A Comprehensive Report on Tesco's Internal and External Environments

This report provides an analysis of Tesco's internal and external environments, examining the various factors that impact its operations and profitability. The external factors discussed include technological, economic, political, demographic, social, competitive, global, ethical, and natural influences. Internal factors are evaluated through a SWOT analysis, highlighting Tesco's strengths, weaknesses, opportunities, and threats. The report also explores how Tesco's operations impact the external environment, focusing on social, economic, and environmental considerations. It concludes that both internal and external environments significantly affect Tesco's business, emphasizing the importance of understanding these dynamics for strategic decision-making and sustainable business practices. Desklib provides access to similar reports and study resources for students.

BMP3002

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Effect of external and internal factors on Tesco..........................................................................3
Describing ways in which Tesco can impact the external environment......................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Internal environment is termed as the set of forces that affects the working of the
organization internally. External environment are the factors that externally affect the
profitability and functionality of the business. The report will be based on the internal and
external environment of Tesco. Tesco is a leading supermarket chain in the united kingdom.
Also, the impact of the organization on external environment will be discussed.
MAIN BODY
Effect of external and internal factors on Tesco
The external factors that have impact on the organization of Tesco can be described by following
points: Technological factors – Advancement in the technology brings many changes in Tesco.
There has been wide use of new technologies to sell goods like billing machines are
installed in the stores for quick billings. Economic factors – Economy plays a vital role in impacting the business of Tesco. Tesco
can focus on lowering the prices to increase the sales. This would attract new as well as
existing customers and will help to increase the customer base of the company. Political and legal factors – Change in the policies and inconsistent nature of politics
affect the operations of Tesco. Other political and legal factors include the taxation,
tariffs, import restrictions etc. There is greater impact of political and legal factors on the
day to day operations of the business (Rosnizam and et.al., 2020). Demographic factors – It is important for Tesco to divide the customers
demographically. This division can be on the basis of gender, age , race, occupation, level
of education etc. each group of customer has to be served well to achieve success. Social factors – Tesco focus on the interest of the society by taking care of the socio-
economic status and social factors while developing their products. Catering the needs
and expectations of different groups of people can contribute to business growth. Competitive factors – Competitive factors constitutes the external factors that impacts the
working of Tesco. The company has to focus on the working of their rival firms by
evaluating the challenges and the success. Also, they can collect information on changes
in the products and various product developments (Kim and et.al. 2021).

 Global factors – Global factors can impact when the business is running internationally.
Different customer needs and preferences are there in different markets. It is important to
fulfil the needs of the people where the business is running internationally. Ethical factors – It is the ethical duty of the manager to maintain moral behaviour with
the employees and maintain their personal lives with the professional lives. The
employees should not feel that their perceptions and lives beyond the profession are
being exploited.
 Natural factors – Natural factors like protecting the environment by their operations.
Tesco should focus on working in the way that does not affect the environment and
should practice environment friendly activities.
The internal factors that have impact on Tesco can be described in the following points: Strength – Tesco is the biggest retailer in the united kingdom as Its share in the market is
large. The company has wide diversified on the basis of geography and the no. of markets
are growing immensely. Online shopping option is a major strength of the business for
growth (Awadari and et.al. 2019). The company uses superior technology to run the
business like advancement in its M-commerce facility such as mobile banking app. Weaknesses – Tesco started its operations internationally in the markets of US and Japan
where it failed its operations. Another weakness can be the frauds in the accounts of the
business which was a result from the misinterpretation of profits. Low-cost strategy of
the business has impacted the overall profitability of the company as its total operating
profit reduced. Many foreign countries in which Tesco runs its business are exploiting the
migrant workers. Opportunities – Introduction of jacks and expanding jacks, a new discount store have
created many new opportunities for the business. It collaborated with other brands which
allowed it to offer more products and attract new customers. Online banking system has
created fast and cashless stores for easy payment of bills. Opportunities like one hour
delivery to deliver the products instantly acts as opportunity for the company.
 Threats – When Tesco launched the Christmas ad, it suffered a backlash as customers
believed that it hurt the sentiments of the Christians. Brexit has been a major reason as a
threat to the operations of Tesco because of the trade deals and cost matters. Costs are

rising for dong the business and this has created a threat for the company as it has to incur
huge costs to run their operations.
Describing ways in which Tesco can impact the external environment
There are certain ways in which the operations of Tesco can impact the external environment of
the business. The external factors constitute the social, environmental and economic factors. The
company works in a way that directly impact the business operations and further affect the
overall profitability. Some factors are discussed as under: Social factors – It is the duty of the business to fulfil the basic needs of the employees.
Tesco runs its operations in a way that cater to the needs of its customers and increase the
customer base. The social obligation is fulfilled by the company and this attracts the new
as well as existing customers. There are certain groups of people specially children and
women who are focused much because of this factor (Soegoto, 2021). Economic factors – Rise in the prices of the products of Tesco has reduced the spending
power of the people. Tesco practised it because of the rise in the operational cost which
resulted in increase in the prices of the products to be offered to the customers.
 Environmental factors – It is the moral duty of the business to take care of the ethical
factors that negatively impact the business as a whole. Tesco can acquire practices which
involves eco-friendly method of selling the products like less use of plastic that cannot
be recycled.

CONCLUSION
It has been concluded from the above report that internal and external environment
affects the operations of the business. The report highlighted that there are various external and
internal factors that influence the working of TESCO. It can be summarized that working and
operations of TESCO greatly impact the external environment of the business.

REFERENCES
Kim and et.al. 2021. The Sustainable Success and Growth of Social Ventures: Their Internal and
External Factors. Sustainability, 13(9), p.5005.
Rosnizam and et.al., 2020. Market opportunities and challenges: A case study of Tesco. Journal
of the Community Development in Asia (JCDA), 3(2), pp.18-27.
Awadari and et.al. 2019. Employee participation in organizational change: A case of Tesco
PLC. International Journal of Financial, Accounting, and Management, 1(2), pp.91-99.
Soegoto, F.A., 2021. Product Development using SWOT Analysis. International Journal of
Entrepreneurship & Technopreneur (INJETECH), 1, pp.1-10.

8