Unit 1 - Exploring Businesses – Assignment 2
Introduction –
The business I will be discussing throughout this assignment will be Tesco which is a for profit
organisation. A for-profit organisation which one that runs with the intention of making money.
P4 – Discuss the internal, external, and competitive
environment on a given organisation.
Introduction -
In this task, I will be discussing the internal, external, and competitive environment on Tesco
which is a for profit organisation.
The internal environment refers to the internal factors that affect an organization's operations,
such as its resources, capabilities, culture, and structure. These factors are within the control of
the organization and can be influenced by its management team. The internal environment
includes factors such as the organization's mission, vision, and values, its management
structure and style, its employees and their skills, its financial resources, its production
processes and technology, and its marketing and sales strategies. The internal environment can
have a significant impact on the organization's performance and success, as it affects the
organization's ability to respond to external factors such as changes in the market or
competitive landscape. By managing the internal environment effectively, an organization can
create a solid foundation for success and build a competitive advantage over its competitors.
The internal environment of Tesco includes its mission, vision, and values, management
structure and style, employees and their skills, financial resources, production processes and
technology, and marketing and sales strategies. These factors can affect Tesco's performance
and success and can be influenced by its management team.
The external environment refers to the factors outside of an organization that affect its
operations, such as economic, social, political, legal, technological, and environmental factors.
These factors are beyond the control of the organization but can have a significant impact on its
performance and success. The external environment includes factors such as changes in
consumer behaviour, the emergence of innovative technologies, changes in government
policies or regulations, and shifts in the competitive landscape. By understanding and adapting
to the external environment, an organization can identify new opportunities and threats, and
develop strategies to respond effectively to them. The external environment of Tesco includes
factors such as changes in consumer behaviour, economic conditions, technological
advancements, government policies and regulations, and competition from other retailers.
These factors can affect Tesco's performance and success and are beyond its control.
A competitive environment is a market situation where multiple businesses or organizations are
competing for the same customers or resources. In a competitive environment, businesses are
,competing on factors such as price, quality, innovation, and customer service in order to gain an
advantage over their competitors. The level of competition can vary depending on factors such
as the number of competitors, the size of the market, and the level of differentiation between
products or services. A highly competitive environment can be challenging for businesses but
can also drive innovation and lead to better products and services for consumers. The
competitive environment of Tesco includes other retailers in the UK and globally, which are
competing for the same customers and resources. Tesco competes on factors such as price,
quality, innovation, and customer service to gain an advantage over its competitors.
External Environment of Tesco -
Political – The political external environment of Tesco is influenced by a variety of
factors, including government regulations, trade policies, and political stability. For
example, changes in government regulations, such as those related to food safety or
labour laws, can impact Tesco's operations and profitability. Similarly, changes in trade
policies, such as tariffs or trade agreements, can impact Tesco's supply chain and
sourcing strategies. Political instability or unrest in the countries where Tesco operates
can also impact its operations and profitability. Overall, Tesco operates in a complex and
dynamic political environment, and it must navigate a range of political factors to
succeed.
Economic - The economic external environment of Tesco varies depending on a number
of factors, including economic growth, inflation, and consumer spending. For example,
changes in economic growth rates can impact Tesco's sales and profitability, as well as
its ability to expand into new markets. Inflation can impact Tesco's costs and pricing
strategies, while changes in consumer spending patterns can impact its product mix and
marketing strategies. Other factors, such as interest rates, exchange rates, and labour
costs, can also impact Tesco's operations and profitability. Tesco must manage a variety
of economic elements in order to be successful because it operates in an overall
complicated and dynamic economic environment. Tesco operates in a complex external
environment that is shaped by various fiscal policies. The fiscal policy of the UK
government, for instance, has a significant impact on Tesco's operations. For example,
changes in government tax policies can affect the amount of disposable income
available to consumers, which in turn can affect their spending patterns at Tesco stores.
Additionally, changes in import/export duties and tariffs can affect the cost of goods
sold by Tesco, which can impact the company's profitability. Tesco also operates in a
global environment, which means that it must be aware of fiscal policies in other
countries where it has operations. For example, changes in tax policies in countries
where Tesco sources products can affect the company's supply chain and profitability.
The monetary policy of the external environment of Tesco refers to the actions taken by
central banks to regulate the money supply and interest rates in the economy. These
policies can affect Tesco's operations in several ways. For example, changes in interest
, rates can affect Tesco's borrowing costs, which can impact the company's profitability.
Additionally, changes in interest rates can affect consumer spending patterns, which can
impact Tesco's sales. Central banks can also influence exchange rates, which can affect
the cost of goods imported by Tesco. Ultimately, changes in inflation can have an impact
on consumer purchasing power and the demand for Tesco's products, which can have
an impact on Tesco's business operations. The supply side policy of the external
environment of Tesco refers to the actions taken by governments to improve the
efficiency, productivity, and competitiveness of businesses in the economy. These
policies can affect Tesco's operations in several ways. For example, policies that
promote investment in infrastructure, such as transportation networks and
communication systems, can improve Tesco's supply chain and reduce costs. Policies
that promote education and training can also help Tesco to develop its workforce and
improve productivity. Additionally, policies that promote research and development can
help Tesco to innovate and develop new products and services. Last but not least,
regulations that encourage competition can support keeping Tesco operating in a just
and competitive environment, which can be advantageous to both customers and
businesses.
Social - The social external environment of Tesco is influenced by several different
elements, including changing demographics, consumer preferences, and cultural trends.
For example, Tesco must adapt to changing consumer preferences for healthier and
more sustainable products, as well as changing demographics, such as an aging
population. Tesco must also navigate cultural differences in the countries where it
operates, and respond to changing social trends, such as the rise of e-commerce and
social media. Additionally, Tesco must consider social issues such as labour practices,
community engagement, and environmental sustainability. In general, Tesco operates in
a complicated and dynamic social context, and in order to be successful, it must be
adaptive to a variety of social elements. Tesco is committed to promoting savings in the
social external environment. The company recognizes that saving money is an important
concern for many consumers, and as such, it offers a range of products and services that
can help consumers save money. For example, Tesco has a loyalty program called
Clubcard that rewards customers with points for their purchases, which can be
redeemed for discounts on future purchases. Tesco also offers a range of own-brand
products that are generally less expensive than comparable branded products, which
can help consumers save money on their grocery bills. Additionally, Tesco has launched
several initiatives to reduce food waste, which can help consumers save money by
reducing the amount of food that they need to purchase. Finally, Tesco has also
launched several initiatives to support local communities, such as food banks and
community kitchens, which can help to reduce the financial burden on vulnerable
individuals and families. Tesco recognizes that spending and debt are important
concerns for many consumers in the social external environment. As such, the company
