Impact of Stakeholders and External Factors: Tesco Business Report

This report provides a comprehensive analysis of Tesco's business operations, focusing on the impact of various stakeholders, including government, suppliers, customers, employees, media, and investors, on the company's decision-making and overall performance. It delves into the interaction between the primary, secondary, and tertiary sectors within the UK economy and how Tesco operates within this framework. Furthermore, the report identifies and assesses the impact of key external factors, such as political, technological, and environmental influences, on Tesco's business strategies and outcomes. The report concludes by summarizing the findings and emphasizing the importance of stakeholder management and adapting to external environmental changes for sustained business success. The report also references key business terms like budget and discusses the importance of external factors on the UK business sector.

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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 Key business terms................................................................................................................1
1.2 Stakeholder and their impact on business operations...........................................................1
TASK 2............................................................................................................................................2
2.1 Interaction between different business sector of UK economy............................................2
2.3 impacts of the selected external factors on the UK business firms......................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment is constantly changing due to various factors. Tesco is a leading
company in retail sector of UK market (Botha, Kourie. and Snyman, 2014). They are also
running their operation in several other nation. This report will discuss about various the impact
of stakeholders on the business operation of an organisation. Explanation of primary, secondary
and tertiary sector will also become part of this report. The affect of three external factors on the
enterprise will be included in this file.
TASK 1
1.1 Key business terms
Business is an organisation or economic system which perform commercial activities like
exchange of goods and services against money. Budget is consider as the key term of this topic.
It is a plan where all the expected income and expenditure is written.
1.2 Stakeholder and their impact on business operations
Stakeholders are the people who have either direct or indirect connection with the
company. They have ability to change the crucial decision which is taken by top level
management of a firm. Below are some key stakeholders:
Government – They make policies relating to business. Recently government of UK
made a rule that they will decrease the amount of subsidiary which they were given to the
farmer. This means that the farmer will reduce the quality of raw material, it will make a
negative impact on the premium quality of goods which company is offering to their customers
in the retail stores.
Supplier – They provide products or unprocessed good to an enterprise, if they refuse to
supply their commodities to an organisation then their whole business operations will get derail
(Lawrence. and Weber, 2014). But at the same time, if the number of suppliers increases then it
will make a positive impact on the business activities of the firm. They can buy more goods at
less price, if their will have more choice.
Customers – They are considered as one of the most important stakeholders. Companies
like Tesco sell products to them in order to earn money. If they are not happy with an enterprise
then they cannot survive in the market for long period of time.
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Employees – They key element of a company. They are responsible for making and
executing various strategies in order to attaining organisational goal. If they do not perform their
task in effective manner or they have any problem with management of the firm then it will
make a negative impact on the operation of the corporation.
Media – The importance of this stakeholders has increase in last 2-3 decades. They help a
company in promoting their products but at the same time one can make the responsible for
spreading rumour amount an organisation which can taint image of an enterprise. They play
significant role in building brand image of Tesco.
Investors – They invest money in a corporation so a firm can performance their business
operations in an effective manner. If they take out their investment from the organisation then
they may face serious issue relating to finance. If investor invest more money in a company the
enterprise can expand their business in short period of time.
TASK 2
2.1 Interaction between different business sector of UK economy
Their are basically three types of business sector, private, secondary and tertiary. They
work in a chain and deliver finished goods to the customers.
Primary – This sector deals with acquisition of raw material. Extraction of coal, wood,
iron etc. are some of the examples of this section. Suppliers of Tesco by raw material from the
farmers so they can manufacture a product in upcoming time (Weiss, 2014). Normally the people
who work in this sector are not well qualified but they have some special skills which is
generally missing in the secondary sector. Coal miners, farmers, hunters are some of the
examples of people of lie in this section.
Secondary – All the work relating to manufacturing and process of a an item is done in
this sector. Tesco assembles some of their products so they can offer it to the public at their retail
stores. If primary production is of poor quality then it secondary cannot produce better
commodities. Craftsman, workers in factory are some of the examples of people who are
working in this sector.
Tertiary – This sector is very different from other two, its main connection is with
commercial service like transportation and advertising. Tertiary is highly dependent on the other
two sector. Generally people with high qualification and special skill work in this sector. This
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was at the lowest level before a century ago but now it is considered as the most important sector
among the three. Primary and secondary are also dependant on this sector because without them,
they cannot work properly. Tesco has a accounts division where accountants provide their
services so company can run their business operation in an effective manner.
2.2Identify two or three external factors facing the UK business sector
Some of the major factors are here which can impact on the organisations:
Political factors- Tesco is one of the largest supermarket chain in UK. Thus, it gets
affected with external factors most easily. Laws and legislations sanctioned by European Union,
UK government, and world trade organisation are major external factors. UK government has
passed laws related to removing wastages and sewerage from streets (Mina, Bascavusoglu-
Moreau. and Hughes, 2014). Tesco has reduced its costs related to operations and opened
branches in different localities. In UK number of trade unions exists that can affect its way of
business. Tesco does not approves hiring employees who are registered with such unions as they
have various rights that may not be according to policies of company. Brexit affects each retailer
involved in FMCG. Its principles related to free movement of services, goods, and people
affects short term, long term and medium term movement of goods, services and people of
Tesco. It is also important to follow aspects of import duty and it is considering it and importing
products from China and other Asian nations.
Technological factors- It is important for supply chain management of Tesco. It is
needed to adopt technological advancement to achieve competitive advantages (External
environment theory. 2017). Mobile technology helped retailers as customers can choose their
preferred wine through mobile. Technology improves standards of performance and increases
customer value and loyalty towards company. It helps in improving operational efficiency of the
company.
Environmental factors- Our environment is facing severe problems these days. Carbon
emission, global warming and ozone layer depletion are some major issues. Such issues are
resulting in increased focus on environmental sustainability. Tesco is adopting various measures
to protect the environment as it has taken steps for reducing consumption of energy and utilising
greenhouse gases. They are adjusting their stores by considering environmental factors. In
Thailand, this organisation has invested around 3.1 million on approx 49 stores to save energy of
around 2 million.
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2.3 impacts of the selected external factors on the UK business firms
Impacts are mentioned in the below points:
Political factors-
Positive impact- Political factors may be favourable for business operations. It may
provide relaxations by implementing policies related with exchange rates and export/ import
duties. These factors also provides subsidiary to various sectors related with FMCG products.
Thus, it helps in easy and smooth flow of business.
Negative impacts- Sometime, such factors includes imposing restrictions on flow of
goods and services. Therefore, such strict rules restricts the easy flow of operations in an
organisation.
Technological factors-
Positive impact- Technology plays vital role in performance of any company. It helps the
organisation in achieving competitive advantages. It also helps in building brand value and
increasing customer loyalty (Radebaugh, 2014). Adopting advanced technology is an opportunity
for every company. It also plays an crucial role in raising performance standards. It helps a firm
in becoming a market leader and increase its productivity and financial gains.
Negative impact- If an organisation does not adopts new technologies then it may affect
the performance standards and loses customer value. It also affects its market share ratio.
Company may not be able to achieve competitive advantages and competitors will take benefits
from it.
Environmental factors-
Positive impact- If an organisation is committed towards environmental sustainability
then it will increase its brand image and helps in building customer loyalty. Considering such
factors while business will give various benefits to Tesco in short and long run. It will facilitate
in survival and growth. Government will also cooperate with such organisation which is involved
in saving the environment from serious issues related with climate change.
Negative impact- It may affect business because environmental issues will result in
unavailability of renewable resources. It may decrease workplace efficiency as it arises severe
health related issues (Armstrong. and Taylor, 2014). Not adopting laws related with environment
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sustainability will negatively affect company's image. It will also affect rain which results in less
output from farming and it makes unavailability of raw material to produce FMCG products.
CONCLUSION
On the basis of the above presented report it can be concluded that stakeholders are
having a huge impact on the business so it is essential to manage all stakeholders with analysis.
Internal and external factors are also having a huge impact on the organisations so they have to
make a regular analysis and make appropriate changes accordingly.
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REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education.
Mina, A., Bascavusoglu-Moreau, E. and Hughes, A., 2014. Open service innovation and the
firm's search for external knowledge. Research Policy. 43(5). pp.853-866.
Radebaugh, L.H., 2014. Environmental factors influencing the development of accounting
objectives, standards and practices in Peru. The international Journal of Accounting
Education and Research. Urbana. 11(1). pp.39-56.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Online
External environment theory. 2017. [Online.] Available Thorough.
<http://businesscasestudies.co.uk/business-theory/external-environment/government-
and-eu-influences-on-business-activity.html#axzz4UnJniMKC/> [Accessed on 6
November 2017]
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