LO1 Make an interpretation of the information associated with the analysis of the firm’s business environment
LO2 there has been severe impact of government not only on the structure but also on operation of business organizations. Explain how?
LO3 What understanding is gained by viewing the impact of changes in the business environment on Tesco and activity
using CW1, you came to know about certain drivers and PESTLE analysis thus further you are required to consider a SWOT analysis, as well as examine the ways in which these key drivers can impact upon TWO of the firm’s functional areas such; Marketing, HRM, Operations, Finance and R&D
In a business firm, the global business environment is defined as the various external forces that surround the firm and influence their decisions making and operations. In that regards organization faces unprecedented challenges and opportunities in social, political, and business environment. The respective report is based on Tesco which is a multinational retailer of general merchandise in England. The respective report is based on CW 1 by evaluating PESTEL analysis to determine the effects on the firm's functional areas and determine SWOT analysis.
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SWOT analysis is one of the most important strategic planning techniques that enables to an individual as well as organisation to identify strengths, weaknesses, opportunities and threats related to business competition or planning of project (Atiku and Fields, 2020). In context of Tesco their SWOT analysis are as follows:
The major strength of the Tesco that they are leading grocery retailer and foremost super market chain in the UK marketplace. They have higher sales and revenue in comparison to the other market chains in British market. So respective factor proved beneficial for organisation to enlarge business opportunities in other market as they possess distinctive identity.
By using the diversified marketing strategy that proved beneficial to satisfy consumer wants positively (Dabelko and Conca, 2019). They deals in clothing range, home appliances, mobile phone business and music downloads.
The major weaknesses in front of respective organisation that they charged with fines due to misleading accounting declaration of profits that lower down their image in market.
Although Tesco is leader in the UK marketplace, but due to the low cost strategy they not able to gain high profit margins.
They always find out spheres to enlarge business opportunities, as they recently introduced Jacks which is a new discount store that helps them to gain higher growth opportunities. They have adequate funds and brand identity so by using that they easily open their stores in various nations (Gray, 2019).
They possess the greater brand identity they by focusing on the formulation of strategic partnership with the other well known organisations will proved the excellent opportunity for Tesco to remain competitive in marketplace.
The major threat in front of respective organisation that due to the Brexit, the trade deals and cost matters a lot for them. So managing all affairs in effectual manner is a fierce threat for respective organisation.
They operating in the fierce competitive world, with the rising growth and performance of Walmart, carrefour and Aldi which are biggest competitors. So building a distinctive identity in marketplace is a great threat for them.
Impact of key drivers on functional areas of business.
The common functional areas of business consist of the sales, marketing, finance and accounting, customer service that are affected by both the internal and external business environment (Hair Jr, Page and Brunsveld, 2019). So it is very important for management to evaluate respective factors to overcome from the adverse impacts of business environment. In context of Tesco they evaluate impact of key drivers on two functional areas that are HRM and marketing.
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Impact on HRM:
While Brexit takes place in the environment of UK the HR department not prepared for the impact that it will have and already had (Klepac and Berg, 2019). HR directors ordered to the teams to collect the necessary data and information by undertaking scenario planning to give direction for attracting and retaining potential talent Post Brexit. So in context of Tesco's HR department they face problem of decrease in no. of talented workforce that simultaneously decrease their profitability.
Various laws and regulations:
Tesco adopted the various kinds of laws and regulations that helps in better functioning of business activities. By using employment, safety and national minimum wages that provides discipline and positive work culture within the organisation. All rules and regulations that are applied by them internally positively influence on their level of productivity and profitability.
The another major functional area is marketing that helps to acknowledge consumers taste and preference to reach them for providing better consumer experiences to them (Trad and Kalpić, 2019). In context of Tesco with the help of PESTEL analysis organisation evaluate the impact on their marketing activities that are as follows:
Tesco always focus on using most technologically advance tools and techniques that helps them to reach at large no. of consumer base by evaluating their needs and wants properly. By using social media tools, visualisation effects they can be able to market their products in most ease way. So technological advancement provides them competitive advantage and enhance their level of profitability.
Investment in CSR activities:
In context of Tesco they pay attention on save the environment and also invest their money on CSR activities. It helps them to build distinctive identity in minds of both consumers and employees that positively affect on the employees productivity and enhancement in no. of consumers. Therefore environmental factors proved very much beneficial for marketing to market products and services profitably (Tran, 2019).
Consumers changing needs and demands:
In the competitive era the consumers are very demanding as they always want innovations in the products. In that series marketing department responsible to satisfy the emerging needs and wants (You and et.al.,2019). So it enhance their competitiveness and more technical to compensate demand of consumers in most strategic manner. So respective factor enhance the no. of competitive people in organisation that always dedicated to serve the consumers in best manner.
So all respective factors are very much potential for organisation as well as individual to satisfy the consumers wants in most positive manner. So evaluation of all factors is significant for organisation to behave strategically for gaining competitive advantage.
From the above report it has been concluded that for an organisation it is very much important to evaluate or examine the business environment to build strategies and tactics. It is effective to analyse the internal and external factors and their effect on the functional areas of business in order to remain competitive.
Books and journals:
Hair Jr, J.F., Page, M. and Brunsveld, N., 2019. Essentials of business research methods. Routledge.
Klepac, G. and Berg, K.L., 2019. Proposal of analytical model for business problems solving in big data environment. In Web Services: Concepts, Methodologies, Tools, and Applications(pp. 618-638). IGI Global.
Trad, A. and Kalpić, D., 2019. The Business Transformation Framework and its Business Engineering Law support for (e) transactions. In Advanced Methodologies and Technologies in Business Operations and Management (pp. 230-246). IGI Global.
Tran, B., 2019. The next generation of leaders: Women in global leaderships in hotel management industry. In Gender Economics: Breakthroughs in Research and Practice (pp. 492-518). IGI Global.
You, K. and et.al., 2019. Bridging technology divide to improve business environment: Insights from African nations. Journal of Business Research. 97. pp.268-280.