Tesco And Its Business Environment Commerce Essay Example

high-quality products to customers, providing generous dividends to shareholders, and ensuring competitive wages for employees.

Based on Tesco's annual report for 2011/12, the group recorded a gross income of ?64,539m. The underlying diluted earnings per share stood at 37.41p and the dividend per share was reported at 14.76p. Furthermore, the group profit before tax amounted to ?3.8bn. As Tesco continues maximizing profits, shareholders can anticipate even higher dividends.

Every organization has a variety of stakeholders with different interests and concerns. Owners focus on profitability and growth, workers prioritize job security and satisfaction, directors seek high salaries and status, consumers desire safe and reliable products, while the authorities aim for successful businesses, increased tax revenue, and employment opportunities.

The community is advocating for increased investment in job opportunities and environmental protection. As the world's most respected company, Tesco offers these advantages to various groups of individuals. As a corporation, Tesco has a notable obligation towards the communities it serves, prioritizing environmental preservation and animal welfare.

Tesco is committed to reducing packaging for its products and has made a promise to use minimal packaging. Additionally, the company is taking steps to protect the environment by introducing low benzine gasoline in certain fuel stations, with plans to expand this initiative across the country. Moreover, Tesco offers resources and products to support individuals in their personal well-being. In 2011, Philip Clarke developed a comprehensive strategy consisting of seven components for Tesco's five business divisions - the UK, the United States, Europe, Asia, and Tesco Bank.

The schemes are as follows: To turn the UK nucleus, Tesco is committing ?1 billion to advance the shopping trip and drive progress. This includes engaging with customers, increasing

revenues, and investing in international retail merchants both in stores and online. In 1997, Tesco generated 1.8% of the group's earnings and in recent years that number has increased to 30%. As a result, Tesco is now ranked either first or second among 12 markets outside of the UK.

• Food points: Tesco is a major retailer of food items, along with other products.
• Strong retail services: Tesco provides robust retail services to customers. Currently, Tesco Bank is generating ?1 billion in revenue.
• Duties to communities: Tesco is a responsible company that prioritizes the needs of communities and the environment.

Tesco also has a positive brand image that caters to various customer needs and desires. It offers quality products at competitive prices while placing emphasis on customer service through its skilled team. Market share decreased by 30% in January 2012 but can be regained by enhancing the shopping experience for customers.

According to Andrew Trotman (2012), one solution to the problem is to implement a communication strategy to inform stakeholders and the general public. This approach aims to reduce the cost of everyday products, which in turn will benefit Tesco's business environment. As a leading player in the UK supermarket industry, Tesco recognizes the changing economic landscape. Consequently, the organization will prioritize understanding and responding to customer buying behavior patterns and consider the external factors impacting the company.

Undertaking

The unique features of the UK's national environment distinguish it from others. Tesco, like all organizations in the country, is significantly affected by both the economy and government economic policies.

The Competition Commission acts as a regulatory body overseeing and monitoring all industries and organizations in the UK to ensure fair competition. The economy plays a vital role in determining resource allocation within a nation's economy, which is crucial for effectively establishing and operating a business organization. Businesses benefit from three types of economic systems - market economy, planned economy, and mixed economy - that assist in resource allocation.

A market economic system entails investing, production, and distribution being determined by supply and demand, with the price of goods and services being considered in a free price system. On the other hand, a planned economic system involves decisions regarding production and investment being controlled by a central authority, such as a government agency, and can be centralized or decentralized. The planned economic system assists planners in achieving their goals more effectively.

Assorted economic system: it is a market economic system in which both the province and private sector jointly control the economic system, with strong regulations and ordinances. The allocation of resources is a type of economic theory that focuses on how states, companies, or individuals can manage economic resources or inputs in the market. The primary inputs typically include land, labor, and capital, with land being the most efficient resource for allocation.

Labour costs play a crucial role in resource allocation, as countries with lower labour expenses can manufacture products at a reduced price. Capital is also significant in this aspect. In 1995, Tesco, the leading UK retailer, launched Tesco Clubcard, which greatly contributed to its position as the top player in the domestic market and led to revenues exceeding ?32 billion.

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is known as one of Europe's fastest-growing financial service companies and the most successful Internet supermarket. It has been operating in this industry since 1995. Fiscal policy refers to how the government manages revenue and expenditure to impact the economy, affecting variables like aggregate demand, economic level, income distribution, and resource allocation. Conversely, monetary policy concentrates on regulating money supply and interest rates to foster economic growth and stability, with a focus on price control and reducing unemployment. The management of monetary policy is the responsibility of a country's government in addressing financial matters.

When the inflation rate is high, authorities try to control the money supply in the market. However, if the inflation rate is lower than expected, the government introduces new currency. Tesco, a well-known retail and supermarket brand in the UK, plays an important role in financial and monetary policy. This helps boost the economy and assists the government in maximizing revenue. As a supermarket chain operating in 14 countries globally, Tesco implements its own strategies to ensure smooth operations. These strategies include providing valuable customer services, hiring skilled staff members, offering online services, maintaining a strong brand image, and fulfilling community responsibilities.

Tesco is a leading company that encompasses various types of businesses. These include:

• Tesco: which comprises stores and supermarkets.
• Tesco.com: serving as their primary online shopping service.
• Tesco Bank: functioning primarily as a joint venture with Royal Bank of Scotland, offering insurance, credit cards, and savings accounts to clients.
• Tesco Direct: an online shopping service providing electrical appliances, homeware, and grocery delivery.
• Tesco Telecoms: offering telephone services including landline and mobile communication options.

To

ensure the smooth operation of the business, Tesco utilizes various business models. These models include supermarket stores, online shopping services through Tesco.com, banking services through Tesco Bank, online shopping via Tesco Direct, and telecom services from Tesco Telecoms. It is crucial for Tesco to consider competition within the sector. With dedicated employees and a commitment to providing excellent customer service, Tesco's business can experience rapid growth.

The PESTLE analysis examines the important external factors of Tesco. PESTLE stands for political, economic, sociological, technological, legal, and environmental dimensions. The external environment primarily impacts the organization's environment and also alters the company's financial operations.

The current political situation is affecting countries globally, resulting in increased unemployment rates. Tesco, being a significant and rapidly expanding retailer, provides employment opportunities. From an economic standpoint, Tesco competes with other retailers by offering top-notch products at affordable prices, guaranteeing consumer safety and fostering market competition. In terms of the social aspect, Tesco takes into account lifestyle trends, consumer purchasing behaviors, demographic data, as well as consumer opinions and attitudes.

Tesco has implemented a new purchasing system that allows the community to choose specific items from their stores. The most influential factor for Tesco has been the increase in internet usage. In response, Tesco has created a Sustainable Technology Fund worth ?100 million to reduce carbon emissions. Market dynamics constantly change, affecting the products and prices offered by organizations in a given market. Furthermore, cultural and social changes impact the choices, strategies, and operations of organizations.

Market structures refer to the specific characteristics of a market that businesses must consider. These characteristics impact competition levels and pricing decisions for products or services (Market Structures; A; Tesco,

2003 - 2012). In the highly competitive supermarket industry, Tesco holds significant power and captures over one-third of the market share, which is double Asda's share. This represents the proportion of the entire market segment served by Tesco.

Figure-1: Sources: Tesco Analysis, 2007.

Tesco has the largest market share in the supermarket industry, enabling them to provide customers with effective products or services at relatively low prices compared to competitors and other businesses.

Market forces, which involve the interaction between supply and demand in a market economic system, are essential for the operation of a free market. The relationship between supply and demand determines prices, with limited supply leading to higher prices and high demand causing prices to increase as well. Market forces encompass the dynamics of this interaction within a market. As a result, businesses' responses to these forces can have a significant impact on their profits and reputation. For instance, Tesco conducts market research to meet customer demands and ensure product availability. Other decentralized construction companies also adopt Tesco's approach.

The shop director benefits from their awareness of the market environment, allowing them to make informed decisions. This advantage is seen in the Tesco director's better understanding of market conditions. Tesco empowers its directors to make decisions that motivate employees and provide excellent performance. Along with selling food and non-food products, Tesco offers various customer services, including the popular Tesco Clubcard aimed at attracting more customers. The overall work environment of a company encompasses both its business and cultural aspects.

Different organizations have different cultures and structures. They shape the culture that is suitable for their business and can generate more profit for the organization. The cultural environment

influences the fundamental values, behaviors, and preferences of society and it affects consumer marketing decisions. Tesco, a supermarket chain store, operates in 14 countries worldwide. Thus, the company fosters a strong culture to satisfy its customers. Tesco employees share information and knowledge with each other, work as a team, enjoy their work, and manage their time effectively.

The Tesco company is a great place to work as its employees collaborate with clients, aiming to provide them with the best services. It practices three cultures: Better, which focuses on assisting clients and offering services that make them want to return; Simpler, which emphasizes more efficient work and less stress for staff members; and Cheaper, which ensures that customers can purchase products and services at lower prices compared to other options.

The United Kingdom actively participates in international trade, playing a significant role in its economy. As an EU member state, the UK and its organizations are influenced by EU policies and legislation (directives), as well as changing global factors. International trade is crucial for sustaining the UK's economic strength and development in an increasingly competitive global economy.

International trade involves the exchange of goods and services across international borders. It is essential for boosting sales of products and increasing economic growth. The significance of international trade varies between countries, as nations export goods primarily to expand their market or assist struggling sectors within their own economy. The concept of specialization and exchange forms the foundation of international trade, ultimately contributing to an overall improvement in global living standards.

Tesco, a UK-based supermarket chain, is a successful international company that has expanded its business into the European, North American, and Asian

markets. This expansion has affected all aspects of Tesco's operation, including business structure, corporate customs, organizational structures, and financial position. In late 2007, Tesco expanded its business in the United States, which provided them with an effective opportunity. Tesco is one of the world's largest retailers, operating in 14 countries and employing over 500,000 people. They serve millions of customers every week. Tesco operates in 14 markets across Asia, Europe, and North America.

Countries where Tesco operates its operations include:

• Tesco UK
• Tesco China
• Tesco in India
• Tesco Malaysia
• Tesco Lotus
• Tesco Check Republic
• Tesco Hungary
• Tesco Ireland
• Tesco Poland
• Tesco Slovakia
• Tesco Japan
• Tesco Kiap
• Fresh and Easy
• Home plus

The European Union (EU) consists of 15 original member states and has effective policies on UK business organizations. The EU supports consumer health and safety, ensuring qualified products. It has created regulations for organizations, particularly in the retail industry. As one of the largest retail industries in the UK, Tesco follows these regulations and provides consumers with safe and environmentally-friendly products.

Tesco will dominate the autumn with a market share of 30% by offering high-quality products and services. The

organization's dedicated employees contribute to its success, and its strong brand image instills trust in stakeholders.