. In this way, it also required to understand
the government policy, stability and instability in overseas markets (Ørtenblad, Larsen and
Suebpongsang, 2020). The importance of political factor that often have an impact on the Tesco.
Through this, it needs to able for responding towards existing the anticipated future legislation.
Sometimes, it also supports for adjusting their marketing policies and procedures.
The significance of economic factor that have a significant impact on how Tesco does
business and also how they are becoming profitable (Stream, Beckett and Lane, 2016). This
factor will provide the benefits for Tesco to identify the economic growth, interest rate.
Furthermore, these factors also dividing into different groups such as Microeconomic and
macroeconomic. It deals with the business management on the basis of demand in given
economy.
Tesco has carrying out the social factor that involved the share belief, attitude of large
population. In order to identify the preference, demand of particular item and service in
marketplace. It became useful for Tesco to find out the demand of existing customer. The most
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important thing is to analyse the preference so as they can use various online tool which always
support for gathering large amount of information or data. Moreover, it may use the social media
technology because each and every person access to check availability of product. This will help
for marketers to identify the major interest of client towards which item or service. in this way, it
can be considered the social factor which help for expanding the business in both international as
well as national level. Tesco is a leading brand which has already expanding their business
internationally. Each and every consumer have known about the brand value, reputation so that it
easier for targeting large population in other countries (Stream, Beckett and Lane, 2016 ). At that
time, social factor may acquire a lot of information about the customer lifestyle, interest that’s
why, Tesco has used this factor to improve their business capability and ability. In another
words, it is positively impact on the overall brand reputation to gain more competitive advantage.
An advancement of technology is majorly play important role in different areas. Tesco has
adopted the innovation in their business and target more consumers. On the other hand, there are
various marketing channel that could adopted by Tesco therefore, they were directly interacted
with client. In order to resolve their queries if any client does not understand the product as well
as service (Ørtenblad, Larsen and Suebpongsang, 2020). Various marketing channel such as
social media platform, Facebook and website. These are supporting for business to use as
advertisement approach. In this way, there are large number of customer attracts towards product
as well as service. Modern technology will support for easily expanding the business in global
world.
Furthermore, legal factor has another importance to include equal opportunities, standards
and consumer rights. These are providing the customer by Tesco, follows the rules and
regulation to maintain the business environment. This factor is clearly setting the legislation
whereas every customer can access information and also resolve their queries. In order to
provide the right where they also register complaint against enterprise. For Tesco, trade globally
this become a tricky to get right way in different countries (Stream, Beckett and Lane, 2016).
The best way to conduct market research while implementing an appropriate regulations.
Afterwards, it will be started to follow the different steps in proper manner.
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TASK 3-
PESTLE analysis of Tesco plc
The analysis will help in there providing the detailed level of external analysis of the Tesco
retail super markets in order to have the analysing the unpredictable business environment by
discussing the various operating factors for the company significant operation and performance.
The company is not only having the dealing in the retail products but have the expanding level of
opportunities in the broadband, mobile networks and the insurance services in significant manner
(Rosnizam and et.al., 2020). This analysis has the range of the strategic purposes for the
management and the marketing in order to have the more special indicatives for adding the
completeness in the retail market which is formulated in perfect manner. So, this model has
evolution on the political, economic, social, technological, environmental and legal factors
affecting the retail chain.
Political Factors
The range of the political factor have the effecting of the Tesco company in direct and indirect
ways as the Brexit have been considered as the important factors which have the influence in the
Tesco competitiveness business positions in the British retail market. The firm have the supplier
not only in UK but also abroad which have the significant impact of the firm distribution and
productivity. However, the withdrawal of the UK from EU has the increased the fresh food
import as which is putting the additional level of pressure in the profit margin. In addition, the
UK is stable countries in terms of political perspectives having the translating he low level of
corruptions and bureaucracy.
Economic Factors
Various level of macro environment factor has the effecting the Tesco profitability at the greater
extent in which the cost of labour is important factor which is greatly impacting their revenue of
the supermarket chains (Williams, 2017). The annual wage bill account of the company is GBH
4.4 million as the result the recent increase n the national minimum wages of 11% in the UK
have the impact of GBH 495 million on Tesco. This is economically stated as the UK have the
creation of the favourable business environments. The costumer has the increased level of
costumer purchasing powered have increased the level of unemployment have reduced.
However, Brexit is expected to result in a drop in consumption from Brits, which would
negatively affect Tesco’s financial performance
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Social Factors
Health consciousness have been the key of the social level trends which tends to have the
significant impact over the Tesco competitiveness in the UK retail markets. There are sales of the
organic level of food and the drinks which are reported in the country tens to have the increased
by the rise in the sales by almost 20% as the strongest level in the decade. As the population in
getting older as important social factors which have considered to Tesco older people have the
tending to purchase fewer food products in the respective store (Bentham, 2018). Hence, the
company have the developing the more level of product lines which is keeping the mind the
regarding the social changes which have taken over the society in respective manner.
Technological Factors
Technology have the key environmental factors which have the direct level of impacts in the
term of Tesco competitiveness in the retail market of the UK. There company have the
implementation of the different range of technology advancements such as radio-frequency
identification, digital marketing, and analytics. The firm have presented the social media
environments by having significant of follower on the Facebook and twitter. The firm have the
preparing to have the implementing of artificial technology in supply and value chains by
keeping the customer as the top priority in significant manner. The firm have the significant
level of offering of downloading the app which can have the app for the shopping the getting the
loyalty points have the love in the convincing the shopping to have the scan on the shop check
points as the customer shops and significant tag permits as it is helpful in saves times an along
cost as well.
Environmental Factors
The firm have the significant level of collaboration in the global action plans by giving the
employment to the significant level of individuals in order to have the helping reinforcing
positive environments by friendly behaviour (Hopkin, 2018). The individuals have turned out to
be energy ambassador in order to have reduction in the carbon foot prints of the company. As
the result, the firm have reduction in absolute carbon emission by the 26% as environmentally
sustainable. In the year 2017 the firm have switched about the 100% renewable electricity in the
UK as the planning to the extrapolate to all practicing the stories have the store all around the
globe by the year 2030. Nevertheless, the tightening the environmental regulations and policies
have the negative impacts on the competitive position in the UK.
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Legal Factors
At the recent time, the company have the running around the 3500 stores in the UK which have
the steadily increasing the online grocery capacities which have the achieving the through the
collections and analysing the respective information in the terms of the costumer behaviours
preference and wants. The regulation has the significantly legal of limiting the Tesco company in
term of ability to have collecting the store and processing the customer personals data
information. The firm have the significant level of fascinating the code of practices such as the
changing the prices as the customer price reductions as the useful in purchasing in order to have
he several levels of promotions offer in which the process and lowered (Woodward and Veal,
2019). Tesco have the legal action in term of the accounting fraud and the misleading the
investors in order to have the settle level of legal actions by conducting the different operations
with Food Retailing Commission (FRC) strict code of practice.
CONCLUSION
Hence, the Tesco have to face serious level of threats and opportunities in the supermarket
industry which have the organising hold in the company. The firm have the looking out at the
financial health and completeness in order to have the utilization of the firm strength and
weakness as the strong level of brand images in order to have the sustained competitiveness
advantage. The Tesco is dealing in the retail products along with expanding level of
opportunities in the broadband, mobile networks and the insurance services in significant
manner. On the other hand the management and the structure of the company tends to have there
positive level of the strategic organization along with the implication the different model in order
to have the strategic formulation in order to gains the competitive position in the market.
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REFERENCES
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mega-merger. Teaching Business & Economics, 22(3). pp.11-12.
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important market considerations. In Food Safety and Quality Systems in Developing
Countries (pp. 125-184). Academic Press.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.
LeBaron, G., Lister, J. and Dauvergne, P., 2017. Governing global supply chain sustainability
through the ethical audit regime. Globalizations. 14(6). pp.958-975.
Ørtenblad, S.B., Larsen, M.N. and Suebpongsang, P., 2020. Multi-dimensional dynamics and
spatial connections in food retail markets in Thailand. Geografiska Annaler: Series B,
Human Geography. 102(1). pp.40-60.
Rosnizam, M.R.A.B and et.al., 2020. Market Opportunities and Challenges: A Case Study of
Tesco. Journal of the community development in Asia, 3(2). pp.18-27.
Stream, C.M., Beckett, A. and Lane, C., 2016 Governing the Consumer: Every Little Helps.
Williams, C., 2017. Complexity Of Modern Management.
Woodward, R. and Veal, T., 2019. KEEPING IT ALL TOGETHER. Teaching Business &
Economics, 23(2). pp.27-29.
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