This document includes 47 detailed pages of Distinction* graded coursework for Unit 1 – Exploring Business Assignment 1, covering: P4,P5,P6,M3,M4,D2 and D3. This assignment is on Tesco and Cancer Research UK and can be used as a guide of exactly what you need to include to achieve a Distinction in the unit, which will save you countless hours working on coursework. Breakdown of each part that is covered in this document: P4: Discuss the internal, external and competitive environment on a given organisation. P5: Select a variety of techniques to undertake a situational analysis of a given organisation. P6: Explore how the market structure and influences on supply and demand affect the pricing and output decisions for a given business. M3: Assess the effects of the business environment on a given organisation. M4: Assess how a given business has responded to changes on the market. D2: Evaluate the extent to which the business environment affects a given organisation, using a variety of situational analysis techniques. D3: Evaluate how changes in the market have impacted on a given business and how this business may react to future changes.<\/p>\n\n\n\n
Business BTEC level 3
Unit 1 – Assignment 2
Learning Aim C&D
Learning Aim C – The Business Environment
Introduction
In this document I will be compiling research about the business environment and the market that
Tesco operates in, including all the factors that affect Tesco\u2019s internal, external and competitive
environment alongside the reasons why Tesco\u2019s demand and supply might change overtime. By using
situational analysis I will be able to identify the factors and their effect on Tesco and the wider market
and apply these factors into the evaluation of Tesco\u2019s responses to market changes later on.
The internal environment: (C.P4)
In this section I will firstly describe all aspects of the internal environment and look at the environment
that TESCO operates in.
The internal environment of a business refers to the elements\/influences within the business that play
a major role in how the business operates. As these influences are internal it means that the business
will have full control over the internal environment and can change it to suit the external environment
and make the business stronger. Within the internal environment there are internal influences which
can greatly hinder or facilitate success so it is important for businesses to use the correct analysis and
situational tools to determine what their internal environment\/influences are and how they can harness
them to improve the overall business further, giving them a higher chance of success and reducing
risk when making strategic business decisions.
The 3 internal influences of Tesco:
The first internal influence is corporate culture. Corporate culture is the collective standards, beliefs
and values within a business. This will impact the way customers\/the public perceives the business
and can possibly harm reputation and getting attacked by pressure groups if the corporate culture is
deemed socially unacceptable. The corporate culture will also affect how the business communicates
with its stakeholders and how their relationship is maintained. Some examples of corporate culture
are;
\u25cf Market culture – where the business is prioritising profit over anything else which gives the
business focus to external and internal success rather than satisfaction. Some drawbacks of
this culture is that there is low employee retention because this culture is not orientated to
cover the satisfaction of employees.
\u25cf Clan culture – this is an employee focused culture, making sure that employees are involved
and made to feel valued and respected, which makes a largely collaborative structure. This
culture is not suitable for the long-term as it becomes harder to maintain as the business
grows.
\u25cf Adhocracy culture – this business culture values innovation and creativity, encouraging
employees to be creative and to think outside the box. One major disadvantage to this culture
is that it carries a lot of risk because there are so many different ideas that many will often fail.
\u25cf Hierarchy culture (organisational culture) – this is where the business is highly focused on
organisation of the internal environment which makes sure that there are clear lines of<\/p>\n\n\n\n
communication, authority and chains of commands. One drawback of this is that it leaves the
business inflexible as the structure is organised for maximum efficiency.
\u25cf Task – commonly adopted by matrix structure businesses as many departments will work
together and therefore need to adopt a \u2018team work\u2019 mindset. This makes the business as a
whole more responsive and interconnected.
\u25cf Roles – hierarchical structure where there are clear chains of commands, high supervision and
lines of authority but high bureaucracy and slow decision making because communication is
delegated down the structure then back up again and takes time to flow through each
hierarchical layer.
\u25cf Power – centralised decision making where everything is controlled and regulated by the
individuals at the top of the business
\u25cf Entrepreneurial – often seen in competitive markets and small businesses where the culture
is all about taking informed risks but pushing innovation and out-doing competitors. Risk is
high but the rewards are higher. Decentralised decision making and more people focused.
The corporate culture of Tescos is that they are very people-oriented but also structured hierarchically,
similar to the \u2018clan culture\u2019 and the \u2018roles\u2019 values. Their main values are that they strive to serve their
customers better everyday and give back to communities. To support this culture Tesco has initiated a
plan named \u2018little helps plan\u2019 which focuses on the people within Tesco and its supply chain, serving
customers the highest quality and healthy food for an affordable but fair price, giving to and supporting
communities through fundraisers and events, becoming more environmentally friendly. It is clear that
Tescos corporate culture is to strengthen the relationship between every person involved in the
business, whether it be the customers, employees or anyone involved in the supply chain. It is also
clear that their culture is focused on being more environmentally friendly and sustainable in the
long-run which may improve their reputation and strengthen public relations (PR) and possibly lead to
\u2018positive word of mouth\u2019 as society is becoming more focused on becoming environmentally friendly
and it is crucial that Tescos culture supports this as there are many environmental pressure groups
which could harm their reputation. Tesco also have clear lines of authority therefore they also fit into
the \u2018role\u2019 category. Authority is clearly established which makes it easier for employees to
communicate with managers and the managers can reward or punish the employees.
Corporate culture is very important for a wide range of reasons. One reason is that it can improve
employee motivation, productivity and retention. This is important because it means that employees
are willing to work harder and as Tesco is a retailer it means that the employees will offer a better
shopping experience to customers and their stores will be organised. It also could mean that costs are
lower as employees are retained, and human resources does not have to spend money on job
advertisements, requirements and training. And with this money Tesco can reinvest it back into their
business to fund developments or pay it to their shareholders through dividends as they are a Public
limited company and are limited by shares. Corporate culture has an impact on brand image and how
customers perceive the business. And in a highly competitive environment such as the retail industry
that Tesco operates in, it is important for them to have a good corporate culture so that customers
perceive them as good, ethical and caring which has the ability to encourage repeat purchases,
customer loyalty and an increased market share as customers are more likely to purchase from them.
The effects on decision making is that it can reduce bureaucracy and increase the level of
involvement from the business as a whole, this is because in some corporate cultures like Tescos they
are very people oriented meaning that they keep their employees valued and involved, this then
engages employees to send feedback which can be used to make business decisions.
Some features of a strong culture:
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\u25cf Collective goals between employees
\u25cf Increased productivity and motivation of employees
\u25cf Strong work ethic
\u25cf Abides by regulations and policies
\u25cf Efficient
\u25cf Structured
\u25cf Responsibilities are understood
Some features of a weak culture:
\u25cf Tasks are forced onto employees
\u25cf Employee feedback are not taken seriously
\u25cf Many conflicts
\u25cf Very top heavy where all decisions are made at the top of the business without considering the
opinions and feedback of those at the bottom of the hierarchy in a business
\u25cf Treating all operations as though they are to maximise revenue
\u25cf Very focused on profit and shareholder satisfaction only<\/p>\n\n\n\n
Another internal influence is corporate social responsibility (CSR) which is the commitments of a
business beyond legal duty (not legally compulsory) for the sole purpose of achieving societal goals.
The first step for businesses to build their CSR is to accept responsibility for how they treat their
stakeholders and their environmental effects. A Corporate Social Report is made to set targets to help
the business meet its ethical, environmental and social responsibilities, which also allows the business
to analyse and measure their progress, helping them to construct SMART objectives and other aims.
Advantages:
\u25cf Improves public relations (PR) which can change how customers perceive the business, if the
business is acting socially, ethically and environmentally responsible then more people may be
attracted to the business (potentially higher sales and profit)
\u25cf Reduction in environmental tax due to one of the main focuses of CSR is to reduce negative
environmental impact
\u25cf Better customer loyalty and increased repeat purchases
\u25cf Higher employee retention and a wider pool skills
\u25cf Employees are more motivated and productive
\u25cf CSR can be used as a Unique Selling Point (USP) which can give businesses a competitive
advantage, taking customers away from their competitors
\u25cf Positive relationships with stakeholders
Disadvantages:
\u25cf CSR focuses on employees as well so this may increase training costs, wage\/salaries and
maintenance on the work environment
\u25cf Also relates to ethicality so businesses may look for ethical suppliers but they will be more
expensive
\u25cf New staff, managers and directors to manage the CSR
\u25cf May be hard to meet short-term goals regarding shareholders as they will receive lower
dividends due to more profit being reinvested
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\u25cf Opportunity cost (benefit foregone of the next best alternative), the business could use that
capital reinvested in other areas of the business that need improving or using that time and
effort developing new products
CSR at Tesco:
Health –
\u25cf Corporate partners with many charities
including Cancer Research UK
\u25cf Aiming to cut sugar contents of UK soft
drinks by 5% each year
\u25cf Offering free fruit to children in UK stores
\u25cf Tesco has raised nearly \u00a314 million for
their National Charity Partnership
Environment –
\u25cf Tesco was the first UK retailer to join the
Sustainable Agriculture Initiative (SAI)
which actively supports the sustainability
and innovation of agriculture
\u25cf Using fair trade so farmers are paid a fair
amount for their products
\u25cf Actively reducing plastic waste and
carbon emissions
Human rights –
\u25cf Social programmes that support nearly
450,000 people
\u25cf Tesco have won many awards for their
efforts of human and labour rights
\u25cf 42 local based sourcing specialists
worldwide
Food Waste –
\u25cf In 2017 Tesco had the commitment to not
let any food that was safe to eat to be
wasted from UK stores, instead this food
would be donated to food banks.
\u25cf Food surpluses also given to various
charities
\u25cf Tesco are the only UK supermarket
retailer to release data on food waste
Business ethics –
\u25cf Adapted their Code of Business Conduct
\u25cf Refreshing training programmes
\u25cf encouraging diversity and creativity
within the workplace
Supplier relationships –
\u25cf In 2008 Tesco was exposed to be
underpaying and not paying their
suppliers and since then they have
strived to improve the relationship and
trust, they have done this by ensuring
that they pay suppliers on time and in full
amount but have also launched supplier
networks to hear any feedback and
suggestions from their suppliers
\u25cf Made a supplier helpline
\u25cf Constantly trying to improve the
relationship and trust
It is clear that Tesco invests a lot of time, effort and money into CSR because they support a wide
range of charities and have developed many targets such as making their packaging fully recyclable
and compostable by 2025, clearly showing that they are focused on reducing the environmental
impact from their operations. Their CSR have improved public relations and have greatly increased
their reputation and have persuaded many to start shopping with Tesco because it gives them a
competitive advantage, Tesco have received countless awards for their CSR efforts.
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