Macro Environmental Influence on Tesco: A Business Report

This report provides an in-depth analysis of Tesco's business environment, focusing on macro environmental influences. It begins with an introduction to business environments and the structure of the report, outlining the scope of the analysis. Task 1 explores various types of organizations, differentiating between profit, non-profit, and non-government organizations, using Tesco, the British Red Cross, and Redress as examples. It also compares micro, medium, and small enterprises. Task 2 critically analyzes various business functions, such as marketing, HR, sales, and customer service, highlighting their interdependencies and impact on organizational goals. The report examines the organizational structure of Tesco and how business functions are integrated. Task 3 examines the PESTEL model, assessing the political, economic, social, technological, environmental, and legal factors affecting Tesco's business functions. Finally, Task 4 evaluates internal and external factors influencing the company's profitability, including a SWOT analysis, concluding with a synthesis of the findings.

Macro Environmental
Influence

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Explain the various types of organisation in order to different aims and purpose...............3
P2)Comparison between micro, medium and small enterprises.................................................5
TASK 2............................................................................................................................................7
P3)Critically analyse the various business function in order to achieving organisational
achieving organisation goal and objective..................................................................................7
TASK 3............................................................................................................................................9
P4) Examine the PESTEL model in order to improving business functions. ............................9
TASK 4..........................................................................................................................................11
P5) Evaluate the internal and external factor which affect the profitability of company. .......11
P6) Critically evaluate strength and weaknesses which interrelated with external factors. ....13
CONCLUSION.............................................................................................................................14
REFERNCES.................................................................................................................................15

INTRODUCTION
Business environment is essential concept which includes various tools and techniques in
order to smoothly operates the business functions and activity. The report is about Tesco which
situated in UK and they dealing various segment such as grocery items, food and clothing. The
paper consists about comparison of different kinds of business organisation the basis of size and
scope, analysed business function which are interlinked as well as PESTEL analysed and SWOT
(Austin, 2016). It involves analysed the TWOS matrix and porter's five forces model which help
to evaluate the internal factor.
TASK 1
P1) Explain the various types of organisation in order to different aims and purpose.
Profit organisation-: These kind of organisation refers to those which organisation
mainly established to earning profit and they providing best services to customers. It involves
different types of organisation which considered as restaurant, insurance company, retail and
estate organisation and many more. All these kind of organisation main purpose to earning
profitability which helps to increasing productivity and performance of company. There are
ample numbers of organisation such as corporations, partnership and sole proprietorships.
Tesco-: It is supermarket chain in United Kingdom and considered as public limited
company and they establishing to earning profit and capturing huge market share. It is famous
super market which helps to achieving organisational goal and objective of company. It helps to
enhancing the standard of living.
Tesco stakeholders-: It is majorly targeting large number of customer base and involves
both internal and external stakeholders. They are various kinds of stakeholders such as
employees, suppliers, business partners, society, community and shareholders.
Non-profit organisation-: These organisation refers to those which main aims to
providing social services to society. There are ample numbers of organisation which participant
in events on that basis raise funds and generated profitability (Golden, 2016).
British red-cross-: These kind of organisation which serves to society and work for
community in order to their employees are homeworker and dedicated towards the work. It
majorly work for those individuals those has faces crisis and humanities in UK. These
organisation founded by 1870 by royal charter in UK.

British red-cross stakeholders-: There are ample numbers of stakes holders such as
customers, local government, public groups, national organisation and commissioners.
Non- government organisation-: These kind of organisation refer to those which are not
registered and affiliated by government or considering as providing social services to
community. It majorly work for various issues such as human right, empower women, save
children and many more (Hoogendoorn, 2016).
Redress-: These is non- government organisation in UK which mainly works for human
rights in order to obtain justice, repartition, compensation, rehabilitation and many others. They
promotes human right on that basis provide justice for individual.
Redress stakeholders-: They are not establish to making money or generated profit but
they only work for donation basis. It includes various stakeholders such as partners, suppliers,
donors, healthcare, private sectors and academic institution.
Differentiae between the various organisation on the basis of size and scope.
Basis Profit organisation Non-profit
organisation
Non government
organisationa
Size It is one of the leading
supermarket in UK on
that basis currently
working 4,50,000
employees in an
organisation.
In these organisation
they are working with
32500 as volunteers
and 3500 total
numbers of
employees.
These organisation
work for repartitions
for future survivors
and they presently
working 12 members
of workforce with 4
volunteers.
Legal structure It considered as public
limited company.
These company come
as public organisation.
It is charitable
organisation.
Objectives These providing best
service to customers
and enhancing
standard of living.
They majorly work for
society and not aim to
earning profitability
but rise funds through
events and other
activities (Ittner,
These serves to
community in order to
working for beneficial
of society and human
rights.

2018).
Funding It includes financial
institution, investors.
It involves various
schemes, events and
programmes helps to
raise fund.
They are various
financial sources such
as trust, government
funding, partners and
charities.
P2)Comparison between micro, medium and small enterprises.
Basis Micro businesses Medium businesses Small businesses
Definition Micro businesses
refers to those
organisation which are
targeting small
customer base and
operate their business
with limited numbers
of employees (Jiang,
2019).
These organisation
which lies in between
the small and large
company. It scope is
greater than from
micro small business.
These kind of
organisation working
with small numbers of
employees and start
their operation with
limited amount of
capital required.
Numbers employees It considered as less
than 10 numbers of
employees.
They are operate
business activity with
less than 250
employees
It involves operation
stared within small
areas and less than 50
employees.
Turnover These organisation
turnover up to 2
million.
It includes turnover up
to 50 million
It includes only small
amount of capital
required which
turnover up to 10
million.
Examples There are ample
numbers of example
It majorly includes
those companies such
Hotels, privately
owned shops and

such as Ice-creams
shop, cafeteria and
street food shops.
as contract basis. many others
(Kennedy, 2016).
It includes different kinds of business models and differentiate on the basis of features.
Types of business model Features
Sole proprietorships Sole proprietorships refers to those which are
operated by single owner in order operates
business function solely. It considered as there
are no legal restrictions and agreements and
earning profit and they have no contract
between share profits (Kuscu, 2019).
Partnership These kind of business refers to those which
include agreement between two partner which
known as partnership deed and they sharing
profit and losses on the basis of contract
between partners.
Public limited company Public limited company refers to those which
operates business function single and
independently. It involves mangers and owners
are two responsible person who investing
capital amount on that basis they invite general
public in order to buying shares.
Private limited company It includes minimum have two shareholders
and they not invite general public in order to
buying shares. They operates business function
smoothly which refers to small and medium
sized organisation with limited by shares or
guarantee (Laplaca, 2016).
Cooperative enterprises There ample numbers cooperative organisation

which are established in UK and they majorly
work in retail sector. It provides low price
grocery product items which share profits each
members of company.
Therefore, it include various kind of organisation and comparison on the basis of features
which work with for main purpose and aim so it run their business operations.
TASK 2
P3)Critically analyse the various business function in order to achieving organisational achieving
organisation goal and objective.
SBusiness functions plays major role in order to improving performance and productivity
of company and they link with the other business functions in order to achieving the organisation
goal and objective of company. Functional heads are handle business function in order to
assigned the roles and responsibility to each and every employees and that employees liable for
that as well as all business operation work together which improve the effectiveness of
organisation on that basis gaining competitive advantages and achieving sales target easily. In
relevance of Tesco, it operate various business and all they are coordinate with each other
(LETKOVÁ, 2018). There are ample numbers of business functions which are discussed below.
Marketing & HR-: Both these functions of organisation are important in order to they are
linked to gather and their functional heads work with collaboration due to marketing manger of
Tesco providing information HR head they required that numbers of candidate which helps to
easily carrying out business activities on that basis HR manager hiring and recruiting of
candidates who are capable and able to performing task in effective and efficiently. HR
department filled vacancy with right person at right time.
Marketing & sales-: In relevance of organisation, both the department linked together in
order to marketing depends on sales department due to without sales organisation cannot survive
for long term. It includes sales manager assigned the work to their executive and using various
kind of tools and techniques in order to sales the products and services. Marketing head
accordingly promotes the products and services which easily attracting to large numbers of
customers (Liu and et. al., 2016).

Marketing & finance-: Finance is major pillar of an organisation in order to preparing
estimation and cost for all the activities which are carrying out. In context of Tesco, it involves
finance manager preparing budget for marketing department and they are linked internally due to
finance department provide fund to marketing head on that basis they are arranging the activities
and promote the products and services.
Marketing & customer service-: Customer service department plays vital role because
they take care of customers and takes feedback from customers regarding products and services.
Marketing and customer service department work with coordination in order to Tesco marketing
manager take the review and opinion from customer service department on that basis make
improving in products and services. Marketing department helps to organisation generated the
revenue and they work properly so on that basis easily capturing market share and developing
image in the mind of customers.
Marketing & production department-: In reference of organisation, it include operation
department converting raw material into finished goods which organisations conducting market
research to know about the customer taste and preferences on that basis providing information of
production head accordingly make changes in products and services due to attracting large
numbers of customers and improving performance of company.
Hence, all the above concept include the business functions which organisation operate
effectively in order to developing goodwill at marketplace (Misyura, 2016).
Organisation structure of Tesco
Tesco is one of the leading brand across globe and they utilizing hierarchical organisation
structure in order to communication flow from top to bottom and their mangers delegate
authority to their employees and they are accountable to perform task in very well mannered. It
is centralised system in due top level of management take all the important decision and provide
information to their subordinates and their employees easily communicate their problems with
managers.
Thus, it considered all the business functions which are linked together and they
effectively using organisation structure in order to easily attainable organisation goal and
objectives of company.

TASK 3
P4) Examine the PESTEL model in order to improving business functions.
It is tools and techniques which organisation using in order to smooth flow of business
operation. In relevance of Tesco, it considered as PESTEL tool which helps to evaluate the
external factor such as political, technical, environmental, legal etc. All these factors affecting
business function because they accordingly developing new strategies which grape the market
opportunities. There are ample numbers of factors which are mentioned below (Peterson, 2019).
Political-: The political condition of United Kingdom is strong and stable in order to
their organisation are adhered to followed such rules and regulation. It considered rules,
regulation and legislation so Tesco followed all the aspect which imposed by government in
order to smooth flow of business function.
Positive impact-: These is the greater advantages of business in order to strong political
condition so encouraged the small business and they easily expand their business operations in
another country.
Negative impact-: Disadvantages of Tesco because they pay higher rate of import duties
which directly impact profitability of company.
Economical-: It plays important role due to include interest rate, inflation rates, GDP,
income distribution and exchange rate. All these factors affect the business policy and strategies
of company. In relevance of company, it involves economic condition of UK is strong so
organisation easily sale the products and services which helps to increasing profitability of
company (Rowe, 2018).
Positive impact-: When below the interest rates so it impact the business operation in
order to increasing profitability and capturing huge market share.
Negative impact-: When organisation face inflation period so it is disadvantages of
company due to decreasing investment and customer purchasing power so reducing profitability
of organisation.
Social-: These component is important which organisation essential to conducting market
research in order to know about the customer taste, preferences and market trends. It context of
Tesco, it expand their business operation in another country so accordingly they analyse culture,
belief, tradition, value and attitude towards the products and services.

Positive impact-: On that basis organisation know about culture, taste and preferences
accordingly provide goods and services so it shows the positive impact on sales of company.
Negative impact-: When organisation not conducting market research and not fulfil the
needs and wants of customers so it not developing brand image in the mind of customers
(Tasios, 2018).
Technological-: In today's scenario technology changes very fast and accordingly
developing new innovative products and services. Tesco managers utilizing effective technology
in order to making innovative products and services which easily gaining competitive advantage
at market place.
Positive impact-: Tesco analyse the external environment and developing new strategies
which helps to making new innovate products and services and shows positive impact in order to
attracting large numbers of customers.
Negative impact-: When organisation utilizing outdated technology so it shows negative
impact on brand image.
Environmental-: These factors majorly organisation considered as recycling of products,
wastage of disposable and biodegradable and many more. In relevance of organisation, it
consider as developing products and services on the basis of climate, weather, pollution and
global warming so business sustainability increasing and they cannot harmful for environment
(Usubiaga and et. al., 2017).
Positive impact-: Organisation focused to developing eco-friendly products so
accordingly survive at marketplace for longer period of time.
Negative impact-: When organisation not using recycling products and services so it
affect the sustainability of business.
Legal-: These is important factor which include legal law such as labour law, wages,
fraud and legislation. In context of organisation, it organisation adhered to followed such laws
and rules in order to smooth running their business function of company.
Positive impact-: When organisation fulfil all the legal conditions and legislation so
developing transparency in the business function.
Negative impact-: When organisation doesn't adhere to follow such laws and legislation
so they cannot survive for long term in the market.

Therefore, these is important framework which organisation adapting in order to smooth
flow of business operations and functions because it helps easily achieving the organisation goal
and objective of company.
TASK 4
P5) Evaluate the internal and external factor which affect the profitability of company.
It include Porter's five forces tool which effectively analysed the business environment in
order improving products and services and accordingly formulated new strategies. In context of
organisation, it adapting these model in order to grape market opportunities (Van der, 2016). So,
here these model includes various factors which mentioned below.
Bargaining power of buyer-: In relevance of Tesco, it utilizing these model in order to
they have high bargaining power of buyer because there are ample numbers of options are
available at marketplace so buyer easily switch from one brand to another brand. It involves
many other supermarket are available they have dealing in similar segment so customer easily
purchased similar products and services.
Positive impact-: More buyers are available at market place so they attracting to larger
customer segment with the help of innovative products and services.
Negative impact-: Many supermarket available at market place so buyers have options
which impact the profitability of company.
Bargaining power of supplier-: In context of Tesco , suppliers bargaining power has
low due large numbers of suppliers are available in the market in order to easily negotiate the
products and services. There are ample numbers of buyers so they easily switch brand so they
cannot charge higher price of goods and services (Peterson, 2019).
Positive impact-: Those customer switch the brand so Tesco has opportunity to negotiate
products and service and charge better price for customers.
Negative impact-: When large numbers of suppliers so they affect the profitability and
productivity of company.
Threats of substitute products-: The various kinds of supermarket are available at
market place so the threat of substitute product is high with the reference of Tesco. It includes
various supermarkets which are dealing in similar segment so easily offering similar kind of
products and services.

Positive impact-: There are ample numbers options are available due to organisation
easily gaining competitive advantage and expand their business options.
Negative impact-: It include various substitute goods and services which affect the
market share and brand image of company.
Threats of new entrants-: Threat of new entrant is high due to required huge amount of
investment in order to start their business operations. In relevance of Tesco, it include ample
numbers of supermarket which developing cut throat competition so difficult to organisation to
operates the business functions.
Positive impact-: It involves developing high entry barrier so market easily gaining
competitive advantages and capturing market share (Rowe, 2018).
Negative impact-: When new competitors at market place so organisation spending more
money in order to promotion, advertising and many more.
Rivalry among existing firms-: These factors refers to competition among the existing
firm is high because they are provide similar kinds of products and services so which result as
high competition. In context of company, it developing strong barrier for new competitors
because other supermarkets are available ta marketplace.
Positive impact-: These factor have great advantages in order to healthy competition so
effectively operate business functions.
Negative impact-: It involves organisation face very cut throat competition which affect
the profitability of business.
Hence, it includes these model helps to developing new strategies and easily capturing
market share and attracting large customer base (Tasios, 2018).
SWOT analysis
In relevance of organisation, it utilizing these tools in order to analysed the internal
strength and weaknesses of company which helps to achieving organisational goal and objective
of company.
Strength Weaknesses
 Tesco is one of the leading brand so it
easily gaining competitive advantages
which helps to increasing the sales and
profitability of company.
 Organisation has ineffective
distribution and export system which
affect the performance of company.

 They are dealing in wide range of
products and services such as clothing,
food and grocery items (Kuscu, 2019).
 Tesco has high cost of debts liability
rather than from its competitors.
 Opportunities  Threats
 They utilizing advancement technology
in order to attracting large numbers of
customers.
 Organisation has opportunity to expand
their business operations in another
country.
 There are ample numbers of
competitors present at market place so
it is biggest threat for an organisation.
 Due to COVID-19 organisation faces
economic crises which impact on
business functions.
P6) Critically evaluate strength and weaknesses which interrelated with external factors.
TOWS Matrix
In context of Tesco, it is tools and techniques which utilizing by organisation in order to
analysed the business situation and condition and it helps to minimized the impact of weaknesses
and developing new strategies (Laplaca, 2016).
STRENGTH. (S) WEAKNESSES. (W)
Tesco  It includes big brand
name.
 Large amount of
capital
 It targeting larger
customers.
 They are providing high
quality products .
 Poor management
 Products and services
prices too high.
OPPORTUNITIES(O) (SO) STRATEGICS (WO) STRATEGICS
 It includes using a
new technology.
 They are more
options in order to
expand business
operations.
 They using effective
tools in order to
attracting more
customers.
 They sales their
products at cheap
prices.
 Suppliers get charge low
price in order to using
effective technology .
 To requirement of huge
amount of capital to
investing in business
model (LETKOVÁ,
2018).
THREATS (T) (ST) STRATEGICS (WT) STRATEGICS
 Brexit in UK is
biggest threat for
 Organisation open
more outlet in order  Charge higher prices for

an organisation.
 Due to COVID-19
organisation face
very tuff situation.
to gaining
competitive
advantages.
 It require more
amount to investing
in business model.
customers due sale
branded products and
services.
 Encouraging and
motivating employees in
order to improve
performance of company.
Therefore, it is essential tool to analysed market condition accordingly making strategies
which helps to enhancing profitability of company.
CONCLUSION
From the above report it ha been concluded that business environment is includes various
factors such as internal and external which impact the profitability of business. It considered as
different types of business organisation on the basis of their features as well as various kind of
business functions which are linked together. It involves the PESTEL model, SWOT analysed
and TOWS matrix which helps to enhancing profitability and productivity of company.

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