Business Environment Analysis: Tesco and Primark - A Detailed Report

This report provides a comprehensive analysis of the business environments of Tesco and Primark, two contrasting businesses in the retail sector. It begins by examining the types of businesses, their purposes, and ownership structures, highlighting the differences between Tesco as a public limited c...Read More

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Type of business, purpose and ownership of two contrasting businesses.............................1
P2 Different stakeholders who influence the purpose of two contrasting businesses.................2
P3 Two businesses are organized................................................................................................2
P4 Assistance given by style of organization in fulfilling their purposes...................................3
P5 Influence of two contrasting economic environments on business activities .......................4
P6 Political, legal and social factor's impact upon the business activities .................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
.........................................................................................................................................................6

INTRODUCTION
All the external as well as internal factors which can made an impact on decision making
process of an organisation are covered under business environment. If they do not considered
these elements at the time of planning tan they may fail to achieve their short as well as long
term goals. Tesco is one of the most successfully company of retail sector. They are operating in
more than 12 nations and they hold top spot in their domestic market. This report will discuss
about different types of business, their purpose and ownership. It will also included influence of
stakeholders on a business. System of organisation which help them in fulfil their purpose will
also become part of this file. Impact of economic environment on an organisation will also get
cover. At the end this report will discuss about political, legal as well as social elements which
can influence business activity of companies.
TASK1
P1 Type of business, purpose and ownership of two contrasting businesses
The reason of existence made a huge impact on the type of business. Tesco is a public
limited company, on the other hand their competitor Primark is a subsidiary company of
Associated British food. The main purpose of Tecso is to maintain their position of table leader
in retail sector on the other hand Primark focuses on provide quality goods and service to their
customers. Some of their products are expensive and do not target mass audience (Yagyasen,
Darbari and Ahmed, 2013). To offer stock at sensible costs; they require individuals as a rule to
have a broad assortment of contrasting options to them, so they offer them incredible quality
things at sensible costs; This will be expert by looking stores, offering practically identical
things, and making our costs lower than various spots.
Tesco on the other hand focus on providing more goods at a competitive price. They want
to offer every time of item in their store because they have a strategy to enhance their sale by
offering more products. Tesco offers a broad assortment of things and organizations from
essential needs, family things ,attire to assurance. Cited organization's ownership is guaranteed
by a couple of accessories , they asserted by countless this is by virtue of Tesco is a PLC and is
asserted by investors who sponsor the association. Primark's proprietor, Associated British
Foods, is the latest association to feel the torment of record low overlaid yields. The social
occasion's UK benefits plot has dove from a little surplus this time a year back to a £200m lack,
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which has realized "an extended organization cost and a higher interest charge one year from
now".
P2 Different stakeholders who influence the purpose of two contrasting businesses
An organization has various types of stakeholder, some of them has power to made a
huge impact on the decisions taken by management while other do not have such capacity.
Tesco's customers have a tremendous effect over the business. They use their customers
information to reveal any legitimate and expected upgrades to their business. Customers can give
their considerations, points of view and comments with a particular true objective to reveal to
Tesco how they are doing as an association and what updates they feel ought to be made etc.
They don't offer the right organizations, things and progressions, at that point their customers
will end up shopping in choice stores. The essential concentration of Primark's is that customer
who are especially discerning about shape and besides the people who needs regard for their
money (Witkowska, 2011). In the relationship there are such an assortment of different
accomplices like advance supervisors, customers, boss, specialists, government, suppliers, union
and gathering. In the affiliation considerations of each accomplice are unmistakable.
Both companies should bifurcate their stakeholders in four part, in first part they should
concentrate on stakeholders who take more interest in business operation of organizations and
have power to influence decisions making process. They option should be heard and accepted if
it can make positive impact on business. Second are those stakeholders who do not have much
power and do not take interest in business activity, they should be keep posted in occasional
basis. Third one are those who has high power but do not take much interest in business, they
should be report about operations of company. The last one are those stakeholder who do not
have much power but they are keen about organizational activity, their queries should be solved
but enterprises do not need to take them to seriously.
P3 Two businesses are organized
Instead of focusing on broad level Tesco concentrate their business at store level. Tesco
has 10 member in their team of board of directors. Tesco definitive structure is particularly
dynamic reflecting the immense size of the business. In reality, even in store level, there are
upwards of four layers of organization in some broad stores. If they shortens size of their scalar
chain than they can avoid various type of confusions. Tesco's purpose is to serve its customers.
The primary function of any business is to make money and invest; if it doesn't do that, it can't
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exist. Tesco is a major retailer in grocery and general retailing. As Tesco is a profit-based
business, it maximizes their sales and profit, expanding to maintain its competitiveness in
addition to outshining competitor (Taipale-Erävala, Heilmann and Lampela, 2014.). It also
focuses on providing shareholders with progressive returns on their investment improving
profitability through investment in efficient stores and distribution depots, in productivity
improvements and in new technology, developing the talents of its people
Primark on the other hand has a short scalar chain. They the Primark Stores Limited
Introduction Primark Stores Limited is a reinforcement of Associated British Foods PLC, and
they have transformed into a settled family name starting late. It has set a benchmark for a few
associations to follow in a section of the market named the 'regard division'. The association was
set up to make clothing that is a motivation for money, so to speak you are paying for the idea of
the thing and not for the check that come joined. As to things and organizations it is clear to see
with the figures over that demand has extended rapidly concerning late years trading. This is in
light of the fact that now Primark are overseeing in a prominent market however with direct
pieces of clothing for everyone in the standard market.
P4 Assistance given by style of organization in fulfilling their purposes
Tesco only focuses on their leading the market. They are ready to adopt any kind of
strategy for this. Sometime, instead on focusing on quality they concentrate on increasing their
sale so they can earn more money. They try to introduce innovations in their business so they can
get some extra edge over their competitors (Schmidheiny, 2011). Giving to much attention to
organic food is an example of their style of doing business. A business needs an unmistakable
capacity to know east from west, which must be clearly passed on to all accomplices. This is the
purpose of the business which would then be able to be isolated into smaller focuses and
objectives. There are past suppliers that Tesco have had a positive relationship with and some of
which the suppliers have been kept right now.
Primark on the other hand has completely different style of conducting their business.
They try to focus on the things in which they are good or at least above than average. This keep
them maintaining a decent level of motivation which is necessary for fighting major players.
Primark furthermore have a publicizing bunch which is moreover something to be grateful for
the business since it suggests that they end up plainly familiar with what the customer considers,
which infers that they can costs back to the buyers and distinctive divisions so they can change
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the way that the show and the things are (Schepers and Van den Berg, 2011). The structure
makes them work more capably and quickly which is something worth being grateful for in light
of the way that then it infers that they can stay before their restriction and makes the arrangement
build up every day.
P5 Influence of two contrasting economic environments on business activities
The economic environment is the totality of economic factors, such as employment,
income, inflation, interest rates, productivity, and wealth, that influence the buying behavior of
consumers and institutions. The influences of branding on price sensitivity and elasticity of
demands effects the demands when the price is to high the demands will go down, this gives an
indication that the price of the brand is sensitive to prices, and it also shows that the elasticity of
the brand is inelastic which shows that the brand should not increase the price or the demands
will go down. Tesco plc might use elasticity of demand when marketing changes to prices of
branded products for example if the prices have changed on particular product and the demand
have decreased form that particular product for a period of time, using the elasticity formula by
dividing the changes of demands by the changes of the change of price which will give a clear
indication of the price elasticity of demands.
Stability in the economy is forever changing again for good and bad and it all depends on
if they have changed are buying habits, if they spend more we will have a strong and stable
economy and it’s the opposite for a bad and unstable economy (Kennerley, Neely and Adams,
2011). The reason why Tesco plc might choose to stock branded products as well as offering
own branded products is because branded products tend to be affordable for Tesco plc so that
they can put the prices up to make profit, but branded products tend to be expensive for
consumers, so there is an alternative of the cheaper own branded products for consumers to
purchase.
P6 Political, legal and social factor's impact upon the business activities
Political - Political stability is usually defined as the state of peace that is normal
experienced in a country from the activities from the government and also the government in this
situation will make decisions and keeping the best interests in mind for people. Recently
government of UK took an important decision that they will reduce the subsidiary which they
were giving to farmers (Kennerley and Neely, 2011). These peasant supply goods to Tesco, if
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they will not get financial assistance than they will reduce quality of raw material which will
influence quality of finished products which cited organization is offering in their stores.
Legal - The legal impacts are that Tesco must follow the law, and an example of this is
the trade description act, this is where the product most be described accurately otherwise it can
cause an issue and an example of this the big issue with meat earlier this year, so it is extremely
important that you describe the product well and accurately if not then the trading standards will
have no other choice but to get involved (Constangy, Marger and Brompton, 2015).
Social – Tesco is proving job to million of people, in present scenario unemployment is
considered s one of the biggest problems faced by most of the countries. By giving jobs to large
number of people they are gaining trust of people. Tesco is a company that will support charities
and the main one they support every year is tickled pink, they are always thing outside the past
ways they have raised money to, give customers a new product to buy to support the charity.
CONCLUSION
At the end, it can be concluded that business environment make a huge impact on
business of an organization. Stakeholder can also influence business operation of a company so
they need to be managed in a manner that powerful stakeholders get proper attention and other
do not feel isolated. Reason of existence of an enterprise either have direct or indirect relation
with its mission and vision.
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REFERENCES
Books and journals
Constangy, H.W., Marger, E and Brompton, A., 2015. CHANGING BUSINESS
ENVIRONMENT.
Kennerley, M and Neely, A., 2011. Measuring performance in a changing business environment.
International Journal of Operations & Production Management. 23(2). pp.213-229.
Kennerley, M., Neely, A. and Adams, C., 2011. Survival of the fittest: measuring performance in
a changing business environment. Measuring Business Excellence. 7(4). pp.37-43.
Schepers, P and Van den Berg, P.T., 2011. Social factors of work-environment
creativity.Journal of business and psychology. 21(3). pp.407-428.
Schmidheiny, S., 2011. Changing course: A global business perspective on development and the
environment (Vol. 1). MIT press.
Taipale-Erävala, K., Heilmann, P. and Lampela, H., 2014. Survival competence in Russian
SMEs in a changing business environment. Journal of East-West Business. 20(1).
pp.25-43.
Witkowska, J., 2011. Foreign direct investment in the changing business environment of the
European Union’s new member states. Global Economy Journal. 7(4). pp.1-30.
Yagyasen, D., Darbari, M. and Ahmed, H., 2013. Transforming non-living to living: a case on
changing business environment. IERI Procedia. 5. pp.87-94.
Online
Neil Kokemulle, 2017. What Are Internal & External Environmental Factors That Affect
Business? [Online]. Available Through: <http://smallbusiness.chron.com/internal-
external-environmental-factors-affect-business-69474.html>. [Accessed on 24st August
2017].
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