Unit 1 Micro and Macro Factors Business Assignment
Diploma in Business
Unit Number and Title
Unit 1 micro and macro factors Business Assignment
In this Unit 1 micro macro factors Business Assignment, the business environment is being discussed about that will be examining various types of organizations that will include the profit as well as not-for-profit organizations, their size as well as scope that includes micro, sme, transnational as well as international and the ways by which they are functioning. There will also be more exploration of the relationships that the organizations are having with the different stakeholders and in what ways the broad external environment will be impacting as well as shaping the decision making of the business.
B) various organizational functions and explain how these connect to the organization’s objectives and structures.
In this respect, the private organization named tesco plc has been selected and the various organizational functions that needs to get considered here are design and production, finance, human resources, sales and marketing, administration, research and development.
Design and production
- Obtaining resources for producing goods pr providing services
- Organization of the resources for producing the goods or for providing the services in the most proper manner
- The resources that are required for the production of the goods pr providing the services
- Organization of the resources for achieving the aims in the most cost-effective manner
- Monitoring as well as controlling of resources for achieving the desired outcome.
- Preparation of accounts
- Payment of wages as well as salaries
- Acquiring capitals as well as resources
- Allocation of budgets (mcdaniel, 2011)
- Recruiting, retaining as well as dismissing employees
- To train, develop as well as promote employees
- To monitor as well as maintain better conditions to work
- Connecting with trade unions
Sales and marketing
- Doing market research viz., primary research as well as secondary research
- Considering the marketing mix that involves the 4ps which are product, price, place and promotion.
- Doing sales promotion through advertising campaigns (mcdaniel, 2011)
- Doing the clerical work that is associated with handling of mails, record keeping, document production, to organize meetings and to deal with enquiries
- Regarding security
- Regarding health and safety
- Regarding it and software
- Regarding cleaning as well as maintenance (palmer, 2011)
The organizational objective of tesco is providing customers with great value at prices that are considered competitive, having communication with as well as meeting the customer’s requirements, developing the talents of the staffs as well as rewarding them in a fair manner, working with the suppliers for maintaining better quality as well as low prices, having an involvement regarding the national discussion in respect of food safety as well as issues related with production, supporting the communities in which it participates as well as making a profit. (palmer, 2011) the aspiration of tesco is being an international organization having local impact that is considered positive, winning everyone’s trust with whom the organization is dealing. The connection between the organizational objectives as well as organizational functions for tesco can be elucidated with the fact that for the attainment of all the organizational objectives for the company there is a need for smooth functioning of each and every organizational function of the organization, and this integration will help the company to increase its effectiveness and expand its market share globally. (lind, 2014)
The organizational structure of tesco is very much hierarchical that reflects its large business size. Also in the store levels, there are as many as four management layers in certain large stores. To be more specific, the organization is following the tall hierarchical structure since, it is a large organization having various hierarchical layers. The beneficial aspects of having this structure are mostly associated with coordination as well as effectiveness. The staffs have a clear knowledge of their role and are having the knowledge of their needs as well as their responsibilities. This hierarchical structure permits the organizational management to function in a smooth way. The connection between organizational structure and function for tesco can be elucidated with the fact that in respect of the efficient and systematic functioning of tesco a planned structure is needed that will be fitting the style, size as well as organizational function of the company. (palmer, 2011)therefore, the setting of the business strategy structure takes place around the company’s organizational functions and this way functional aspects as well as structural aspects are impacting one another.
A) develop an in-depth understanding of the impact of the macro environment.
Pestle analysis for tesco
- Political (p) – as because the retailing organizing is functioning globally, international political factors hugely affects tesco’s performance. These take into consideration rates of taxes, legislation acts as well as the country’s stability where the company is functioning. Because of the continuing instability in the financial environment globally, various governments are encouraging the retailers for creating jobs in respect of the local population. Since, tesco is playing its role towards the creation of opportunities for employability skills, it is also, consecutively increasing the product demands as well as workforce diversification.
- Economical (e) – the economic factors are mainly associated with leverage costs, demand, profits as well as prices. As a result, the organization should have the awareness of various policy changes like changes in taxation or other factors that will be affecting the financial accessibility. It is worth mentioning here that, even though there is a global growth in the business, the organization is still having a lot of dependency on the uk market where the company’s market share is almost 30%. Having said that, it can be stated that two essential strategic aspects that the organization is pursuing for several years are associated with internationalization as well as diversification and are considered to be the main basis for achieving success by the organization. (mcdonald, 2012) moreover, because of declining disposable levels of income as well as incomes of households, tesco will be shifting most of its concentration in respect of advertisement of its value brands in comparison to the more luxurious products.
- Social (s) – because of different social changing aspects, trends are indicating that uk customers have shifted to bulk purchasing as well as one-stop shopping. Hence, there has been an increase in the quantity of non-food products that are provided in respect of sale. The type of products as well as services that the consumers are demanding is majorly affected by the customer’s beliefs as well as attitudes which are consequently influencing social conditioning. Since, customers are having more awareness regarding issues related with health, the reason being that their approach in respect of food is having a constant change, tesco is familiarizing itself with this changing aspects through the accommodation of the demand in respect of organic products. (mcdonald, 2012)
- Technological (t) – the technological advancement gave rise to different new scopes in respect of tesco. One of them takes into consideration the aspect of developing as well as introducing online shopping having home delivery facilities. Another aspect states that self-service check points are providing ease as well as customer straightforwardness that will consequently do the reduction of costs associated with labor. Moreover, there has been a significant investment by tesco regarding projects associated with energy efficiency for fulfilling its goals for longer periods in respect of reducing its carbon-footprint. (lind, 2014)
- Legal (l) – policies of the government as well as legislations are also influencing tesco’s performance in a direct manner. For facilitating these policies, tesco is offering its customers reduction in prices in respect of the fuel they are purchasing in accord to the value the customer’s are spending in respect of their grocery stores. Moreover, there are different promotional offers when there occurs lowering of the prices.
- Environmental (e) – having a growing pressure on the organizations for addressing factors related to the environment as well as adopting functional ways that will be benefitting the society, tesco is having clear commitment in respect of reducing the carbon footprint of the organization by 50% within 2020. Moreover, tesco is doing the minimization of the production of waste in their stores through the increase in the customer’s social principles. (mcdaniel, 2011)
Swot analysis for tesco
- Strengths (s) – tesco is considered to be uk’s biggest retailer having a grocery market share of approx. 30%. The two closest competitors of tesco are sainsbury and asda having 16.6% as well as 16.4% market share respectively. To possess the largest share of market is considered to be a significant strength irrespective of the industry allowing tesco in the generation of its extensive revenues. The organization is utilizing the online sales channel having a high efficiency level. Tesco was among the first uk retailers that did successful implementation of online sales channel and in the current scenario, the generation of revenues with the help of online sales is accounting for a solid share of the total revenue. The online sales growth ahead of the market in spite of the hasty fall of total sales can be analyzed as a high efficiency level use regarding online channel for sales. The organization is having a strong property portfolio that is increasing its total worth. There are around 8000 tesco shops throughout the globe and 53% of the total retail price is owned by the organization. In addition to this, because of the company’s strong property portfolio, tesco is having the alternative to achieve financial resources for dealing with urgent situations. (mccalman, 2015)
- Weaknesses (w) - tesco faced a statutory loss in 2015 and the amount was around 6.4 billion gbp pushing its net debt amount to almost 8.5 billion gbp. In addition to that, the organizations overall leverage debt has reached an amount of gbp 22 billion. There occurred a scandal that was associated with the issues related with accounting mis-declaration that took into consideration an overstatement of commercial income by gbp 208 million as well as supplier mistreatment cases. This resulted in creating a significant damage to the brand image of tesco that resulted in the resignation of the then ceo. The organization still requires some time in regaining the trust of the stakeholders post this shocking occurrence.
- Opportunities (o) – tesco is trying to expand its global market by pursuing expansion strategy associated with the international market. The organization is having a growing presence in the financial service industry. Tesco is also having a growth in the range associated with non-food retail and there is a scope to enhance the efficiency associated with the strategic aspect in respect of marketing. (lind, 2014)
- Threats (t) – there are the incapability of the new leadership for turning the business around, as well as the incapability for sustaining cost leadership competitive advantage that is considered to be a significant threat for the organization. Moreover, variations in currencies are also considered as a major threat in respect of tesco and last but not the least, surfacing of new crisis situations in relation to ethics are also considered to be s significant threat for the organization.
B) reflective statement on the impact of the micro and macro factors
Micro environment factors
- Suppliers – i believe that suppliers are having the ability for controlling business success when they are holding the power. The suppliers are having the ability for holding the power when they are the biggest product supplier. The purchaser is not considered to be of much significance to the business of the supplier.
- Resellers – the resellers, i believe, will be impacting the success related to marketing when the organizational behaviour will be taken to the market by the third party resellers or in other words, the intermediaries of the market like the retailers, wholesalers and so on.
- Customers – the various types of the customers and the reasons associated with them in purchasing the products, i believe, will be playing a significant part in showcasing the various aspects by which tesco is approaching the customers to market their products as well as services. (dwyer, 2012)
- Competition – in this regard, i feel that the organization needs to take into consideration certain aspects such as price as well as product differentiation and how is that influencing the organization and in what ways can tesco influence this for reaping the best possible outcomes.
- General public – i believe that it is the duty of tesco towards satisfying the public, therefore, any organizational activity must be taken into consideration from the general public’s point of view and in what ways they are getting influenced. According to me, the general public is having the ability in assisting the organization in reaching the organizational objectives. (lancaster, 2010)
Macro environment factors
- Demographic forces – i believe that various segments of the market are normally influenced by common demographic forces that include country, age, ethnicity, level of education, lifestyles of households, as well as cultural traits.
- Economic factors – the economic environment, i feel can influence the production of the organization as well as decision making process of the customers. (daft, 2015)
- Natural forces – the renewing ability of the earth in respect of its natural resources like the forests, agricultural products, marine products and so on are considered in this respect and also according to me the various natural non-renewable resources might also be impacting the production of the organization.
- Technological factors – i believe that the application of the skills to the production as well as technologies as well as substances required for producing the products as well as services will also be impacting the smooth business functioning.
- Political or legal forces – effective decisions related to marketing, i feel should always consider the developments associated with the political as well as legal aspects in relation to tesco as well as its market. (daft, 2015)
- Social and cultural forces – i believe that the impact of the product as well as services that tesco is bringing to the market is having on the society should be taken into consideration.
This assignment is associated with the business environment in which the various organizational functions are being explained and in what ways are these related to the objectives of the organization as well as structural aspects. Along with this, the application of the analysis models such as pestle as well as swot has been described for developing an in-depth understanding of the influence of the macro-environment and justifying the ways by which these are influencing the decision making process of the organization and lastly, an evaluation has been made in respect of the influence of the micro and macro factors regarding decisions being made for meeting the objectives of the business.
Daft, r (2015). Organization theory and design. Cengage learning.
Lancaster, g (2010). Essentials of marketing management. Taylor & francis.
Lind, p. (2014). Monitoring business performance. Routledge
Mccalman, j. (2015). Change management: a guide to effective implementation. Sage.
Mcdaniel, c. (2011). Essentials of marketing. Cengage learning.
Mcdonald, m. (2012). Market segmentation. John wiley & sons.
Palmer, a (2011). The business environment. Mcgraw-hill higher education.