BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3 A+ Updated
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BTEC Level 3 National Business
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BTEC Level 3 National Business
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BTEC Level 3 National Business Student Book 2
BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3 A+ Updated Unit 1: Exploring Businesses A.P2 – Explain How two contrasting businesses are influenced by its stakeholders A.M1 Assess the relationship and communication with stakeholders of two contrasting busi...
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catherine richards rob dransfield
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BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3
BTEC business level 3: unit 1 - exploring business task 2 : P4,
P5, P6, M3, M4, D2, D3 (Distinction* grade *)
P4
Introduction
In this task I will be discussing how the internal and external
environment affects an organization and the organization I have
chosen is Tesco Public Limited Company.
Tesco PLC, a British Grocery and merchandising retailing are a
market leader in the United Kingdom‟s grocery market, as well as
a well-known grocery chain found across 12 countries. As a
leading retailer with 450,000 employees, Tesco PLC serves
millions of customers every week, in their stores and online.
External Environment
The External Environment has a great impact on businesses and
is comprised of multiple factors. These factors are often used by
businesses to help analyse how and why they will be successful.
This analysis is known as PESTLE which stands for:
• Political
• Economic
• Social
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, BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3
• Technological
• Legal
• Environment
Political
Political factor is one of the main concerns for Tesco PLC. With its
operations being within a globalised environment, with stores all
over the globe, operating in Ireland, Poland, Thailand and so on,
Tesco PLC‟s performance is extremely highly influenced by the
political and legislative conditions of the countries of which it
operates within. They have to follow the rules and regulations of
those countries and act accordingly. The UK Government
adopted a tax measure a few years ago that heavily affected
Tesco. In 2011, the UK government increased VAT from 17.5% to
20% with the aim to increase government revenue by £13bn
every year. This increase in VAT will negatively affect Tesco, this
is because the higher prices that the increase in VAT will cause,
thus resulting in higher prices for the majority of goods Tesco
sells. All of this will affect Tesco‟s revenue, and effects to revenue
can have a substantial effect on the company‟s profits.
Economic
Economic factors are of great concern to Tesco PLC, this is
because they are likely influenced by demand of product, cost of
employment, pricing of goods and overall profits. The UK‟s
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, BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3
economy has recently provided both positive and negative signs
because of the recent brexit. There might be some changes in
how the UK will engage and trade with Europe and it may be
either beneficial or non beneficial for Tesco PLC. There might be
change in prices and if the price rate of the goods increases
demands will decrease and vice versa. Fewer individuals with
disposable income results in a decrease in spending, which will
force Tesco PLC to lower prices or make lower quality foods and
sell at lower prices, which ends damaging the overall profit
potential of the company. And it may need to shift some
employees and decrease workforce because they won't be able
to pay for the manpower. It will ultimately affect profits and lower
the amount the shareholders receive as dividends at the end of
each financial pay out for Tesco PLC. However, recovery from
such an economic recession stimulates revenue growth for Tesco
PLC.
Social
In the United Kingdom, the number of elderly individuals is on a
massive increase due to the baby boom generation. In past years,
there used to be a decrease in the birth-rate and an increase in
the life expectancy of people. This led to a shift of tastes of people
which is required to be taken in to an account by Tesco PLc.
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, BTEC business level 3: unit 1 - exploring business task 2 : P4, P5, P6, M3, M4, D2, D3
Demographic changes such as the UK‟s aging population,
increases in the UK‟s female workforce and the decline in home
preparation meals, means that UK retailers are also focusing on
added-value products and services. There are a variety of social
changes that have caused trends to indicate that customers in the
UK seem to move towards bulk shopping or one-time shopping
for their groceries. A response to this social change by the
company is an increase in the non-food items on sale within
stores as well as on Tesco‟s online store platform.
Technological
Technology is a major factor which has been the important
variable that has greatly influenced the development of many
Tesco products and services. The new advancements in
Technology allow Tesco PLC to reap benefits as the customer
satisfaction rises because goods are able to be more readily
available, services can be more personalised and also arrive
more quickly. Tesco has now taken advantage of modern
technologies such as Wireless Connection, Price comparison
machine, Shelf Labelling, Self-Checkout machines and product
Identification machine. The adoption of such technologies have
seen great improvements in the efficiency of distribution, stocking
activities, with the need being communicated almost in real time
to suppliers. Using online shopping also makes shopping easy
and convenient for the customers and saves a lot of time.
Environment
Recently, there has been increased pressure on many companies
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