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For all types of organizations in the market like public, private, non profit organizations etc, the business environment can contribute a long term success for the organization. Analyzing and monitoring the business environment has become very crucial for achieving the objectives of the organizations as it can influence the business operations both positively and negatively. Business environment of an organization comprises the internal and external factors which can influence its business operations and functioning including that of its stake holders (Wetherly, & Otter, 2014).
This paper speaks about the relevance of the business environment for an organization by considering an organization Tesco for the purpose of analysis. Tesco is a multinational public limited company which is based on UK, London. This organization is one among the largest retailer or the super market chain in UK which deals with grocery and general merchandise. Tesco operates as the supermarket, hypermarket, super stores etc throughout the world and it stood in the third position among the worldwide retailers in making profit. Some of its major operations include Tesco express, metro, one time shopping etc which has gained huge customer attraction and generated a dominant position in the market. The organization Tesco provided importance to customer preferences and customer satisfaction. This made them to provide innovative and differentiated products which are required by their target customers. They provide value to their stake holders through proper stake holder engagement programs. The purpose, aim, objectives, economic systems etc of Tesco are analyzed and discussed detail in this report.
An organization which is operating in a market will possess its own purposes, aims, objectives, vision, mission etc. There are various types of organizations operating in the world, the purposes of these organizations are identified and are mentioned below
The aim, strategic objectives, mission etc of the organization Tesco PLC is compared with that of the aims, objectives, mission etc of the similar organization ASDA. ASDA is also a largest retailer UK which operates as a supermarket and possesses a dominant position in the market. A comparison is performed on three two organization and the outcome is mentioned below in a tabular form.
Create value for the customers and to obtain life time loyalty
Exceeding the needs of the customers and to become a best retailer throughout the world
To achieve customer loyalty, organizational growth throughout the world and to gain huge revenue
Providing affordable product and services to the customers and to achieve competitive advantage and to make revenue
The purpose, aim and objectives of the organizations may vary from organization to organization which is clearly highlighted above.
Stake holders are the individual or group of individuals who are directly or indirectly influenced by the operations of the business and vice versa. The extent to which the organization Tesco meets the objectives of its stake holders are mentioned below.
Hence it is evident that meeting the objectives and aims of the stake holders can bring benefits to organizations
Some of the responsibilities of the organization Tesco and the strategies that the organization adopted to meet those responsibilities are mentioned below
Understanding responsibilities and meeting the objectives of the stake holders can contribute a long term stake holder relationship for the organization like Tesco which can gain success for the organization.
The market structures are having a vital role in determining the pricing and the production decisions of the organizations. The market structure constitutes the number of organizations in the market which produces similar products and services. Some of the market structures include monopolistic, oligopolistic and perfect competition market structures.
In monopolistic market structure there will be one or two companies providing specific product or services. Under this structure these companies can fix price and production as per their interest. In oligopolistic market structure competitive pricing system is followed and a low pricing is fixed as per the customer demand. In a perfect competition market there will be high degree of competition as there is more number of companies operating in the same industry (Carraro, 2013).
The organization Tesco has many competitors which is dominant in the market and hence it fall under the perfect competition market structure. Some of the ways through which this market structure determines the pricing and production of Tesco is mentioned below. Here the organization Tesco itself is the price taker. It charges its products based on the costs incurred in production, marketing principles, etc. This market structure doesn’t provide any control over the pricing as there are many organizations. Tesco will have to keep a competitive price and should add value to its pricing strategy through perceiving the customers. Here the production decisions are based on the customer demand. In a perfect competition market the value for customer demand will be high.
Market forces are the forces or the economic factors which can influence the availability or resources and the demand for that product. The market forces can influence the decision making process of the organizations like Tesco. Some of the market forces include supply and demand, elasticity of demand and supply, perceptions and actions of customers, economics of scale, and cost and output decisions. Some of the ways through which these market forces influences Tesco and its response towards these market forces are discussed (Ryan, 2013).
Apart from these factors the cultural environment also influence and shapes the organization behaviour of Tesco. The population of UK are very trendy, early adapters and has a busy schedule. Hence Tesco has to adopt the strategies through which it can meet these requirements. The one time shopping facility and the online shopping facility of Tesco contributes to the cultural adaption.
International trading constitutes the exchange of the products and services between different countries across the world. International trade plays a significant role in the UK business organizations through providing comparative advantage. International trading has benefitted the organizations of UK through the better utilization of the resources, importing the resources or products which are not available, meeting the customer demands and needs (Yarbrough, & Yarbrough, 2014).
For example:Tesco being a leading retailer in UK could exhibit many imported products and services to its customers as per their demands. Through this Tesco provide accessibility to any products and services for the customers which made them loyal and committed towards Tesco. International trading also supported the operation of its worldwide branches without any barrier.
The impact of the global factors over the UK organizations can be analyzed through PEST analysis.
The European Union has introduced some policies which are supposed to be followed by the organizations of UK. Some of the policies introduced by the European Union include employment policy, taxation policy, inflation policy etc. These policies are introduced by EU to ensure smooth business operations management for the organizations in UK and to eliminate any unethical or business misconduct (Smith, 2013).
The business organizations in UK should follow these policies; any violation in this may cause legal actions against the organization. For example the employment policy of EU specifies equal employment opportunities to all individuals who are eligible for the job. Through registering with the EU the organization Tesco could export and import the goods and services withour paying extra money.
Business environment is the major component of the organization which can influence the business operations. This paper describes various aspects of business environment by considering Tesco PLC as an example. Various types of organization are identified and their purposes are discussed. The vision, mission, aims and objectives of Tesco and ASDA are compared and discussed. The responsibility of Tesco towards its stake holders is discussed. The nature of UK economic sytem, macro economic sytem is discussed and their impacts over Tesco are analyzed. The business and cultural environment of the organizations are discussed. The role of EU and its impact over the business organizations are also discussed.
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