Impact of Global Factors on TESCO's International Business Operations

This report provides a detailed analysis of TESCO's international business operations, examining the various factors that impact its global presence. It begins with an introduction to international business and its relevance to TESCO, followed by an overview of the international business environment in which TESCO operates, including cultural differences, political risks, and economic factors. The report then explores the mechanisms that regulate international trade, such as the World Trade Organization (WTO), and how these mechanisms affect TESCO's operations. Furthermore, the report investigates the impact of cultural and environmental factors on TESCO's international business, highlighting the importance of understanding local markets. It also analyzes the influence of the financial environment, including currency fluctuations and financial markets, on TESCO's global strategy. The report identifies the reasons behind TESCO's international expansion and details the business strategies the company employs to succeed in the global market, such as market research and flexible organizational structures. Finally, the report concludes by summarizing the key findings and emphasizing the importance of adapting to the international business environment for continued success. The report uses various sources, including books, journals, and online resources, to support its analysis.

INTERNATIONAL
ASPECTS OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
International business environment in which TESCO operates..................................................1
Mechanisms regulate international trade.....................................................................................2
Culture and Environment of other nation impact business operating internationally.................2
Financial environment impact businesses that operate worldwide..............................................3
Reason for operating internationally............................................................................................3
Business strategies used by TESCO operating globally..............................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
International business define trade of services, capital, goods, technology and knowledge
across national boundaries and at transactional or global level. Foreign investment policy,
business presence in UK, regulatory environment and tax environment is included in
international aspects which affect business the most (Shenkar, Luo and Chi, 2014). The present
reports is based on TESCO working as in international market where they garb many
opportunities and face risks based on international business environment. It explains Global
business environment in company operates and also justifies mechanisms that regulate
worldwide trade. This study define culture and environment of other country impact business
operating globally. It clarifies financial environment influence businesses that run business
internationally and also explains why businesses managed business worldwide. Furthermore, it
justifies strategies of business used by company running ventures into international market.
MAIN BODY
International business environment in which TESCO operates
TESCO is the British international groceries and general merchandise retailer, its
headquarters is located in Welwyn Garden city, England, Hertfordshire and UK. Company have
their own shops and operate its business in seven countries across Europe and Asia. Dundee is an
international market where TESCO is operating more than 57 shops.
International business environment is multidimensional involving cultural differences,
taxation issues, political risks, legal and exchange risks (Hamilton and Webster, 2018). Dundee
is Scotland's fourth biggest city and fifty-first most populous build up area in UK. In this city
there are many business competitors has already existed as it included in international business
environment. As they have the power to change company operations structure and process of
producing goods and services. Existing competitors impact TESCO operational efficiency and
also affect their profitability and productivity.
Due to some climate changes organization face many challenges within supply
procedure in Dundee that is quite risky for them as operating business successfully.
Flexible retirement is one of the best Dundee government policy, in which companies
have to pay qualified members pension according to pension scheme that is much beneficial and
effective way to assure employees about organizations concern regarding them. Pension program
gives opportunity to pension advantages from age 55 onwards. It gives flexibility in context age
1

at which staff member get phased retirement in lead up to full retirement. Thus, TESCO has to
adopt this international business environment or political factor that might be affect its overall
business operations.
Mechanisms regulate international trade
International trade define procedure of exchanging services and products between one
nation to other country. It offers rise to world economy in which supply, prices or demand
impact and are affected by international events. In short its is exchange to services, capital and
goods across global territories or borders (Wagner, 2014). In most nations, such trade represent
important share of GDP (Gross Domestic Product). Better risk management, access to export
financing, increased revenues or profits, decreased competition and easier cash flow
management are the benefits of international trade that help any business for example TESCO
the most. The entire international trade procedure has been held under monitoring by higher
authorities in which there are some companies included who have the responsibility to monitor
overall international business trade process.
WTO (World Trade Organization) is the intergovernmental company that is focusing
with regulation of global trade between nations. WTO interdict discrimination between trading
partners, but gives exception for national security, environmental protection and other essential
goals. Non discrimination, binding and enforceable commitments, safety valves, reciprocity and
transparency are the five basic principles or rules in WTO which rules all over global trading
program.
Culture and Environment of other nation impact business operating internationally
Every country have different business environment, economic culture, beliefs and values
that impact new business operating international. Political instability and flexibility, customers
preferences, law, government policies and rules affect any business and its operational efficiency
the most (Young and Thyil, 2014). Most businesses is affected by external environments as
much as they impacted by its competitors. TESCO is operating their business globally as they
face many challenges in it which is might be appropriate or not for their company. In new market
place there are many risks associated with opportunities that impact organization profitability
and other things. Economy belief and norms is also different in each nations which make
difficulties for company as they operate in new market. Changes in clients preference impact
2

firm operating internationally as well as affect its market reputation and financial budgets the
most.
Culture impact business- On the other than Social factors also influence TESCO as they
operate its business in international market. Culture profoundly impacts how people think,
behave and communicate, organization entered into new market place at global level in which
their venture can be impact due to society and communities belief where they adopt their
services and product or not. Culture within every nation is quite different and unique from other
country, people follow it and set in their mind when they purchase things.
Financial environment impact businesses that operate worldwide
Financial environment is portion of the economy with major players being investors,
organizations and markets (Cohen and Kietzmann, 2014). Essentially, this part represent big
section of well developed economy as organisations who retain private aspects have capability to
grow business and capital. Global financial environment is totally unique from domestic
financial environment that impact TESCO. International financial management is subordinate to
various external forces like currency convertibility, foreign exchange market, international
monitory program, global financial markets and balance of payments. All above factors is
considered in economic factor that impact businesses and its operation operating worlwide.
Financial market is the market in which organization and people trade financial
derivatives and securities at low transaction prices. Securities involve bonds, shares, precious
metals and capitals. Stock market, commodities market, derivatives market and bond market are
the various types of financial markets. Sudden changes in these above market directly impact on
any businesses or organizations who operate in international marketplace. Positive impact -
Higher stock ranking is quite beneficial for businesses as it impact on their profitability and
increase revenue more than before. Negative impact- low ranking in stock and bond market
brings many difficulties for companies as they invest money in it, they face many issues in their
financial budgets.
Reason for operating internationally
Organizations operating there business in international market because they want to
expand or grow their business and operations. For example, TESCO operate their business in
many countries for increasing profit and generating income more than before. As they want to
grab the attention of customer and try to attract the new ones which is quite beneficial for them
3

(Möhlmann, 2015). Grab investment opportunities, reducing costs, generating more revenue,
minimizing productivity and competing for new sales is the main reasons that define why
companies or businesses operating their ventures into another country. Organizations drive
towards international market because they want to increase its profit margin as well as financial
budgets which is possible only when they supply or deliver good quality products and services.
International business expansion procedure give many opportunities to companies which is quite
beneficial for them and help to build its positive image in international marketplace. Expanding
overseas is very beneficial for businesses like TESCO, it helps to gain competitive benefits and
diversifying assets. Expanding into international or foreign markets is now in trends which
provide many benefits and advantages to company to enhance its revenue growth. Thus, if global
expansion procedure is successful, businesses will be able to offset any financial or other losses
in domestic market.
Business strategies used by TESCO operating globally
Business strategies is defined as the collection or combination of all decision taken and
activity performed by organizations to accomplish business objectives, goals and to protect
competitive position in marketplace (Serra and Kunc, 2015). Business strategies is the back
support or it can be said backbone of any business like TESCO which leads towards desired
goals and work as road maps that is much beneficial for business. Business strategies is used to
increase profit and improve companies position in marketplace better than its competitors.
TESCO operate in Dundee where they can face issues due to customer preference.
Sudden changes in clients preference make challenging situations which directly impact on
company growth. Thus, they make business strategies to overcome within this condition.
Conducting Market research is the best strategy, company need to conduct market
research before entering into new international market defines as the best Business strategy of
TESCO that helps a lot.
Organization makes flexible structure within its business as they operate internationally
because it helps to make some changes according to international business environment.
CONCLUSION
From above its has been summarized that TESCO is operating their business in many
countries in which international business environment affect its business operational efficiency
the most. World Trade Organization international trade regulation is effective and best, it
4

helps to monitoring overall process of international trade. People culture, political stability or
instability, technology and other environmental factors of other country impact TESCO
international operations. Stock and bond market changes impact businesses and bring some
challenges and opportunities for them. Furthermore, businesses operate into international market
to increase profit, generate revenue and other things effectively. It has been concluded that
marketing research and flexible organizational structure is the best business strategies used by
TESCO to operate their business internationally.
5

REFERENCES
Books and Journals
Cavusgil, S. T. and et.al., 2014. International business. Pearson Australia.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing
economy. Organization & Environment. 27(3). pp.279-296.
Deasy, S. and et.al., 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9. 247. 042.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Möhlmann, M., 2015. Collaborative consumption: determinants of satisfaction and the likelihood
of using a sharing economy option again. Journal of Consumer Behaviour. 14(3).
pp.193-207.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Serra, C.E.M. and Kunc, M., 2015. Benefits realisation management and its influence on project
success and on the execution of business strategies. International Journal of Project
Management. 33(1). pp.53-66.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Wagner, M., 2014. Regulatory Space in International Trade Law and International Investment
Law. U. Pa. J. Int'l L.. 36. p.1.
Young, S. and Thyil, V., 2014. Corporate social responsibility and corporate governance: Role
of context in international settings. Journal of Business Ethics. 122(1). pp.1-24.
Online
FOUR CRITICAL ASPECTS OF INTERNATIONAL BUSINESS. 2017. [Online]. Available
through: <https://welearnindia.wordpress.com/2014/10/16/four-critical-aspects-of-
international-business/>
Regulation of International Trade. 2018. [Online]. Available through:
<https://saylordotorg.github.io/text_fundamentals-of-global-strategy/s13-02-regulation-
of-international-tr.html>.
6