BTEC Business Level 3 Unit 1 Exploring Business
Assignment 2
Learning Aims C & D
C Examine the environment in which businesses operate
D Examine business markets
For the second assignment, you will be writing about a business that trades in the EU and
looking at the environment they operate in. You need to consider how the business has
responded to past changes and evaluate how it may react to future changes. You will be
choosing Tesco and you need to collect information about the business to complete the
following tasks.
Insert a header with your name, the unit name and number and a footer
showing page numbers
Include a bibliography showing all sources
Any copied material must be sourced within your work
Any copied text must be sourced within your work and should be in italics
COVER ALL BULLET POINTS
Your work must be organised in logical sections as below
LINK TO TEXTBOOK
https://www.pearsonschoolsandfecolleges.co.uk/FEAndVocational/
BusinessandEconomics/BTEC/BTECNationalsBusiness2016/Samples/Student-Book-/BTEC-
National-in-Business-Student-Book-Sample-Material-Unit-1-web-ready.pdf
,BTEC Business Level 3 Unit 1 Exploring Business
C.P4 Discuss the internal, external and competitive environment on a given business
C.M3 Assess the effects of the business environment on a given business
C.P5 Select a variety of techniques to undertake a situational analysis of a given business
The Internal Environment (C.P4)
You will need to look at the environment in which TESCO operates and gather information
to enable you to consider the following points:
1. Corporate culture (how the business behaves, treats its staff, what its values are)
2. Corporate social responsibility (CSR) (how caring Tesco is to stakeholders, society
and the environment)
3. Explain the importance of the Internal Environment to Tesco (C.M3)
The Competitive Environment (C.P4)
1. Explain what competition is
2. Explain the different competition that Tesco faces in the LOCAL, NATIONAL and
INTERNATIONAL markets
3. Define Competitive Advantage
4. Factors that influence competitive advantage:
Explain how the following contribute towards Tescos competitive advantage:
* Differentiation (how the brand or product is seen to be different from competitors)
* Pricing policies (value range, discounts, offers, extra loyalty points
* Reputation (what customers think of Tesco)
* Market share (with the largest % of the market it can keep costs low and affordable to
advertise, and has customer loyalty)
* Cost control
* Technology relationships with :
● Customers (apps, loyalty cards)
● Suppliers
● Employees
5. Explain the importance of the Competitive Environment to Tesco (C.M3)
The External Environment (C.P4)(C.P5)
Discuss the following external factors that affect Tesco:
1. Political factors (government decisions = BREXIT (rise in the cost of imported food,
fewer EU workers available), fewer plastic bags, VAT increase, takeovers allowed or
, BTEC Business Level 3 Unit 1 Exploring Business
blocked, planning permission for new stores), reducing sugar and salt, obesity
concerns, five-a-day fruit and veg campaign
2. Economic factors
Low-interest rates = make it easier for people to borrow and spend
Exchange rate = the weak £ makes imported food more expensive but exports
cheaper abroad
Inflation = the rise in the cost of living makes consumers more price-conscious (shop
around)
Economic growth is weak = people spend less on luxuries, go to discount stores
Taxes = the increase in VAT makes many goods more expensive
3. Social factors (demographics = ageing population needs appropriate products,
consumer trends, ways of shopping, click and collect, online, self-service, preferring
Tesco Express to out of town stores, deliveries, social media reviews, foods for ethnic
minorities, gluten-free foods, low carb foods, fair-trade, ethical concerns
4. Technological factors (self-service tills, internet, online shopping, phone apps,
Clubcard data, RFID chips),
5. Legal factors (minimum wage, equal pay, health and safety, food labelling etc)
6. Environmental factors (pollution, noise, waste food, energy use, transport etc)
7. Explain the importance of the External Environment to Tesco (C.M3)
C.P5 Select a variety of techniques to undertake a situational analysis of a given business
1. Explain what PESTLE analysis is.
2. Refer to the work you did in P4 (do not copy it – just link back to it giving a couple of
examples, add anything else you can find)
3. Explain what a SWOT analysis is (Strengths, Weaknesses, Opportunities, Threats)
4. Do a SWOT analysis for TESCO
5. Explain what Porter 5 Forces are
6. Do a Porters 5 Forces analysis for TESCO
C.D2 Evaluate is the extent to which the business environment affects a given business,
using a variety of situational analysis techniques.
(Evaluate the extent to which the business has responded to past changes in the business
environment, and suggest how TESCO may react to future changes)
The business environment includes:
1. External environment
o Political
o Economic
o Social
o Technological
