Business in Practice 1: TESCO's Business Environment Analysis

This report provides a comprehensive analysis of TESCO, a major international supermarket chain based in the UK. The report begins with an introduction to TESCO's business operations and its aim to improve its financial position. The main body of the report includes a SWOT analysis, evaluating the company's strengths (e.g., strong brand recognition, technological advancements), weaknesses (e.g., profit margin pressures), opportunities (e.g., strategic alliances, online shopping), and threats (e.g., economic recessions, rising food prices). A PESTEL analysis is then conducted to examine the external environmental factors influencing TESCO, including political, economic, social, technological, environmental, and legal factors. The report further discusses how TESCO impacts its external context, covering political, economic, social, technological, ecological, and legal variables. The conclusion summarizes the key findings and highlights the importance of both internal and external environmental analyses for TESCO's strategic planning and future success.

Business in practice
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SWOT ANALYSIS.....................................................................................................................3
PESTEL Analysis........................................................................................................................5
How the company impact its context External Environment......................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
There are various associations which conduct their business which are of different size at
market place. Their main purpose of organisation is to improve financial position of the
company. In present time, it has been analysed that various types of organisation focuses on
performing their business in particular sector in order to achieve favourable outcome. In this
report, the organisation is taken named as TESCO. It is considered as an international chain of
Supermarket which is located in UK. They offer different variety of goods and services to its
user in order to satisfy them. In this assignment, it also provides discussion regarding internal or
external factor which imposes direct impact on the company. In addition to this, there are various
business organisations that operate their business in particular field for achieving favourable
outcome in future period of time (Allen and Truman, 2016).
MAIN BODY
SWOT ANALYSIS
The SWOT analysis is used for examining of internal and external environment of
organisation which has direct impact on operations and activity of organisation. The strengths,
weaknesses opportunities, as well as threat of company which is going to be discussed ad
follows-
Strengths
 The strength of TESCO is to access number of rewards for providing better services to its
customer during particular phase of time period.
 TESCO is determined as a biggest organisation that operates their business in retail sector
that assists in achieving competitive advantage over rivalries within a market.
 Further, they focus is on increasing the adoption of latest technology with aim to provide
cost-effective product to its customers that is considered as a main strength or advantages
for company.
Weaknesses
 Due to subsidiary of Tesco do not conduct their business in an appropriate way it
imposes direct effect on profit of organisation in future interval of time.
 Due to increase in competitive pressure, it decreases the profit margin of Tesco during
particular phase of time period.
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 Due to decrease in income level of individual, they do not spend their money in
purchasing luxurious products and services to its customer that decreases the income
level of Tesco.
Opportunities
 There are various opportunities which are available for Tesco such as strategic alliance
that provide more attractive product to its customer in market.
 There is an important opportunity to boost online shopping that help in providing home
delivery services to its user.
 They also focus on offering western goods to its customers according the demand of end
users that help in increasing profit margin in an interval.
Threats
 The economic recessions and credit crunches are considered as a main threat of
organisation and it reduces purchasing power of customer during particular phase time
period.
 Due to increase in food prices across the world, it decreases the income level of Tesco.
 Labour is considered as the main issue which is faced by Tesco because due to increase
in wage rate across the world it adds additional costs to company (Johnson and Garvin,
2017).
On the basis of above mentioned analysis, it has been identified that SWOT analysis is
adopted for identifying internal and external environment of organisation which have direct
impact on operations and activity of organisation. The strengths, weaknesses opportunities,
as well as threat of company are necessary to consider for smooth running of organisation.
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PESTEL Analysis
PESTEL Analysis is being adopted for understanding external environmental factor
which enforces direct influences on activity & functions of Tesco that is going to be discussed
below:
Political factor there are various factors like tax rate, legislation, political stability and
many more which enforces direct influence on performance level of Tesco. Because of political
stability, the company do not change their policies that impose positive impact on a firm. On
other hand, due to change in the government regulation, it is necessary for company to adopt the
changes that it is difficult for company to change it frequently that impose negative impact on
company (Küpers, 2016).
Economic factors include taxation, unemployment, deflation and many more. Due to
decrease in the income level of an individual person, the customer does not spend their money on
luxurious item that reduces sales of company. On the other hand, the organisation offers superior
quality products to its customer according to their needs that increases profit margin of company
in future period of time.
Social factors it involves trends, fashion, population and many more which enforces
direct influence on functions of company. The organisation focuses on offering goods depending
upon demand of end users that increases success and growth of company in future period of
time. It also helps in achieving goal in stipulated period of time. On the other hand, due to
frequently change in the taste of customer; it is not easy for firm to satisfy their needs that
decreases profit margin in future period of time.
Technological factor it is essential to implement advanced technology for providing
innovative services to its user. Therefore, the Tesco focuses on investing their money on energy
efficiency project that helps them in achieving long term objective by decreasing carbon
footprint that positively affects the company. Whereas, due to adoption of advanced technology,
it adds additional costs to the company.
Environmental factor due to increase in environmental issue, Tesco focuses on
reducing or decreasing carbon footprint by 50% in 2020 that minimise wastage in an appropriate
manner. The organisation offers environmental friendly products and services to its customer
that increases goodwill or reputation in front of customer at marketplace. Apart from this, the
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company manufactures products that increase level of pollution which negatively affects
activities and operations of company.
Legal factors include laws, legislation, rules and many more. Therefore, the organisation
follows laws in order to perform their activities in an appropriate manner. Due to changing in
laws frequently, it is not possible for firm to follow all legislation that negatively affects
company.
From above given factors, it has been analysed that PESTEL analysis is a framework
which helps company is considering external environment factor that enforces direct influence
on the organisation (Mian, Lamine and Fayolle, 2016).
On the basis of above mentioned topic, it has been analysed that SWOT and PESTEL
analysis is necessary to consider for organisation in order to smooth running of their business in
an appropriate manner. Therefore, it helps in adopting different practices in such a manner that
increases growth of company in future period of time.
How the company impact its context External Environment
There are various external factors which enforces direct impact on business organisation
that is given below:
Political variable there are various work laws, charge approaches strategy which are
needed in different countries. Every component helps company to analyse government affects
their level of efficiency. It is important for organisation to analyse their current trends and future
situation in reference of advertisement arrangement that influences business organisation.
Financial component economic variables impose direct impact on profit of business
organisation. It involves trade rate, extra cash, loan costs and many more. It is significant to
separate this entire variable that help in achieving goal in timely manner by expanding benefits
or revenue.
Social factor there are various social factor that helps the organisation in analysing
customer needs or wants. It is significant for organisation to analyse perspective, age
appropriation and many more in order to satisfy the customer (Norbury, 2019).
Mechanical component it is significant for business organisation to generate product
superior approaches for circulating merchandise for expanding gain in future period of time.
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Ecological variable There are various government elements that increase efficiency level
of organisation. It is significant for company to follow the government policies that increases
brand image of company at market place.
Lawful components legal element which includes laws, security laws as well as data
related to customer is collected by government in order to put rules within business organisation.
There are various external factors which must be considered by business organisation for smooth
running of organisation. It also helps in achieving goal as well as objectives in future period of
time. In addition to this, it enhances success and growth in future period of time (Vom Brocke
and Mendling, 2018).
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CONCLUSION
After analysis of mentioned report it has been concluded that there are various business
organisation that operate their business in particular field for achieving favourable outcome in
future period of time. There are various internal or external factors which imposes direct impact
on the organisation that is clearly explained in this report. Then, there are various associations
which conduct their business which are of different size at market place. Their main purpose of
organisation is to improve financial position of the company. In present time, it has been
analysed that various types of organisation focuses on performing their business in particular
sector in order to achieve favourable outcome.
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REFERENCES
Books and Journals
Allen, S. and Truman, C., 2016. Women in business: Perspectives on women entrepreneurs.
Routledge.
Johnson, J.E. and Garvin, W.S., 2017. Advanced practice nurses: Developing a business plan for
an independent ambulatory clinical practice. Nursing Economics, 35(3), p.126.
Küpers, W., 2016. A handbook of practical wisdom: Leadership, organization and integral
business practice. Routledge.
Mian, S., Lamine, W. and Fayolle, A., 2016. Technology Business Incubation: An overview of
the state of knowledge. Technovation, 50, pp.1-12.
Norbury, P. ed., 2019. Business In Japan: a Guide To Japanese Business Practice And
Procedure--Fully Revised Edition. Routledge.
Vom Brocke, J. and Mendling, J., 2018. Business process management cases. Digital innovation
and business transformation in practice.
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