BTEC Business : Unit 1 - Exploring Businesses / Summary BTEC Business : Unit 1 - Exploring Businesses
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Summary BTEC Business : Unit 1 - Exploring Businesses / Summary BTEC Business : Unit 1 - Exploring Businesses This assignment has been studied for a Public limited company, which therefore is Tesco PLC has been chosen. The external, internal, and competitive environments will be carefully examined ...
summary btec business level 3 unit 1 exploring businesses distinction
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Unit 1: Exploring Business
Learning aims:
C: Examine the environment in which business organization operate
Assignment title:
The Effects of the Environment on a Business
Introduction
This assignment has been studied for a Public limited company, which therefore is Tesco PLC has been
chosen. The external, internal, and competitive environments will be carefully examined and addressed.
Therefore, an introduction will be implemented which will be contrasted with these environmental
factors in the company. The study that discusses these environmental factors in a company and how the
company reacts will be implemented.
TESCO PLC
Tesco is a PLC Limited Public Company and is the leading brand in the grocery chain supermarket and
merchandising. It is in 12 countries such as Ireland and Thailand.
The company was founded in 1919. The business grew massively and had over 100 shops throughout
the country within the next decade.
Tesco currently has a £ 14.3bn market capitalization as of 2019. Tesco PLC is the 26th largest
corporation, the 77th largest corporation in terms of its sales and the 632nd largest in the world.
C.P4 Discuss the internal, external and competitive environment of a given
business
External Environment
External environment has multiple factors on companies and does have an impact.
PESTLE Analysis is used to determine when and why they will succeed.
Political
Tesco has highly influenced political and legislative circumstances set on its Quality in its globalised
environment with stores around the world.
,Tax Plan was introduced by the government in the UK which had an impact on Tesco. The Thailand
government increased the VAT from 17.5% to 20%. This increased Tesco’s Cost of sales and affected
Tesco a lot. This led to a decrease in revenue and profits for Tesco.
UK Government introduces Fat Tax which effected Tesco. The Fat Tax was introduced to lower obesity
on certain products. However, Tesco did introduce Healthy Food Section afterwards in the late 2014
Economic
Economic factors do have concern to Tesco PLC, as these are to influence the following:
• Product
• Cost Demand for Goods
• Employment
• Pricing Overall
• Profits
The economic factors are not in the control of the company and can have unfavorable effects. However,
even if Tesco is predicted to grow bigger and bigger in the UK Food market any downturn on the food
will have Tesco to be affected by it.
Tesco is without a doubt growing significantly. There is an increasing rate of unemployment with
economic recession. Due to this, many people have minimum wages or even access to disposable
income. Hence why Tesco is offering food at lower price at lower quality which ends up decreasing
company's overall profits. the decrease in the workforce is ultimately hurting the profits and lowering
the numbers of dividends that shareholders receive.
Social
Demographic always changes such as ageing population and reduction in home cooking made United
Kingdom retailers concentrate on products and services which contained added value
Tesco introduced online shopping to focus on elderly and people with mobility issue. Tesco has gotten
very successful doing this. Social changes have therefore led to trends that have indicated that UK
customers having move forward to bulk shopping or one-time grocery shopping. Therefore, this has led
Tesco put an increase in non-food items in sale in stores as well as the online store platform.
Technological
Technology has a major factor on many developments of products and services which Tesco offers.
Technology helps Tesco reach its potential by offering customer service through online and reaching out
to customers on long distant areas. The following Tech are not being used by Tesco:
• Intelligent Scales
• Electronic Shelf Labelling
• Self-Checkout achiness
• Wireless Connection
Legal
Laws and Policies have impacted results and the UK government is changing Common Agriculture Policy
which is a terrific example of this impact on agriculture products. The government does want to
, examine how to deliver subsidies to farmers therefore, these initiatives may result in lower subsidies
which influence the farmers. This, therefore, can cause Tesco fines if breached.
Tesco PLC is engaged outside grocery stores in financial service services such as credit cards, loans and
mortgages. The Prudential Regulatory Authority wants to ease the negative effects of disruption on the
continuity of financial.
Environmental
Environmental issues have been one of the major societies-based issues that threaten food retailers, a
key area to address this is for companies to act in a socially responsible manner. Tesco's corporate social
responsibility includes the aspects in which a corporate social responsibility.
Organization exceeds the minimum obligations imposed by regulations governance on stakeholders.
The government intends to launch a new strategy to reduce waste, reduce resource consumption and
mitigate damage to the environment. A new-found tax on extremely processed and full of fat foods was
imposed by the current legislation, this affected the subsequently modified Tesco brand lines, impacting
both manufacturers and consumers ' relationships.
Internal Environmennt
SWOT Analysis
SWOT Analysis is a structured planning method, evaluating four key elements of a business.
A SWOT Analysis involves an Organization's goals and objectives and classifying internal factors and
external factors that are either advantageous or harmful to the Organization's main aim and objectives.
Strengths
Tesco is the leading market of grocery which offers a value of money like their motto “Every little Help.”
Tesco has 7,000 stores worldwide. It has also opened subsidiaries such as Tesco Extra, Tesco Local and
Tesco Express. Tesco uses loyalty cards to help maintain customer loyalty
Weakness
Tesco experience in some of the market they entered such as own branded smart devices. A lot of cash
is needed to be invested in web tech and IT. Therefore, this can affect sales from Teso PLC. Debts has
also affected Tesco as the utilising of the credit cards as well as high insurance claims from households.
Opportunities
Many opportunities for Tesco as it can expand In the digital entertainment. It can invest in Blink Box and
have 80% of its ownership and it can aim foreign markets where the product is the most viable.
Online shopping offers customers flexibility. This is by expanding sectors operations. Families which have
financial struggles or maybe too busy to cook can be accommodated by Tesco's value depending on
their needs. Overseas expansion such as Australia will offer an increase in profits
Threats
Tesco PLC has a lot of market threats, clearly for being an obvious target for other bigger consumer food
grocery supermarket chains like Aldi, Waitrose and so on. One threat Tesco tries to struggle is Walmart's
purchase of Asda. In the UK, branding for shops like Asda Walmart has increased, reflecting a weakening
of customer dislike for Walmart. Walmart, being the ninth most respected organisation in the world, is
the leading global competitor of Tesco and therefore has the necessary abilities, resources and funds to
cause problems for Tesco.
SWOT Analysis helps the organisation to find the opportunities and threats they then find a way to
enhance probability after doing this. Once the threats are detected, they are analysed. However, the
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