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P4 Discuss the internal, external, and competitive environment of a given business.1 Introduction
There are several factors within the internal environment of a business that directly affect its operations,
performance, and outcomes. These factors and conditions are referred to as the internal environment of
a business. There are several factors and circumstances outside of an organization that can have a major
impact on its performance, its results, and its processes. They are known as an organization's external
environment. It is worth noting that a competitive environment refers to a set of external factors that
can affect an organization's ability to compete effectively in each marketplace as well as influence how
that organization operates.
2 Findings
External
Political
Political factors relate to Brexit, trade laws and party in power. An example of a political factor that
impacts on Tesco is that because of Brexit, an uncertainty has arisen around the UK and EU's trade
agreements, which could have a negative effect on Tesco's supply chain as a result. As Tesco imports
goods from the EU, such as fresh produce and dairy products, the company may experience increased
costs and delays in the transporting of goods if changes in tariffs or customs procedures occur. In the
end, these changes may have an adverse effect on Tesco's pricing strategy and margins, potentially
affecting consumer prices or reducing the profits for the company, depending on what the results are.
This has the following impact on their day-to-day running because as far as the Tesco supply chain is
concerned, Brexit has had an incredibly significant impact on the firm. In the wake of the UK leaving the
EU, there have been new trade barriers that did not exist before, which can cause delays and increased
costs associated with the transport of goods across borders because of increased trade barriers. To meet
the needs of its customers, Tesco imports a large amount of fresh produce and dairy products from EU
countries.
Economics
Economic factors relate to many factors such as inflation, cost of living, consumer spending and
economic growth. An example of an economic factor that impact on Tesco is that they are a
multinational retail corporation, has been adversely affected by inflation as an economic factor. The
phenomenon of inflation refers to the gradual increase in the prices of goods and services over time,
resulting in the loss of purchasing power for money as a result. There is generally an increase in raw
material and transportation costs when inflation occurs. This has the following impact on their day-to-
day running because Tesco's purchase of goods from its suppliers may be affected by inflation if inflation
increases the cost of goods. Materials such as raw materials, ingredients, and other products essential to
the operation of its stores can be included in this category. Tesco may experience higher procurement
costs due to a rise in the price of these inputs, which can adversely affect its profit margins.
Social
Social factors relate to people becoming vegan, starting to have a better diet and how people are trying
to have a better lifestyle. An example of a social factor that impact on Tesco is changing consumer
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