Tesco's Business Environment: Macro Impacts and Internal Analysis

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations (public, private, and voluntary) and their respective sizes and scopes. It examines the interrelation of various organizational functions such as finance, marketing, operations, IT, and human resources, highlighting their link to organizational objectives and structure, using Tesco as a case study. Furthermore, the report analyzes the positive and negative impacts of the macro environment on business operations, conducting both internal and external analyses to identify strengths and weaknesses within Tesco. The study concludes by explaining how these strengths and weaknesses interrelate with external macro factors, offering a holistic view of Tesco's operational environment. Desklib provides this report as a valuable resource for students, offering access to past papers and solved assignments.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1) Elaborate differences between various types of organizations ............................................3
P2) Discuss the size as well as scope of different types of organizations...................................5
TASK 2............................................................................................................................................7
P3) Discuss how different organizational functions are interrelate with each other along with
their link to organizational objectives and structure...................................................................7
TASK 3............................................................................................................................................9
P4) Analyse the positive negative impacts of macro environment upon business operations....9
TASK 4..........................................................................................................................................10
P5 )Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................10
P6) Explain how strengths and weaknesses interrelate with external macro factors................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment refers to the internal as well as external environment that
significantly affect the overall performance and efficiency of an organisation. It comprises
various factors such as customers needs, suppliers, employees, government and many more that
influences and get affected with business functions (Akben, 2020). The report is about TESCO
that is multinational company and offer a range of groceries and general merchandise in
different countries. It is based on UK & owns various retail outlets globally. The report
comprise discussion regarding different type of organizations along with their scope, size and
legal structure. Further interrelation between different departments, internal analysis and external
analysis using effective tools of have been elaborated in report. At end, it comprises the positive
as well as negative impact of macro environment factors on organisation efficiency.
TASK1
P1) Elaborate differences between various types of organizations
Public Organization: It is a type of organization that is owned by government of a
country. Under this 51 % or more shares is he4ld by government whether state, federal and union
and city agencies. The main aim of these companies is to serve the people of a nation. It is not
operated to earn profit margins rather for the upliftment and well being of society. There are a lot
of public sector organizations has been undertake by the government of UK for societal. For
instance Ministry of Defence is a public sector entity within UK that takes care for the safety and
security of citizens of country. It is analysed that TESCO is highly affected with public
organizations that are operating in UK for the betterment and upliftment of people. In addition,
they are providing necessary goods and services at lower price so that people easily get attracted
towards the product and services offered by them. So, it is essential for managers of respective
company to prepare appropriate strategies in order to maintain higher level of profit and sales.
Private Organization: It refers to those companies who held by private owners for their
own benefit. Under this, more than 51 % shares are owned by general public. These are not
operated or regulated by government authorities ( Dan-Cohen, 2016). It may be formulated as a
sole proprietor, partnership firm, company and so on. It is undertake with the aim to earn high

profit margins. For illustration, TESCO, is a retail giant and multinational company based on UK
that offers a range of groceries and non-food products to customers. There are several other
private organizations such as Sainsbury, ASDA and more that are also working within retail
sector. So, it is vital for administration of TESCO to formulate effective plans in order to face
competition in better manner.
Voluntary Organization: The organization that has a different aim rather earning higher
profit margins for business owners are known as voluntary organizations. It is also termed as non
profit companies or NGO's, third sector and so on. The main purpose of theses entities is to
provide better services to society rather earn profits. It is held by people without any intervention
of government agencies. As these entities has autonomous status and they do not need to follow
the guidelines, rules, regulations of higher authorities of country. It may be undertake by
professionals who have enthusiasm to serve the society and nation. For instance British heart
foundation, is a charity organization of UK that has started with a vision to free the country
from the panic of heart related diseases. In context of TESCO, it is monitored that business of
organization is highly affected with the presence of these companies as they are providing goods
and services to customers at minimum possible price. So, managers are required to make
effective promotional as well as advertisement plans so that customers get attracted towards their
products and services.
Basis Public Private Voluntary
Meaning It is owned by state,
union government
agencies
Company held by
private owners is
known as private
entity.
It is an association that
voluntarily initiated
by some people to
create social impact.
Purpose Main aim of these
entities is societal well
being and upliftment
It is started to earn
higher profit margins
Whereas the objective
of these organizations
is to serve the society
and create a positive
impact.
Scope It has a wide scope to These entities are It includes a huge

serve the people and
nation for the overall
economic
development
initiated and comprises
high scope to earn
profit margins and
accelerate their
growth.
scope of charity,
donations and
voluntary work by
members for overall
development of
society.
Legal Structure It is controlled as well
as own by government
thus need to follow all
the compliances rules
and regulations
formulated by them .
Varied compliances
pertaining to tax,
members is applicable
on different private
organisations. It may
be a sole
proprietorship,
partnership or a
company.
Different legal
structure such as
unincorporated
association, trust and
company limited by
guarantee can opt by
these entities.
Stakeholders It has the stakeholders
such as vendors,
general public,
employees and so on.
There are various
parties who get
affected from business
profits like managers,
investors, workforce
and many more.
This entity has the
major stakeholders
such as customers,
society who are
directly affected with
their activities
Size Public organization are
generally large in size
as they are funded and
operated by
government.
It may be large such as
company or small like
sole proprietorship
based on the
investment of business
owners.
Voluntary
organizations are
generally not operated
at large level.
From above discussion, it is analysed that there are different types of organisation that
distinct from each other in various aspects such as purpose, structure, scope and many more. All
these entities put significant impact on the operations & profit margins of other companies.

TESCO, that is a retail giant and a private company is significantly affected by Public &
voluntary organizations. AS they work for societal well being and provide efficient goods as well
as services on relatively lower price. It affect the overall profit margin and sales of respective
business entity ( Denker and Laat, 2016).
P2) Discuss the size as well as scope of different types of organizations
There are different size as well as scope for growth and sustainability of different types of
organization. Size demonstrates the market share, profit share of a business entity whereas scope
comprise goals, objectives, areas for which it operates. The further information about this is
mentioned below:
Public Organizations
Scope: Public organizations are undertake by government for betterment and upliftment
of citizens of nation. It operates with the purpose of overall development of economy. These
entities helps in increasing standard of living of people, reduce down poverty, and inflate the
GDP of country. In addition it aims to render quality services such as better education, health
services to people in order to ensure welfare and protection of citizens within nation. There are
various a lot of public organizations in UK that affect overall business functions of TESCO by
offering product as well as services on least price.
Size: Government and higher authorities make necessary funding in Public entities that is
a reason that they are generally large by size. It has a lot internal departments such as finance,
operations and human resources, research & so on to handle the business activities in an efficient
manner (Fandel and Trockel, 2018). It owns high share at market place and affect the whole
country with its functions. There are ample of public departments within UK that are functioning
at large scale. It is analysed that business of TESCO is influenced with these companies as they
are funded by government. On another side TESCO is a public company that need to geneate
funds from markets with the help of goodwill of organization.
Private Organizations:
Scope:Private organizations are started with the main aim to earn higher profit margins
rather than to serve society. Whether sloe proprietorship, partnership and company the ultimate
goal to to earn high revenue and maximize profitability. It is initiated by business owner to
maximize market share in order to sustain at competitive market place for a longer period of

time. It plays a vital role in overall economic development also by providing job opportunities to
people. There are a lot of private organizations within UK such as Sainsbury, ASDA and so on.
TESCO has to face extensive competition from these firms and need to prepare strategies to
maintain its profit margin.
Size: Private organizations can de undertake in a number of ways. The size of entity,
numbers of owners will differ as per the type of business. Different types of private entities are
elaborated below:
 Sole Proprietor: It is owned by only an individual who initiate a business entity to earn
profit margin (Kiel, Arnold and Voigt, 2017).
 Partnership: It can also undertake by person who wish to start their own business. In
case of partnership there must be at least two individuals who will invest money and
entitle for the final profits.
 Company: Company is widely used to initiate a business at large level. There are
managing directors or investors who are the owners of company. There are a lot of initial
formalities need to fulfil before undertaking a company.
It is monitored that there are several private organizations within UK that are operating either in
form of sole proprietor or partnership or company. So, managers of TESCO need to analyse
current market position in an effective manner in order to formulate appropriate strategies for
betterment of company.
Voluntary Organisation:
Size: Voluntary Associations are initiated by local people, professionals for public
benefits not to earn profits (Griffith, 2016). It is generally started at small scale and do not own
huge investment. But now, non profit organizations are getting aid from government that will
help them enlarge business operations. There are various voluntary entities are functioning
within UK to create huge social impact as well as public benefits. In regards of TESCO, there is
requirement to analyse the market position of different companies in order to prepare suitable
strategies for growth of organization.
Scope: Theses companies work for the upliftment and betterment of society. It helps in
the overall development of citizens within a nation. It helps to provide better services,
opportunities to individuals to enhance their standard of living. These entities focus to provide
quality goods as well, as services to people on affordable price to promote social well-being. The

business activities and profit margin of TESCO is getting affected by non profit companies as
they are rendering products at least price.
TASK 2
P3) Discuss how different organizational functions are interrelate with each other along with
their link to organizational objectives and structure
There are different business functions such as finance, marketing operations, IT, human
resources that are essential to undertake in order to achieve predefined goals. In addition there is
association between different activities that help to escalate business efficiency and performance.
Different divisions of TESCO and their interrelations are discussed below:
Finance and Marketing: Finance department is vital for an organization. It is responsible
to procure funds from different sources such as equity, debt and so on and keep efficient control
over funds within company. Finance managers of TESCO manage cash inflow and outflow to
ensure potential profit margin for business entity (Vale, Branco and Ribeiro, 2016). In addition,
they also allocated requires funds to various activities to accomplish organisational objectives.
Whereas Marketing division undertake various activities to promote and advertise the products
and services of company. Marketers are responsible to inflate in sales & revenue by attracting
more new consumers. It is analysed that there is strong association between both departments. In
case of TESCO finance managers renders appropriate fund to marketing team in order to
promote the products. While marketing division help top enhance cash inflow within company
by increasing in sales and revenue. Thus, there are higher interrelation between both of the
divisions of organization.
Marketing and Human resources: HR mangers recruit, select suitable candidates for job
openings in company. They also responsible to arrange appropriate training programs to enhance
efficiency as well as performance of employees. In addition it is the duty of human resources
mangers to keep workforce motivated in order to retain them for a longer period of time.
Marketing mangers of TESCO advertise vacant positions of company and ensure to get huge
number of applications from candidates (Vantrappen and Wirtz, 2018). While human resources
divisions appoint qualified and suitable employee to join marketing department of organization.
Therefore, there is requirement of strong association in both of the divisions to sustain at
competitive market place. It helps to increase in overall business efficiency and performance. In

case of TESCO, it is monitored that there is interrelation in marketing and human resources
department that is essential to accelerate organisational growth and success.
Human resources and IT department: IT division is an essential part of an organization
as it undertakes various advancements, unique approaches to performance a task in an efficient
manner. As per current trend, it is vital for each and every organization to evolve new and unique
techniques in order to get competitive edge. IT team of TESCO are carry out extensive research
in order to evolve new approaches such as online shopping, automation, cashless store and so on.
It will help them to attract more number of buyers and to increase in sales of company. Whereas
human resources division of TESCO recruit, select potential candidate for respective department.
In addition they also arrange necessary trinai8nprogramns in order to bring advance skills,
capabilities in employees. IT personnels evolves effective technologies to aid HR mangers and to
ease their work. They develop such an efficient software that automatically rejected the
applications of non qualified candidates thus save time of HR personnels. Hence, there is
interrelation between both of the departments of organization that is crucial to enlarge business
operations and achieve predefined objectives.
From above discussion, it is analysed that there are strong association between various
departments of company. It helps managers to achieve business goals by enhancing efficiency of
employees as well as organization.
Organizational structure of TESCO
Organizational structure refers to the hierarchical arrangements of several positions within
company. It helps to determine different roles and responsibilities of different individuals in
organization so that they can perform assigned task with better coordination and collaboration to
attain predefined goals and objectives. There are several organizational structure such as
hierarchical, flat, matrix and more are adopted by organizations to perform several business task
effectively. In context of TESCO, it is monitored that hierarchical structure is followed by
managers in which proper command are provided by top level managers to subordinates so that
predefined objectives can be achieve. It is analysed that this structure is really helpful to
facilitate proper communication among different people of company in order to minimize
conflicts and ambiguity at work place.

Hierarchical structure, 2020
Therefore, a proper structure is followed by managers of TESCO so that necessary messages,
informational can easily transmit between different persons working at different levels of
organizational structure. It will help to attain predefined objective in stipulate period of time.
TASK 3
P4) Analyse the positive negative impacts of macro environment upon business operations
It refers to the study of external factors that influences business operations in an efficient
manner. These elements are related to macro environment and beyond the control of mangers.
This frameworks assist to prepare appropriate strategies in order to minimize the impact of
macro environmental factors. TESCO is a UK based retail giant and highly affected with
external elements. PESTLE analysis of organisation is discussed below:
Political Factors: TESCO operates its business at global level thus it is affected with
political insatiability in different countries. Brexit may bring change in current policies that will
put significant impact on overall business performance of company. In addition US- china trade
war is also an influencing factor for company. Further due to change in current political party
policies also get change that affect the profit margins of organization.

Economic Factor: It comprise various factors such as inflation, economic condition of
countries,income, cost and other factors. In case of TESCO, it is highly affected with prevailing
economic condition of global rescission (Wang and Shen, 2016). It has reduce down the sales of
company. As the company majorly operating business within UK thus manger need to keep an
eye on existing situation of country. Brexit has reduce down the purchasing power of people in
UK that also put an adverse impact on overall sales and profitability of organization.
Social Factors: TESCO has started to offer non food items such as clothes along with
food products as per the requirement of current market trend. They offer products as per the
need, requirement of different culture as company operates business in various countries. It also
offers organic products according to the prevailing market condition.
Technological Factor: It refers to evolve new and advance technologies to meet with
current requirement. TESCO believes to adopt innovative approaches to get competitive edge. It
provides facility of online shopping to its customers (Worline and Dutton, 2017). As per current
report 43% of companies are executing online shopping. In addition, they are working on
providing cash less billing to facilitate hassle free billing.
Legal Factor: These elements are vital to taken into consideration while formulating
business strategy. TESCO has expanded its operating in various countries thus affected with
various laws of different countries. Food retailing commission has imposed some rules that need
to be follow by all companies of retail industry. In addition it has allegations of gender
discrimination and unequal pay to employees. These all factors may harm the present brand
value of organization at market place.
Environmental Factors: These factors put a great influence on overall performance and
brand image of organization. TESCO believes to protect environment thus it is using the practice
of reuse and recycle. Company make sure to minimize the use of non -recyclable plastic to
protect and save environment.
Out of above discussion, it is analysed that there macro factors put a great influence on
business operations and profitability of TESCO. It may be positive or negative as it help[s to
accelerate business growth but on the another side also put negatively affect the organizational
activities.

TASK 4
P5 )Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.
Strength - is one of the largest grocery store in the world and it is providing its products
and services to different part of the world. High captured market is the strength of TESCO
company as it helps in earning more revenues. It has effective and strong suppliers network assist
TESCO organisation to timely provide its products and services to customers. This firm is
offering its products by determining need and want of customers and it support in enhancing
customer satisfaction. This helps company is reducing cost as well as developing strong
relationship with customers (Ratten, 2020). TESCO organisation has high market share and it
has gain trust from customers by providing high quality products and services.
Weakness – There are some weakness of TESCO company which impact on business
operations and influence its productivity and performance. It is essential for respective company
to analyse and evaluate its weakness in order to improve its successfully. TESCO company
failure in US and Japan Market is its major weakness. Due to this weakness, respective company
has faced various issues and losses. This organisation is performing business activities on low
cost techniques. This has influence its revenues and profitability of TESCO. Low cost strategy of
TESCO company for offering its products and this cost strategy negatively affect business in
terms of profits.
Opportunities – There are number of opportunities available in market area for TESCO
company that will lead to growth and development of business. TESCO company has
opportunity for providing its products and services in new market area. There are various
countries in which TESCO can introduce its offerings. This will help in influencing more
customers towards business as well as increase marker share. TESCO company can expand
Jack's store in to different market area to increase its market share (Ren and Jackson, 2020). This
organisation has opportunity to use new and advance technology that will help in enhancing
business practices. Innovative technology is significant for increase business process effective
and efficiently. TESCO organisation needs to develop and implement creative marketing
strategy. This will assist in providing information to customers about the offering of TESCO

company. This company needs to upgrade mobile application in order to provide more ease to
customers. It will assist in attracting customer and increasing customer satisfaction.
Threat – There are various threat in external business environment which will includes
business and impact on its activities. Respective company is providing products and services in
highly competitive environment which lead to affect decision and strategies of TESCO company.
High competition in market area is the major threat for TESCO organisation and it influence
over the functioning and performance of business. Effective and strong strategies of rival
company reduces the chance of gaining competitive advantage over other rival companies. Rules
and legislation of government is one of the major threat for respective company. Changes in
political and government regulation will impact strategies and functioning of business. This
threat impact on performance and profitability of respective company (Martiniatin and Ghina,
2020). National economic crises is another major threat which influence over performance of
company and affect its decision.
P6) Explain how strengths and weaknesses interrelate with external macro factors
External macro factors of business includes various factor such as political, economical,
social and technological. These factor will impact over organisation and influences decision to
successfully and effectively conduct business task. It is essential for TESCO company to analyse
and evaluate the strength and weakness of external macro factors in order to successfully
enhance organisational practices and improve overall performance of business (Steenkamp and
et.al., 2020). Strength and weakness of macro factor in context of TESCO company is mention
below -
Political factor – This factor includes different rules and policies that is set by government that
will provide guidance to organisation for performing business practices. Strength - Strength of TESCO company is that it is following all rules and polices that is
developed by UK government. This is significant for smoothly conducting business
practices and enhance its performance with in market area. Weakness - Weakness of TESCO company is that it is difficult for organisation to make
chances in business as per different rules or regulation of different countries. It is
essential for company to successfully implement business activities and task as per the
developed policies and regulation of government. This will positively impact business
and enhance organisational practices.

Economical factor – It consist of different elements that is related to economic system,
GDP rates, inflation rates, exchange rates, employability rates and many other factors. It is
essential for organisation to consider economical factor as it will impact on performance and
revenues of business. Strength - TESCO company strength is that it is generate high revenues by providing its
products and services to large market area. UK national economic system is very strong
and it support TESCO company to successfully provide it offering and earn revenues. Weakness - Its weakness is that national economy is fluctuating and it directly affect
performance and profitability of TESCO (Chibba, 2020). Manager of respective company
will have to change its decision and strategies as per the changes in national economic
system.
Social factor – There are different social factors in business environment such as
customer needs, perception, values and various other factor. These factor will impact on decision
making of business and affect capability of organisation to effectively conduct business
practices. Strength - Respective organisation is developing and creating products or services by
determining the needs of customers. This strength of TESCO organisation positively
affect business practices as well as influence market share. This strength assist respective
company to take attract more customer and increase customer satisfaction level. Weakness - Customers need and wants are changing with time and it will directly impact
over the capability and potential of business. It is very time consuming for TESCO
company to determine customers need and change business activities accordingly.
Technological factor – This factor is related to technology and techniques which are consider by
organisation in order to successfully and effectively conduct business practices. Strength and
weakness of TESCO company will impact over macro factor. Strength - TESCO company is consider new and innovative technology while conducting
business practices. This is strength for respective organisation as it assist in successfully
and effectively conducing business practices as well as enhancing organisation
performance. Technology of TESCO company helps in effective and efficient
performance in order to attain set goals.

 Weakness - Advance and innovative technology is very costly to business. TESCO
company budget will be affected in order to purchase new and updated technology.
Respective company will have train employees in order to make sure that they use new
technology significantly. This is time consuming process and affect business activities.
CONCLUSION
From the above report it can be concluded that there are various factors of business
environment which impact on functioning and performance of business. It is essential for
organisation to analyse and evaluate business environment in order to determine different factors
and their impact on firm. There are different business types which is performing its function
with different purpose and sector that includes public, private and voluntary sector. Different
type of business have different size and scope which impact on its functioning. It has been
analysed that organisational functions needs to have strong relationship between them and should
be linked with objective and structure of business. Macro environment of business consist of

different factors which will have positive and negative impact on business operations. It is
crucial for organisation to analyse its strength and weakness as it support in better decision
making. By determining weakness, organisation is able to develop better strategies that assist in
overcoming weakness as well as successfully enhance business practices. Apart form this it is
important for company to determine the strength and weakness which are related to external
macro factors.
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