Tesco's Business Environment: Impact of Macro Factors & SWOT Analysis

This report provides a comprehensive analysis of Tesco's business environment, focusing on the impact of macro factors and internal strengths and weaknesses. It employs PESTLE analysis to evaluate political, economic, social, technological, environmental, and legal factors affecting Tesco's operations, highlighting both positive and negative influences. Additionally, a SWOT analysis identifies Tesco's key strengths, weaknesses, opportunities, and threats, providing insights into its competitive positioning and strategic challenges. The report also explores the interrelation between Tesco's internal strengths and weaknesses with external macro factors, demonstrating how these elements collectively shape the company's performance and strategic decision-making. The study concludes with a summary of findings and references to relevant academic sources. Desklib provides access to this and other solved assignments to aid students in their studies.

Business and
business
environment

Table of Contents
 INTRODUCTION
 LO3
 P4 Positive and negative impact of macro environment on business
operations.
 LO4
 P.5 Internal and external analysis of organization and identify strength
and weakness.
 P 6. Strengths and weaknesses interrelate with external macro
factors. 6
 Conclusion
 REFERENCES

INTRODUCTION
Business environment is a combination of internal and
external factors that affect to business performance
and its profit. Tesco is a largest grocery multinational
organization in UK. It founded in 1919 by jack Cohen.
This presentation will be covers positive and negative
affect of macro factors and SWOT analysis of
organization. It also includes interrelation between
macro factors and strength and weakness.

P4 Positive and negative impact of macro
environment on business operations.
Macro environment of organization includes external factors that
affect to organization’s performance and it is uncontrollable as
well as it also influences the organisation functions and
operations in both positive and negative manner. Tesco use
pestle analysis tool for evaluate and analyse external factors.
 Political :- this factor includes taxation, tariff and legislations
etc and Tesco majorly affected from this factor because the
operations of Tesco is at global level and it has to follow rules
and regulation of different countries by which the operation
and functions are influenced. For example :- if government put
restrictions on trade, that results unlimited trade with other
countries.

 Economic :- it includes labour cost, inflation rates and
exchange rate. Both rates are very useful in import and export
so if these rates change frequently so these affect to business.
For example :- if the rate of inflation increase it will reduces
the economic growth reduce by which the profitability of firm
will affected. Negative :- if labour cost increases, Tesco has
to pay more cost to labour and if it not pays so labour turnover
increase. Inflation and exchange rate increase so it reduces
export and import. Positive :- labour get right wages through
labour cost and Tesco control import and export with
increasing rates of exchange and inflation.

 Social :- this factor includes choice, needs, fashion and trend
in society of different country that means day by day these
things frequently changing in society and organization also
has to change their products and services according to
demand of customers. For example:- population increasing so
demand also increasing and organization has to segment and
produce products according to age, health and choice. These
things affect to business operations. Negative :- frequently
changing in products and services so it consume more cost
and research also conduct by organization frequently. Positive
:- organization earn more profit through provide products and
services to customers after understand their needs and wants.
It easily earn more profit.

 Technological :- technology increasing day by day and Tesco
has to adopt and establish advance technology. It does
business at global level so it adopts technology and innovation
according to other organization of different countries. For
example organization, research to market at global level and
evaluate and analyse about new innovation and technology.
Negative :- it consumes more cost to install new technology
and innovation because technologies changing frequently.
Positive :- advance technology helps to improve business
functions and operations and increase profit and productivity.

 Environmental :- this factor includes corporate social
responsibilities and CSR is compulsory for all organization.
Tesco also has to follow CSR for sustainable development of
environment and welfare among society. Negative :-
organization can not use to natural resources unlimited
because of scarcity. Further, excessive responsibilities also
creates pressure on the company. Positive :- investors invest
more money if organization follow CSR because this strategy
does care about society and environment. Society also get
products and services according to choice and needs.

P.5 Internal and external analysis of
organization and identify strength and
weakness.
Strength and weakness of organization includes in internal
environment and Tesco use SWOT analysis tool for evaluate and
analyse factors that direct affect to performance of organization.
Strength :-
 Tesco is the largest grocery retailer and its sales and revenue
is high compare than other similar organization.
 Market share is also very high that means maximum sale does
by this organization out of total sale of grocery product in UK.
 Technology and innovations establishment and adoption is a
strength because it produce products through latest
technology and improve its business.

 Tesco follow corporate social responsibility and this
strategy is strength for organization because
investors invest more money and society attract
from organization.
 Laws like discrimination and health and safety law
applicable in Tesco and employees attract. Tesco
does business at global level so this is a major
strength of it. These things improve business and
profitability.

Weakness :-
 Inflation rate increasing so it make Tesco's weakness because
due to inflation it can not does proper and systematic import
and export.
 Its weakness that it reduce their business due to increase tax
rates and it affect business of Tesco.
 Tesco do not invest more money on research and development
program so this weakness affect to profit and sale because
research helps to evaluate market conditions and competition.
 Liability is very highly affect to Tesco because credit card
liability and high debts raise due to financial errors and its
affected to profit of organization.

Opportunity :-
 Tesco has opportunity to expand their business in other
countries because its brand image is very strong.
 It has opportunity to increase and upgrade online services and
home delivery services.
 Political stability of UK is well opportunity for Tesco because if
tax rate, rules and tariffs stable and not change frequently so
organization can easily increase their business.