The business environment comprises all the internal and external forces that impact the tasks and exercises of an association. It is an accumulation of everything being equal, people and different segments which could possibly be responsible for the firm (Asif, Garvare and Ahmad, 2011). Different components are associated with business surroundings, for example, clients, administration, supply and request, representatives, and business directions. The given report is based on TESCO which is a globally renowned UK-based retailer. It covers different types of organizations and how the size, scope, and purpose of each varies from one another. Along with it also included PESTLE and SWOT framework which aid in identifying various micro and macro forces affecting business operation.
P1 Different type and purpose of organization
Different kind of companies exist in the market place such as public, voluntary and private. Each one is distinct from one another in terms of purpose, legal structure etc. There are some organization that mainly run with an aim of generating high revenues while there are some who run with a motive of promoting the interest and welfare of society and its members.
Public: Such types of enterprises are control and managed by government of respective nation. They render service without the interest of making profit from it. Along with these, funding of public companies are managed by government only. For example: National Health Care Services.
- Company Overview: NHS is publically funded organization of England that provide medical and healthcare services to all British People and that too with free of cost. Basically it is funded by general taxation system and manager of Health Department.
- Purpose: “To improve the health and well-being of all its patients, people from all communities (Bhaduri and Ha-Brookshire, 2011).
- Types of Legal Structure: It compromise of central, state and local government who formulate all policies and legislation according to which all public players are bound to operate their business operation and activities.
Such associations are not controlled and overseen by government rather these are essentially dealt with by private players as it were. They produce benefits out of offers they make (Chetwood and et. al, 2014). Privately owned businesses produce income by going up against their opponents by guaranteeing that their products and ventures make an incentive for their objective client. For example: TESCO PLC
- Company Overview: TESCO PLC is a leading British multinational retailer, located in Hertfordshire, England. It is the 3rdlargest retailer in terms of profits and the 9thlargest in terms of revenue.
- Purpose: “To deliver high quality products at economical rate that create value for customer”.
- Types of Legal Structure: It is categorized into partnership, sole trader, co-operatives, and limited companies.
Such types of enterprises run with an aim of promoting the interest and welfare of society and its members. The main objective of companies under this is to improve the living standard of people. A few people like to fill in as a volunteer with a few foundations that give them no cash consequently.
- Company Overview: Maytree is a beneficent based association that assistance individuals in self-destructive emergency to re-establish trust and to reconnect with life. Their administrations run 24 hours per day. They have immense group of volunteers who about go through 77 hours with every visitor so to give them best administrations (Crane and Matten, 2013).
- Purpose: “To provide effective services and formulate strategies with a purpose of eliminating poverty and helping people who have attempted suicide”.
P2 Size and Scope of different types of organization
- Vision: "To convey better care, better esteem and better well-being to all legitimate English Residents"
- Mission: "To render nature of care to each individual on consistent schedule"
- Size: NHS was set up inside different nations of UK through various enactment. By and by, there are four well-being administrations running in United Kingdom including NHS Wales, NHS England, HSC Northern Ireland and NHS Scotland.
- Scope: Plenty of administrations related with well-being and therapeutic care is given by NHS to all UK occupants with a point of improving nation a place to live, for example, youngsters' physiotherapy, heart recovery, diabetes administrations etc.
- Vision: "To defend the social and financial privileges of each person".
- Mission: "To propel activity that prompts advance the intrigue and welfare of society and its individuals".
- Size: It is an independent beneficent trust who keeps running with a point of destroying neediness, advance instructive rights and human rights. Their administrations are accessible 24*7 with a point of giving administrations to individuals when they required
- Scope: It was established in the time of 1982 with a goal of making answer for expelling destitution and give direction to person who tries to attempt suicide.
P3 Inter-relationship between different functions of organization with its structure and objective
In a company, different capacities are performed which helps with achieving goals of organization. For meeting necessities of clients and giving great products to them, Marks and Spencer plays out a few capacities that aides in achieving its foreordained business targets (Kian Chong, Shafaghi and Leing Tan, 2011). Such capacities and their connection with targets are characterized below:
- Human resource department: This branch of firm performs part of enrolling, choosing and procuring gifted possibility for right position. Diverse exercises are related with this office, for example, execution examination, worker pay, pay and wages, preparing and advancement and so on. These all exercises helps HR manager of TESCO in expanding representative inspiration and accomplishing set goal and focuses of organization.
- Production and Operation Department: In this capacity, crude material is changed over into conclusive products. Activities chief apply different systems or methodologies that helps with controlling generation cost and guarantees ideal utilization of assets in a successful and productive way (Meiners, Ringleb and Edwards, 2014). In TESCO, this division helps with assembling products of high quality so as to address client's issues in an effective manner. It helps firm in accomplishing its set targets and destinations in a powerful way.
- Finance Department: This capacity of an association assumes significant part in running its exercises and activities easily and viably. TESCO's financial manager has the obligation to appoint spending plan and in addition dispense appropriate assets to all offices. They are additionally mindful to keeping up proper measure of back inside firm. This helps with performing exercises and activities on time which thusly brings about accomplishing goals of organization.
Different types of organizational structure:
In this, capacities are gathered into division which thus helps in getting adaptability activities of organization. Geography or product offering of firm is bolstered by required capacities and assets that are incorporated into specific division.
It is based on specific territories, elements of firm are isolated into little gatherings. This structure is usually utilized as a part of associations as it helps with acquiring productivity activities in light of the fact that common abilities are assembled by work.
Various Operations in Trailfinders Ltd.
In this structure, individuals are gathered all the while by 2 unmistakable operational points of view. It is mind boggling structure and utilized as a part of huge associations which works in a few nations. In TESCO, network structure is utilized as it is innately flexible that makes it gainful for firm (Sekaran and Bougie, 2016).
P4 Positive and Negative impact of macro factors using PESTLE Analysis
TESCO is a globally renowned brand which is engaged with the business of selling groceries, home-ware, electricals,clothing, electronics etc. It falls in the list of biggest companies that generate higher revenues. However food industry require lots of efforts to exactly penetrate in the selected targeted population. With the help of PESTLE Analysis, NESTLE will get the hint regarding enhancing operation at right time, right place & with correct direction. are you worried about assignment help at an affordable price?
As TESCO operate in several countries which means rules and regulation framed by government vary from country to country (Türetken and et. al., 2011, June). Company needs to laid stress on these political forces such as import-export excise duties, taxation, permission of government, political stability etc. for carrying out business operation smoothly.
- Strength: Due to ongoing political instability in the world, TESCO significantly contributes towards generating employment opportunities for vast number of people.
- Weakness: Any change in VAT rate will adversely affect overall sales of TESCO. Increase in VAT rate results in lowering customer purchasing power. As a result, consumer prefer to buy such products that are available on low cost.
It includes factors that are related with economic structure and policy of the country. Basically economic factors determines the extent to which entire economy is influencing the business. The economy of United Kingdom is showing positive sign in context of recovering from financial crisis. High gross domestic product and economic growth rate has been estimated. This comes as a benefit for TESCO as it is highly depend upon UK market.
- Strength: Any growth in UK economy will comes out as an advantage for TESCO because it holds near about 40% share of UK market.
- Weakness: Situations like economic recession, adversely affect the sales and revenue of the company. British People start consuming cheaper product instead of luxurious items.
These factors include likes and dislikes of customer that posses an impact on total sales figures of respective company. In modern scenario, there is a high shift observed in the taste and likes of consumer. Opinion of any customer quickly changes due to any change in the price or quality of company's product or services.
- Strength: Today most of the people prefer to buy products via online shopping websites. This enable TESCO to launch its own website which indirectly provide great assistance to elderly people who are facing mobility issues (Vaiman, Sigurjonsson and Davidsson, 2011).
- Weakness: Likes and Dislikes of an individual is constantly changing which comes out as a barrier for TESCO in terms of changing its product line on frequent basis.
High-end technology brings many opportunities for TESCO in terms of improving its supply chain management which aid in saving overall cost and energy on large scale. With the introduction of mobile technology its distribution network gets improved because consumer can simply order their preferred product through mobile only (Wack, 2017).
- Strength: TESCO has developed various self-service check-out point that gives convenience and simplicity to customers which in return reduce overall labour cost of the company.
- Weakness: In some of production process, TESCO is still using tradition technology which serve as their major drawback.
There are various government legislation and policies that directly influence overall performance of TESCO. Recently, Food Retailing Commission has framed new Code of Practices which implies that any company is not liable to change price without giving prior notice to its suppliers.
- Strength: The government of the UK has revise the way in which direct subsidy is allocated to farmers. As a result, farmers will now get high subsidy which improve their standard of living.
- Weakness: Non-compliance to rules and regulation formulated by UK government results in representing bad image of the company in customer's mind.
With increased pressure on companies in context of adopting such business practices that do cause any harm to nature or environment. Taking this into consideration, TESCO is adopting number of measures that all are aimed to protect the environment (Yu and Ramanathan, 2013).
- Strength: By 2020, the aim of TESCO is to reduce carbon footprints by by 50%. This results in improving image of TESCO in the mind of customer.
- Weakness: Any business practice that cause harm to environment or nature impact adversely as now a days everyone is becoming conscious about protecting nature.
P5 External and internal analysis of organisation to determine strengths & weaknesses
SWOT analysis is an strategic tool to review micro environment that represents firm's resources and capability that aid to competitive advantage (Zsambok and Klein, 2014). Following SWOT analysis help nestle to identify its strength and opportunities that makes company grow and weaknesses and threats that company must respond to.
SWOT analysis of TESCO:-
eroded away TESCO's profit margin
P6 Inter-relationship between strength and weakness of external macro factors
There is a interlink between strengths & weaknesses and macro factors exist in external environment of business. Identification of these assists in gaining competitive advantage in market as well as exploiting opportunities from it. Managers of Tesco needs to determine all those factor and their interlink in order to formulate strategies in proper way and attain objectives and targets of the company effectively(Bhaduri and Ha-Brookshire, 2011).
This force involves various variables such as regulations and policies and other which assist in developing teams.
Effective operations and activities are ensured by company by complying with political variables. This will assists in performing its operations in well manner.
Any political instability adversely affect overall functioning and operation of business.
Business working is exceedingly affected by monetary factors, for example, financing costs, collapse, expansion, trade rates and so on.
If the economy of individual nation is solid then it aids its improvement and long haul development and additionally likewise underpins in creating more benefits (Asif, Garvare and Ahmad, 2011).
Product request in advertise is very impacted amid expansion as obtaining intensity of clients turns out to be low.
It includes social parts of individuals of society and additionally age conveyance. Firms are require to satisfy necessities of society with the goal that their expectation for everyday comforts can be improved.
TESCO is occupied with different social exercises which encourages in building its solid picture in the public arena.
Production of those items which are of low quality decreases offers of merchandise and in addition incomes of firm.
Technological:Firm is require to continue refreshing themselves about any change that happens in innovation. It encourages them in getting high focused edge in showcase.
The use of most recent innovation in assembling of products helps with fulfilling clients in more better way and achieving upper hand in advertise (Kian Chong, Shafaghi and Leing Tan, 2011).
The use of customary procedures of creation may brings about declining development of organization.
According to above mentioned report, it can be concluded that size,scope, structure and purpose of every single organization vary from one another. Business operation and activities also gets influenced by internal and external forces that are available within and outside the company. Impact of these forces can be positive or negative depending upon the nature or size of business. Additionally, there are certain tools like PESTLE, SWOT that assist in identifying these forces and its impact on overall business operation. Inter-relationship among internal and external factors help running organization smoothly and also aid in getting high competitive advantage over other rivals exist in the market place.
- Asif, M., Searcy, C., Garvare, R. and Ahmad, N., 2011. Including sustainability in business excellence models. Total Quality Management & Business Excellence. 22(7). pp.773-786.
- Bhaduri, G. and Ha-Brookshire, J. E., 2011. Do transparent business practices pay? Exploration of transparency and consumer purchase intention. Clothing and Textiles Research Journal. 29(2). pp.135-149.
- Chetwood, M. K.,and et. Al, 2014. Transforming a legacy IT infrastructure into an on-demand operating environment. U.S. Patent 8,775,232.
- Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
- Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for designing business architecture. Elsevier.
- Kian Chong, W., Shafaghi, M. and Leing Tan, B., 2011. Development of a business-to-business critical success factors (B2B CSFs) framework for Chinese SMEs. Marketing Intelligence & Planning. 29(5). pp.517-533.
- Li, Q., and et. al., 2011. Towards the business–information technology alignment in cloud computing environment: anapproach based on collaboration points and agents. International Journal of Computer Integrated Manufacturing, 24(11) pp.1038-1057.
- López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental uncertainty and environmental management perception: A multiple case study.Journal of Business Research. 64(4). pp.427-435.
- Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business. Cengage Learning.
- Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach. John Wiley & Sons.
- Türetken, O., and et. al., 2011, June. Enforcing compliance on business processes through the use of patterns. In ECIS (p. 5).
- Vaiman, V., Sigurjonsson, T. O. and Davidsson, P. A., 2011. Weak business culture as an antecedent of economic crisis: The case of Iceland. Journal of Business Ethics. 98(2). pp.259-272.
- Wack, P., 2017. Shooting the rapids. Historical Evolution of Strategic Management, Volumes I and II, 1, p.121.
- Yu, W. and Ramanathan, R., 2013. Business environment, employee competencies and operations strategy: anempirical study of retail firms in China.IMA Journal of Management Mathematics. 24(2). pp.231-252.
- Zsambok, C.E. and Klein, G. eds., 2014. Naturalistic decision making. Psychology Press.