Business & Business Environment- TESCO

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P1 Different types and purposes of organizations

Basis of difference	Tesco	Sainsbury	Iceland
Size	The market size of Tesco is large	The market size of Sainsbury is also large	The market size of Iceland is medium
Stakeholders	The major stakeholder of the company are customers, suppliers, employees	Main stakeholders of the firm are customers, suppliers, employees	In the Iceland also customers, suppliers, employees are the major stakeholders
Ownership	It is a Public limited company (De Ruijter, 2014)	It is also Public limited company	It is a Private limited company
Purpose	To diversify their business in varied markets	Exceeding expectations of the customers through providing healthy food with quality	The main purpose is to deliver products having good quality with reasonable amount
Business Sector	It is related with tertiary sector	It is related with both tertiary and secondary sector	It is related with tertiary sector (Jones, 2013)

Different types of organizations

Focusing towards the types of organizations, it is being categorized into private, not-for-profit and public companies. Speaking in relation with the private firms, the ownership as well as control of these firms is in the hands of individuals like Microsoft, Apple, Iceland etc. they just wanted to increase their revenue and profits. On the other hand, public companies are those who’s ownership and control is in the hands of government like army, hospitals etc. They are engage in developing different provisions about health, education and defense. Lastly, not-for-profit organizations, they are non-government firms and their revenue is re-invested in the expansion of the business. Employees are allowed to work on their account with or without any sort of payment (Coulter, 2005).

There are other organizations as well such as profit, non-profit and non-governmental organizations. Profit organizations include partnership, sole traders and limited companies and the main aim of these firms is to increase their income. Revenue is being regarded as an important source for their existence. Profits earned by these organizations are invested in those projects which can reap out further benefits to them and welfare of the community is the least priority for these firms. On contrary to this, serving the humanity and society is the main motive of establishment of non-profit organizations. They make use of their revenue being earned for the welfare of the community and natural environment where they perform their business activities. For non-profit organizations, donations and grants plays a pivotal role in their existence. Finally, non-governmental firms are formed by the general public and there main aim is to serve the society and humanity as a whole (DuBrin, 2008). They are not related with government and offer basic necessity to the needy people.     

Categories of organizations on the basis of their legal structures

According to the legal structures, there are generally four types of organizations such as partnership, sole proprietorship, limited and cooperatives firms. Throwing light in relation with the partnership firms, wherein two or more people come together and carry out their business operations. Both the partners have equal responsibilities and liabilities towards the firms. Further, sole proprietorship is generally regarded as a simple form of firms. An individual is the whole and sole of the business and he is the only one to invest the capital. Direction, organization, management and control of the whole business are in his hands. On the other part, limited organizations come into existence by collaboration of group of individuals who are known as shareholders (Huang and Huddleston, 2009). They have their legal entity different from the owners. There are two main kinds of limited firm public and private. Private limited firms cannot trade directly on stock whereas public limited firms can trade on stock directly and can advance capital. Last but not the least; cooperatives are those firms which are presents at the regional or territory level. The ownership is transferrable in this case.    

P2 Size and scope of various types of organizations

In the above paragraph, explanation in regards with the different types of organization was being done. Now, all these firms being described above have different sizes and scope of business. Explanation of all these is being defined underneath:

Articulating in relation with the size of the organizations, there are four types of firms i.e. micro, small, medium and large. Micro enterprises are quite small and provide employment opportunities to very few individuals. Business can be established with small amount of investment such as opening an ice-cream parlor, tea vendors and café. They have a crucial role to play in the economy of a particular nation. Small enterprise on the other hand employs few people and their sales figure is not so high (Jones, 2008). They can run by individual or through partnership. Other than this, medium firms are defined as those firms that offer employment to more than 200 people. During their start-up phase, they are small but due to steady growth, they turned out to be a medium enterprise. Finally, large organizations are quite big and control by public investors. For taking crucial decisions hierarchy is being followed, as there are numerous positions and levels within the organizations. They have their reach in different markets with large pool of diversified customers.

Concerning about the scope of these organizations, it is majorly categorized into various parts such as global, international, national, transnational and multi-national firms. Global firms are those firms which have their investment in other countries and have share in almost every part of the world. In spite of having global reach, they take into consideration same culture in all their branches so as to have same culture all over the world. In addition to this, global companies have one head quarter that manages the procedures of all branches. On opposing, international firms are being regarded as importers or exporters firms, as they do not have any kind of investment in the foreign nation (Atrill, 2009). They operate from their home nation only. On the other hand, there are national firms who carry out their operation in the home country only. They do not participate in type of foreign trade and are engage in offering products at the national level. Transnational companies are quite dynamic as well as complex. They carry out their operation in many countries but they have no home nation. Company working in different market has their own powers of making decisions in the foreign nation. On contrary to this, multi-national firms are those who have their sub-divisions in various parts of the world. But every location has different ways and methods of conducting the business, as they takes into account the culture and regulations of that particular nation in which they are working. If you seek dissertation help, then you can avail best writing service from our professional academic writers. 

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P3 Relationship between diverse organizational functions, their link to objectives and structure

Organizations have different size, structure, scope and functions. Even the firms operating in the same industry have some or the other differences. These differences are mainly related to structure and functions of the firms (Blythman, 2012). Todays, environment is very dynamic and complex, but the functions being performed by the firms are almost similar like finance, marketing, production, human resource and research and development. Furthermore, with the structure, companies get their foundation. If the firm has adopted proper structure then there will be better performance of the functions. Talking in references with the structures of the firm, they are majorly of three kinds such as functional, divisional and matrix. Functional structure helps in dividing the firm according to the functions being performed by them like marketing, sales, and operations etc. on the other hand, divisional structure categorizes the roles and responsibilities of the employees according to the projects and plans. In matrix structure, the roles are being divided as per products and functions. It is the most complex type of structure, where the controlling authorities are different. Workers do have project managers, if they are handling some kind of specific projects (Brealey, Myers and Allen, 2011).

It is important on the part of firms to select the best suitable structure as per the type of industry they belong to. Tesco also performs the functions as specified above like marketing, finance, production, operations etc. All these functions have some or the other relations with each other. If there is problem in one department, the other department will also be affected by the same. However, all the numerous functions being performed by Tesco has a common goal to achieve i.e. customer satisfaction, earning maximum revenue, achieving growth and success. Tesco has a good brand image and reputation in the market. They have their operations in different parts of UK. The firm has achieved such heights because of the implementation of innovative strategies. Tesco has taken into consideration expansion strategy for achieving business growth and thus, collaboration of each of the functions was required significantly. Here, the main role was to be played by the marketing department, as through their market research, the production department will get the direction about the type of products to be developed so as to satisfy the identified needs of the valuable customers (Atrill, 2009). The finance department was also involved, as budget for all the expense and related activities will be passed by them. Thus, it can be said that department and function of Tesco have their targets; however they are inter-connected with each other.   

Figure 1: Organization structure of Tesco

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P4 Positive and negative impacts of macro environment 

By carrying out PESTLE analysis, the positive as well as negative influence of the macro environment on the operations and working of Tesco can be ascertained and the analysis is as follows:

• Political– They are considered as very important factor, as they are directly linked with the operations of the firm. The current measures related to tax of the United Kingdom government has affected Tesco a lot. Consumer spending has been influenced because of the increase in VAT in the year 2011. Pertaining to this, the sales volume of the company has decreased (Eiteman, Stonehill and Moffett, 1999). The UK government has also implemented tax related to fat seeing the obesity and many medical problems in the citizens. These reforms will distress the foot falls in the store of Tesco.
• Economic– Because of the economic slowdown, the business of Tesco has affected a lot. However, at the time of recovery, the growth in the supermarket industry was also visible. There was increase in the prices of the products and services being offered by Tesco because of high rate of inflation and unemployment. This has resulted in downfall in the demand of some of the products (Bokaie, 2008).  
• Social– In this present global world, people prefer to have one stop shopping. In more simple words, they desire to have all the necessary and daily routine products at one shop. Seeking this thought in intellect, Tesco launched many new ranges of food products, which have reaped out positively to the firm. In addition to this, the taste and preferences of the customers have altered considering the climatic change, growing population of elderly people in UK and many other factors. Pertaining to this, Tesco started online shopping portal for grocery and other merchandise. This has helped the elderly people a lot and created a brand loyalty among them.   
• Technological – The encroachment in the technology has impacted the working of Tesco in a positive way. Online platforms and web related activities increased at a tremendous pace. With this, the firm was able to increase their sales up to 25% year after year. Other than this, the mobile technology has also helped Tesco in improving their distribution service, as customer can choose their taste of products through their mobiles (Johnson and Scholes, 2003).    
• Environmental – The Company is taking into consideration various steps to protect the environment. It is moral responsibility of Tesco to keep the environment safe and thus, the firm is diminishing the consumption of energy and making use of greenhouse gases. While making the store adjustments, such practices are being adopted by them. Furthermore, they have also initiated the campaign called “Reuse, Recycle and Reduce”. This has helped the company in building the brand image.
• Legal –Legal factor has a direct influence on the working of the firm. Because of the implementation of the agricultural policy in regards with the utilization of the agricultural products by the government of United Kingdom, the business of Tesco has impacted a lot. In addition to this, the fat tax reform has also disturbed the sales of the firm related to specific products (Williamson and et.al., 2004). However, these reforms has helped the firm in making alteration in their product and services offering and are now more complying the statutory and legal requirements.

Also read: Managing and Running a Small Business- Hawthorn international

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P5 Internal and External analysis of Tesco

• Strength– The leader in the retail brand at the global level, Tesco is persistently providing good quality products and services to the people all across the world. They have also implemented innovative business techniques and procedures by developing stores like Tesco Metro, Tesco express. This has made the experience of shopping convenient for localities. Furthermore, online shopping platforms and joint ventures are proving great strengths to Tesco (Wood and McCarthy, 2014). They are also attracting the pool of customers by offering products at reasonable price in comparison with their rivalry firms.      
• Weakness– There are wide products range in the basket of Tesco and thus, it proved to be major weakness as well. Moreover, the profits being earned are settled of by the bad debt from the credit cards. There is another issues related to the firm in terms of lack of experience about some of the market of smartphones and tablets. Lastly, Tesco’s web technology and IT technology is quite pitiable.
• Opportunities– Irrespective of the weaknesses, the firm can also avail opportunities like expanding in the market of digital entertainment, online shopping websites, oversees expansion in the areas of Australia etc. during the recession, customers can be accommodated by wider value and finest branding of the company, as they are financially weak or may be too busy to cook (Matsa, 2011).
• Threats – The major threat of Tesco is stiff competition in the market. There are many firms operating at the same level and industry such as ASDA, Lidl, Aldi, Sainsbury and Morrison, which are giving intense competition to Tesco. Due to recent takeover of ASDA by Wal-Mart, the branding of these stores has increased a lot. Tesco’s expansion can also be influenced by town planning, consumer intolerance and occupation for small shops.   

P6 Interrelation of strengths and weaknesses with macro factors

Articulating about the strength and weakness of Tesco, there is a direct relationship with the external factors of the environment where they carry out their business. The potential risk present in the market can be ascertained by taking support of strength and opportunities. The company is coming across with variety of challenges and issues which can be moderated by bringing flexibility in their structuring plans (Palmer and Hartley, 2006). Further, Tesco should avoid engaging in riskier projects. In addition to this, it is vital for the company to shape and mold their strengths into opportunities so as to make sure that the strategies are improving and ultimate objectives will be achieved. Other than this, all political and economic considerations should be taken care to ensure that their future is safe and secure. This is vital because, they are stepping in diversified retail strategy like online shopping, digital products by mobile technology, discount grocery products and many more. Additionally, it is important to note here that the strength of Tesco is based upon economic and social factors and consequently, growth of the market in the nations that are yet at the stage of development and are promoting healthy and fat free products will be the main opportunity for the organizations (Worthington and Britton, 2006).     

CONCLUSION 

Therefore, from the above discussion it can be concluded that the structure, size, scope, purpose, scale and structure of the firms are different. The current report has analyzed varied categories of the firm and was came to the deduction that even large organizations have more market share, but small and medium sized firms have more power in terms of growth and sustainability and are contributing more in the economy of a nation. By carrying out PESTLE analysis of Tesco, it was evaluated that there are many factors which have influenced the operations of the firm significantly. The later part of the report has assessed the strength and weaknesses of Tesco and has showed their inter-relationship with the external factors.  

REFERENCES 

• Atrill, P., 2009. Financial Management for Decision Makers. 5^thed. London: Financial Times Prentice Hall.
• Atrill, P., 2009. Financial Management for Decision Makers. 5^thed. London: Financial Times Prentice Hall.
• Blythman, J., 2012. Shopped: The shocking power of British supermarkets. London: HarperCollins.
• Brealey, A.R., Myers, C.S. and Allen, F., 2011. Principles of Corporate Finance. 10^thed. New York: McGraw-Hill Irwin.
• Coulter, M., 2005. Strategic Management: In Action. 3^rded. Pearson Prentice Hall.