Analyzing Tesco's Global Business Environment and Strategy

This report provides a comprehensive analysis of Tesco's global business environment. It begins by defining globalization and its impact on organizational structure, culture, and leadership, specifically within Tesco's operations. The report then evaluates the influences of ethical and sustainable globalization on organizational functions, highlighting trade opportunities, international productivity, and investment. A force field analysis is used to assess driving and resisting forces impacting decision-making. Furthermore, the report examines effective decision-making in a global context, focusing on market selection and entry strategies, and pricing. It identifies key barriers to international business, such as language and cultural differences, and legal complexities, offering recommendations to overcome these challenges. The report concludes by exploring various routes to internationalization, including licensing, exporting, and joint ventures, while also discussing associated barriers. This report offers valuable insights into the complexities of operating in the global business environment, using Tesco as a case study to illustrate key concepts and challenges.

Global Business Environment
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Table of Contents
INTRODUCTION ..........................................................................................................................3
LO3..................................................................................................................................................3
P3 Analyzing the impact of globalization on structure, culture and functions of organizational
governance and leadership...........................................................................................................3
P4 Evaluating influences on organizational functions of ethical and sustainable globalization. 4
M3 Force field analysis for evaluating the driving and resisting forces with its influences on
decision-making...........................................................................................................................5
LO4..................................................................................................................................................5
P5 Evaluate the different ways decision making can work effectively in global context...........5
M4 key barriers in doing business internationally and make recommendations.........................6
P6 Determine and articulate the various routes to internationalization an organization may
adopt, including key barriers........................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Globalisation defined as geographic distribution of service and industrial activities across
national boarder and cultures (Katsos and AlKafaji, 2019). Therefore, this defines as tendency of
business, technological advancement and people spread throughout the world. Global business
environment can be define as an Internationalization. In simple terms, globalisation defined as
economic activities hat influenced by various factors.
Present study is based on global business environment and relates with activities of Tesco
related to business. It is the British global grocery retailers that provide services of different
types of product such as retailing of books, clothing, electronics, internet services, etc. Thus,
assessment will cove the various aspects of international market such as influence of
globalization on leadership and governance structure, culture and functions. Moreover, report
will describe the globalization in ethical and sustainable with decision making power at
international level. Lastly, report will explain the various mode of entering into
internationalization and associated barriers.
LO3
P3 Analysing the impact of globalization on structure, culture and functions of organizational
governance and leadership
Globalization business environment influence the decision making power of business. It
leads to enhance the competition in different ways. Therefore, rivalry at global context can be
related to product and service target market, technological adaptation, cost price, quick response
and quick production by the companies (Gaganis, Pasiouras and Voulgari, 2019). The one of
the main significant aspect of globalization is to increase its market share. Thus, Tesco is
involved in importing and exporting their products and services in international market and this
international interactions of company's influence working of enterprise.
For example, international environment consist of trade laws which can effect Tesco's
ability for exporting their product within international markets. There are different tariff barriers
that influence the performance of Tesco like frequent change in taxes and tariff rates due to
promoting domestic products. Thus, Tesco sales the variety of products that affects tariff rates
for various categories of products and create uncertainty for Tesco to trade internationally.
To enter into international market, quoted enterprise must take initiatives to make
changes by seeing over to nature and culture of market. There are different environmental
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changes that has hugely impacted over the role of leader and manager such as To remain
competitive, increase revenue, production and services. With help of it, enterprise can able to
expand its service at the global level. Due to internationalization firm need to change their
structure and leadership styles as they hire the new person according to the culture and
environment and changes the work place. Organizational culture can be determined as a complex
set of ideologies, attitudes, opinions, norms of behavior, symbols and core values shared
throughout the organization, influencing the way in which organization meets its objectives that
aids to enterprise in maintaining employee's conduct in regulation and control (Lane, and
Maznevski, 2019). Thus, Tesco change the policies and culture by looking over dispersed culture
of countries as they change the rules and regulation and follow appropriate laws which suitable
for the international market.
P4 Evaluating influences on organizational functions of ethical and sustainable globalization
Globalization describes the growing economy as thorough enhancing the variety of cross
boarder transaction in product and services. It helps to increase the capital flows and also provide
the advance technology. Thus, the main advantages of globalization is helping to increase the
economy by making more economic product, increase competitors and distributing wealth more
equally. There are different sustainable advantages of globalization in the context of organization
which describe as follows -
Trade opportunities - Globalization provide the benefit to the Tesco as they gather new
opportunities for improving and exporting products and services in international market. Thus,
Tesco take this opportunity and sale their goods and service and make the new customers in
international market (Ibeh, Crick and Etemad, 2019). On the other side, Globalization helps to
increase the real wages by lowering the cost of consumption. Further, Tesco provide their
product and service on the affordable prices and it beneficial for the customer because they
easily purchase the expensive product
International productivity - Tesco has gathered number of advantages from the globalization of
their business, such as increased global productivity. They enable to gain production of their
products by over 120 percent by establishing new business in other countries such as china and
Indiana. This both countries have huge population so, the demand of new product will be
increased.
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Increase international investment - Globalization helps to developing countries they manage
the international monetary funds. Thus, Tesco can use this funds to establish their business in
the international market. It provides the benefit to the Tesco as they exchange the currency and
loans. Thus, it has allows to business as they establish their business and make effective trade in
the foreign market.
Thus, globalization provide the different sustainable advantages to the Tesco as they
easily share their technology across in whole world. It helps to increase the productivity and
generate huge revenue also helps to attract the large number of customer in the worldwide.
M3 Force field analysis for evaluating the driving and resisting forces with its influences on
decision-making
Fore field analysis helps to Tesco as they use this analysis thy take advantages of a force
field analysis is that it supply a optical summary of all the different element encouraging and
opposing a specific idea, with gathering all the information which respect a potential decision
compact into a single graph (Underdal and Hanf, 2019). Thus, Tesco used this analysis in order
to establish their business in global market.
LO4
LO4
P5.
In order to succeed in international business, Tesco needs of decision making abilities.
Thus, this decision are applied in the various situation like maintain the relationship with
customer, government, employees and NGO.
Market Selection Decision - In this decision making process Tesco has decided to enter in the
international market. The next stage of selection the market and target the market and customers.
According to the Tesco product category firm present a product mix, production capacity, and
proposed expansion strategy, it selects one or more countries to operate in. Thus, Tesco use the
different strategies to target the customer like they use the STP strategy it has to decide on type
of foreign buyers to be served (Underdal and Hanf, 2019. Market segmentation and target
market is the main process of decision making. Thus, Tesco target the market on the basis of
needs and wants. Selection are two basic issues in the decision. Initially, a firm targets the most
attractive and comparatively easy international markets. Global commercialism investigation
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canhelp a Tesco to study global consumer behaviour, segment international market, and select a
few most profitable markets.
Market Entry Decision - In this decision making process firstly, firm has decided the market
when they establish their business. A firm has chosen global markets to operate in. Now, the next
instant marketing decision is market entry, i.e., which strategy is suitable and which mode is
chosen for enter the market; which of the options to be used for foreign market entry. There are
several options to choose an appropriate entry strategy like licensing, join venture, exporting etc.
Pricing decision - In this decision making process. Tesco need to describe the process of
products according to the different taxes and tariff rate. Thus, Tesco needs to apply the best
pricing strategy that increase the demand of product in international market.
M4
There are different types of barrier which described as follows -
Language Barriers and cultural differences – good communication is one of the best strategy
of effectively doing business in foreign market. However, the communication across different
culture is changeable for the Tesco (Holmberg, J. 2019). Thus, to improve the communication
with their colleagues, clients, and customers firm need to think and make the effective deals. Thus,
to reduce the barriers Tesco research and evaluate that how to conduct a business in international
market. Therefore, to overcome this barrier firm need to willing to invest significant time and
energy in order to pursue an overseas venture.
Dealing With Multinational Laws - One of the biggest barriers is the differences in doing
business outside and the difference in foreign laws (Holmberg, J. 2019). For example, contract
law is different in many countries in many places, and many business are not clearly take
contracts as seriously. Thus, there are different laws that affects the business import such as and
employer benefits laws, export laws, hiring and firing laws and many other laws the govern data
security, marketing and advertising, and many other issues. In order to overcome this issue Tesco
needs to execute legal counsel that can guide manager through the issue.
P6
There are various routes of entry into an international market. It is channel by use of an
entity can enter into international market. There are different types of modes of
internationalization which described as follows -Licensing – In this method, Many companies
expand their business in international market they sign the contract with foreign business that is
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called licensees. Thus, this process is allows to foreign company to sales their product and
service in international market. The main benefit of licensing is that it reduces the cost of
business in internation market.
The main barrier of licensing is that when Tesco not able to manage their quality
management it damaging brand or product reputation.
Exporting – This mode of entering is the easiest way. In this method, firm export their product
in different country. Thus, Exporting is the method that sales the goods and service within
international market. The main benefit of using this is to avoid expenditure of establishing
operations in the new country. (Brenton 2019)
The main barrier of the using this mode is that legal and political issues which arise the
administrative expenses of Tesco. Thus, also firm not be able to respond to customer
communications as quickly as a local agent.
Joint venture – This is the another method of enter in new market. In this two companies come
together and make a partnership contract by combined their resources to sell their product and
services. In other words, it is a type of temporary partnership, set up for the definite purpose. For
example, In May 2014 Tesco successfully made a contract with the state-run China Resources
Enterprise (CRE) to make a joint venture, combining Tesco's 131 stores in the country with
CRE's nearly 3000 outlets.
The main barrier of join venture is the cross culture nature and different ownership
context which may affect the performance and decision making power of company.
CONCLUSION
From the above project report it can be summarised that international business
environment is the multidimensional that includes the cultural differences, language barriers
political risks, exchange risks, legal & taxation issues etc.
The present study has based on international business environment of Tesco. The report
has described the impact of globalization that helps to identify the needs of changes in decision
making, leadership and structure, governance, Culture and functions.
Furthermore, assignment has explained the mode of entry in the beguines that help to
business for making the best decision and enter in new market. Lastly, report has elaborated the
advantages of globalization that helps to business by generating profits.
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REFERENCES
Books and journals
Brenton, T. 2019.The greening of Machiavelli: the evolution of international environmental
politics. Routledge.
Holmberg, J. ed. 2019.Policies for a small planet: from the international institute for
environment and development(Vol. 4). Routledge.
Underdal, A. and Hanf, K. 2019.International environmental agreements and domestic politics:
the case of acid rain. Routledge.
Ibeh, K., Crick, D. and Etemad, H. 2019. International marketing knowledge and international
entrepreneurship in the contemporary multi speed global economy. International
Marketing Review. 36(1).pp.2-5.
Gaganis, C., Pasiouras, F. and Voulgari, F. 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling. 78. pp.275-292.
Lane, H.W. and Maznevski, M.L. 2019. International management behavior: Global and
sustainable leadership. Cambridge University Press.
Katsos, J.E. and AlKafaji, Y. 2019. Business in war zones: how companies promote peace in
Iraq. Journal of Business Ethics. 155(1). pp.41-56.
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