Report on Tesco's Business Environment: Micro and Macro Analysis

This report provides a comprehensive analysis of Tesco's business environment, encompassing various organizational types, functions, and the interplay between them. It begins by defining different organizational structures such as public, private, and voluntary entities, and their respective purposes. The report then delves into the size and scope of organizations, using Tesco, Pound Land, and The National Trust as examples. It examines the relationship between different organizational functions, including sales, operations, human resources, marketing, and finance, highlighting their interconnectedness and impact on overall business objectives. The report further explores the positive and negative impacts of the microenvironment on Tesco, utilizing PESTEL analysis to assess political, economic, social, technological, environmental, and legal factors. Finally, it discusses internal and external analysis and how strengths and weaknesses interrelate with external macro factors, concluding with a summary of key findings and references.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Various types and purposes of organisations.........................................................................3
P2. Size and scope of different type of organisation...................................................................4
LO2..................................................................................................................................................6
P3. Relationship between different organisation functions.........................................................6
LO3..................................................................................................................................................8
P4. Positive and negative impacts of micro environment............................................................8
LO4................................................................................................................................................10
P5 Internal and External Analysis.............................................................................................10
P6 Strengths and Weaknesses Interrelate with External Macro Factors...................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business and business environment topic highly need to be discussed in any company or
business, because by discussing this topic, top-level management of a company can easily make
such strategies which can provide it great growth opportunities in the market. There are lots of
factors always exists in the business environment of a business which mostly affect that
particular business in both manners positively and negatively. So that, upper management of a
company need to maintain an effectiveness within it’s all functions for easily dealing the impact
of these factors. Currently each business or companies within all around the world is focusing on
making its business environment more and more productive, because this is the only way to
achieve excellent results in the market in this dynamic and modern world (Roetzel,2019). This is
report discusses business environment of Tesco. The Tesco is very reputed retail company of the
United Kingdom which has successfully expanded its different business operations in many of
countries. Some major factors and aspects of Tesco’s business environment also has been
discussed in this report.
LO1
P1 Various types and purposes of organisations
There are various types of organisations available in the market, like; public, private and
voluntary. These organisations are existing in the market for different purposes, in which these
all types of organisations have been described below with their specific purposes. A legal
structure also has been added below which every business should be followed in its daily
operations.
Public Organisations: Public organisations always runs their business operations at the large
scale within the market. For example; Tesco is a public retail organisation, in which this
organisation has succeeded in highly expanding its business operations in lots of countries. A
public organisation always sells its shares publicly, so that any person can easily buy shares of
public organisations in the market(Kumarand Yakhlef, 2016). Most public organisations always
need to be used maximum number of resources for easily running their all business operations in

the selected market segments. That’s why a public organisation always capable to generate
employment opportunity in the market.
Private Organisations:A private organisation’s scope is always less than a public organisation,
because most private organisations always able to run their business operations at the regional
and national level. A private organisation not be efficient as public organisation in the terms of
generating huge employment opportunities. Private organisations not sell their shares publicly,
so that no person can be able to buy share of a private organisation in the market. These
organisations no need to invest huge fund for implementing hi-fi technology in their daily
operations, because most public organisations can easily run their operations with ordinary
technology.
Voluntary Organisations: These organisations are also known as social organisations, in which
these organisations not work for earning profit in the market, because they are just working
welfare. Thera are donation and charity some major source of raising fund to these organisations.
Most voluntary organisations are able to run their operations with ordinary technology.
Legal Structure
Top-level management of each organisation always responsible to follow all legal and
ethical considerations within its workplace. For example; there are employment law is a part of
legal structure, in which all organisations (public, private and voluntary) should always be
considered this law in their respective workplace. It is necessary to provide equal growth
opportunities to employees in the workplace(Alotaibi,2016). On the other side, there are contract
law is another important term of legal structure, so that existing management within each
organisation should be considered this law as well for removing different conflicts from the
workplace. The partnership act, agreement act and equality act etc. are also part of legal
structure, in which these also should be considered in all types of organisations.
P2. Size and scope of different type of organisation
Size and scope of different types of organisation can be projected in the following
manner.
Tesco Company

Tesco Company is among the leading retail sector organisation especially in United
Kingdom. Apart from the United Kingdom Company conducts its business operations in
Ireland, India, South Korea, Crezch Republic, Slovakia and Hungry. Company deals in
supermarket, hypermarket, super stores and conventional stores. The scope of business is well
diversified of Tesco Company as the organisation owns more than 6000 stores all across the
globe at all the different business locations. All these stores allow company to meet the needs of
different customers group.
Pound Land Company
Company has initiated its business operations in the year 1990. The organisation was
initiated due to partnership between Dave Dodd and Steven Smith. They invested the capital of
£50,000 at the initial level of business. The organisation is one of the top private sector retail
organisation part of the United Kingdom retail sector market. Company sale its products over
both the mediums online as well offline (Ali and et.al.,2020). Online retailing is the new
developments part of the retail sector. The recent sales figures denote that online retailing in
Unietd Kingdom is growing at the rate of 25% every year. The company is among the top private
sector retail organisation in UK as compare to other private companies the scale of company is
diversified. High scale of business allows company to entertain an effective market presence
which has also resulted into high brand value of company.
The National Trust
The National trust is non for profit making organisation. The organisation provide social
services in United kingdom. The organisation does not carry an objective of earning profitability
out of the functional activities. The aim of the National Trust is to conserve all heritage sites in
United Kingdom. Organisation is associated with huge scale of operations as it is associated with
3 million peoples all across the globe. Organisation is operated at a global level which carries the
huge scope and potential of the organisation. The organisation works to conserve the heritage
sites and locations at a global level. The scale of the operation of the trust is diversified in nature.
The truest is not associated with any profit generating operations. As compare to other
trust operate in United Kingdom the trust operate at a global level. The trust works on a global
basis which project about high level of work of the trust worldwide.

LO2
P3. Relationship between different organisation functions
Tesco Company’s organisation hierarchy is associated with different functional activities
which allow company to manage its functions in the most appropriate manner.
Sales department: Sales department is among the most crucial functional department part of the
organisation hierarchy of Tesco Company. Sales department involves in selling products
company offers to its consumers. Sales are among the primary functional activity Tesco
Company is engaged with. Profitability of the company totally depends how effective the
department conduct its functional duties. These functions associated with the objectives of the
company heavily as all objectives of the company totally depends how well this functional
department conducts its operations. All objectives of company immensely depends upon the
operation perform by sales department in company (Mbewe, 2019). Other functional activities of
the company like operations, marketing, public relation and other functional activities is also
involve in getting the sales target done of company by contributing in different manners. Sales
directly entertain business objectives of company it can project as the main functional
department part of company. It can be stated in case of profit making organisation sales is the
only functional department directly concerned with profit generation in the company. It becomes
essential this department work with full efficiencies.
Operation department: Operation department is also a key functional department part of the
Tesco Company. The department is engaged in channelizing operations like logistics,
management of supply chain and other key functions of company. It can project that operation
department ensure proper availability of all products in stores of the company (Hillary, 2017).
All functional activity of the company is interconnected with each other. Operation department
ensure proper availability of trendy and fashionable products that can be easily saleable in the
stores of Tesco Company. By ensuring the proper availability the products which are needed by
customers ion market operation department play a huge role in achieving all business objectives
on behalf of the company.
Human resource department: Human resource department in engaged in ensuring proper
availability of skilled human resources for different functional activity in company. Human

resource department engaged in managing and controlling the different needs of the employee’s
part of the organisation. Human resources allow company to achieve the high level of work
efficiency by ensuring proper training and development related resources in organisation.
Department engaged in availing human resources at different designated positions in the
organisation. On the basis of the needs of the different designated position department allocated
suitable resources which ensure the ebst level of work efficiencies at all level of operations
(Michael, Reisinger and Hayes, 2019). By allocating suitable resources to employees they are
capable to enhance the capabilities which highly impacted to the company achieving its the best
level of customers satisfaction. Customer satisfaction allows company to enhance the
profitability of company. This also allows company to improve its brand value. The brand value
and customer satisfaction allows company to achieve its overall business objectives. It enhances
the profitability of the company by entertaining effective sales turnover. Profitability is among
the primary and main business objectives of Tesco Company.
Marketing department: Marketing department involve in channelizing different marketing
campaign of company. The department play role in enhancing the brand value of company in
market. Marketing functions allows company top attract customers in the market. Sales
department of Tesco Company take support from marketing department in order to achieve its
objectives of business. This functional activity allows company to gain effective growth
opportunities in the market and also to improve the sales potential of company by channelizing
different marketing campaign (Remišová and Lašáková, 2020). Marketing department supports
other department like sales department in channelling the promotional campaigns related to
products of company so that sales department of company can achieve all its objectives.
Marketing functions play immense role in enhancing the brand value of company which can be
converted into effective sales turnover of company has targeted for the year. This also resulted
into customer trust in products offer by company. Customer loyalty allows company to achieve
all its objectives behind the operations.
Finance department: Finance department play role in ensuring proper funds to different
functional department part of the company. Finds provided by finance department allow
company to channelize different functional activities like marketing and promotion, sales and

other key functional activities. Finance department also conduct the strategies alliances with
other competitors to enhance the growth of company in market.
The above mentioned functional department are interrelated to each other in order to
achieve all objectives.
LO3
P4. Positive and negative impacts of micro environment
Micro environment is the business environment in which company operate its business
operations. It put the following positive and negative impacts over the business of company. To
assess the impacts of macro environment put over the business of company PESTEL Analysis
will be used.
PESTEL Analysis
PESTEL Analysis comprises with all aspects of the external business environments.
PESTEL analysis tool evaluate the following factors that can be summarized in the following
ways.
Political Factor: Political factor is considered as all policies and strategies government in
United Kingdom and other places of business government body framed to entertain growth for
the retail sector. Policies frame by government put a direct impact over the business of company.
Taxation policy of government directly impact over the prices of different retail products. Retail
sector comprises with basic living products related to human being. The huge demand of sector
also brings special interest of people government towards the sector.
Economical Factor: Economical factor is also among the crucial external business environment
factor impacted the business operations of companies in retail market. Economic factor involve
economic stability, currency exchange rate and other economic aspects that impact over the
decision making of business organizations (Reeves, Levin and Ueda, 2016). Inflation in
economy is also among the key business environment factor put an impact over the operations of
company. Inflation rate in economy directly increases the prices of products. Currency exchange
rate also impact over the products prices which company exports at other business locations. It

can be demonstrated that external business environment factor put a direct impact over the sales
and profitability of the Tesco Company.
Social Factor: Social factor is also considered as the crucial business environment factor
influences the decision making process of Tesco Company. Social factor comprises with culture,
tradition, religion, mentality, attitude and other social aspects attached with the customers
decision making process. Company launches different products based on the fashion and trends
part of the different social factor. Especially in case of clothing line offer by Tesco Company
fashion and trend put a direct impact over the sales of company.
Technological Factor: Technological factor is also a crucial external business environment
factor put an impact over decision making process of corporate organisations. Technological
factor involve different technological development. Technological factor guides company about
all technological up gradation society has been part off. Technological advancement has changed
the dimensions in which company can entertain business (Bashir and Verma, 2017). For example
technological advancement has guided companies like Tesco to bring technology ion sales,
marketing, public relation, and solving issues of customers and in other operations. All this
aspects of technological factors allowed company to channelize effective brand value of
company in market. This has also enhanced the sales capacity of company as company could
sales its products over internet.
Environmental Factor: Environment factor is also among the crucial business environment
factor put an impact over the business of company. Environment factor involve different
corporate social responsibility company needs to engage with as per the regulations issued by
government (Chekh and Vinnyk, 2017). Tesco Company has been a part of different social
responsibility like clean water, plantation and other social causes which has allowed company to
channelize an effective brand image for achieving all business objectives. It has allowed
company to improve its brand value at international retail market.
Legal Factor: Legal factor is also a crucial external business environment factor. Legal factor
involve all laws and legislations associated with retail market and corporate sector. All
legislation framed by government involved in this factor. Different laws like equality act, anti

discrimination act and other acts. All these acts accompany needs to follow in order to conduct
the business operations.
LO4
P5 Internal and External Analysis
SWOT Analysis is a tool used to conduct the internal Analysis of the company. This
involve different strengths, weaknesses, threat and opportunities company is a part of.
SWOT Analysis of Tesco
Strengths: Tesco Company has a well diversified products portfolio which has been among the
key strength of the company. Brand value of company is also a key strength of Tesco Company
which has allowed company to achieve all its business objectives. Tesco Company has a
business policy to offer quality products at a very affordable price structure.
Weaknesses: Company is still a part of many traditional business tactics as a part of business
operations. Company is also associated with old fashioned and non trendy products which have
also impacted over the business of company (Trang and Nam, 2020). Marketing campaigns of
company is also mostly based on the old fashioned ideas that do not allow company to achieve
the best level of sales in market.
Opportunities: The company carry an immense opportunity to entertain growth by expanding
the business in new business locations. Company can also focus over selling products online via
online retailing to expand the profitability. Company carry the huge growth opportunity by
product expansion strategies.
Threats: Competition is a huge threat for the Tesco Company. As the huge demand and
profitability of the sector company face competition from both online and offline mediums.
P6 Strengths and Weaknesses Interrelate with External Macro Factors
All the strength and weakness of company are interrelated to the external macro factors.
There are social factors comes under external factors of company that allows company to sale
fashionable and trendy products that can meet different needs of customers. This has allowed
company to gain huge profitability by selling quality retail products to the people. Company is

also associated with huge resources which allows company to entertain different corporate social
responsibility top channelizes positive brand value of company. Corporate social responsibility
allows company to establish a loyal customers for selling different products of company.
On the other side, Tesco mainly focuses on producing products and services for low
income group of people. In the present case, company needs to sale some product by focusing
over high income group’s people. Normal retail products like food, groceries can easily afford by
any customer group due to its affordable prices but company can also focus over premium
customers group to enhance its profitability (Barac and et.al., 2016). In this case, if company
sales premium range of product for high income groups, then it can easily achieve huge profit in
the market. Currently the management is still using traditional business tactics in their business
environment; it is another weakness of this company. Company can give focus to online
retailing. Company can upgrade its information technology system to sale the products over
internet. This is the new place of market. Online retailing has been proved as the new era of
business environment.
CONCLUSION
On the basis of report’s findings, it can be concluded that there are generally many types
of organisations exists in each market segment with different purpose, size and scope, in which
each organisation responsible to follow the full legal structure. This report also has discussed the
role effective relationship between all organisational functions. Basically, top-level management
within each organisation should always maintain an effective relationship between its all
department for achieving its decided goals and targets on time. There are a factor which has
exists within Tesco’s macro and micro business environment highly affects company’s daily
operations. In this situation, the management of Tesco should innovate some appropriate
strategies for effectively dealing with impact of these factors.

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