A1026_Sabbir_MGTF

7/23/2019 A1026_Sabbir_MGTF

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BUSINESS ENVIRONMENT

Submitted By: Brnha

Submitted To: Leops


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TABLE OF CONTENTS

Introduction................................................................................................................................ 3

2. LO1 Understand theorganisational purposes ofbusinesses.......................................................................4

2.1purposes of different types of organisation !1.1"............................................................................4

2.2 #$tent to %hich Tesco !lc meets the ob&ecti'es of different sta(eholders ! 1.2" .....................................5

2.) *arious responsibilities of Tesco !lc as an organisation and the strategies it employs to meet the ob&ecti'es of

the sta(eholders !1.)"................................................................................................................6

). +ature of the national en'ironment in %hich business operates LO2"......................................................9

).1 ,o% different economic systems attempt to allocate resources effecti'ely ! 2.1"...................................9

).2 Impact of -iscal and monetary policy on the acti'ities of Tesco !L ! 2.2". .......................................10

).) Impact of competition policy and other regulatory mechanisms on the acti'ities of Tesco !lc ! 2.)".........11

).).1 Impact of competition policy O+ T,# /TI*ITI#S O- T#SO !L ........................................11

).).2 Impact of regulatory mechanisms on the acti'ities of Tesco !lc..................................................12

0. Understand the beha'iour of the organiations in their mar(et en'ironment LO)".....................................13

0.1 e$plain ho% mar(et structures determine the pricing and output decisions of T#sco plc ! ).1"...............13

0.2 ,o% mar(et forces shape Tesco !L U responses using a range of e$amples ! ).2". ..........................14

0.) #$plain ho% the business and cultural en'ironments shape the beha'iour of Tesco !L U ! ).)"...........15

3. Significance of the global factors that shape national business acti'ities LO0".........................................16

3.1 SI4+I-I/+#of international trade to Tescos !L U ! 0.1"....................................................16

3.2impact of global factors on Tescos !L U ! 0.2"........................................................................16

3.) impact of polciies of the #uropean Union on Tescos !L U ! 0.)" ..................................................17

5. onclusions and 6ecommendations..............................................................................................18

7. 6eference..............................................................................................................................19

8. Bibliography..........................................................................................................................21


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INTRODUCTION

In this report9 different organiations purpose and responsibility %ill be discussed specifically the

purposes of Tesco !L that is an U based public limited company. There are differentsta(eholders of Tesco so the responsibilities and strategies of Tesco !L %ill be sho%n to meet

the ob&ecti'es of these sta(eholders. On the other hand9 national en'ironment of U %ill be

sho%n to find out ho% different national factors affect the acti'ities of Tesco !L. /long %ith

the national factors ho% global factors affect the business strategies of Tesco %ill be analysed. /t

the end of the report it %ill be discussed ho% Tesco is affected by the #U regulations among the

member countries.


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2. LO1 UNDERSTAND TEORGANISATIONAL PURPOSES OFBUSINESSES

2.1 !U6!OS#S O- I--#6#+T T;!#S O- O64/+IS/TIO+ !1.1"

ifferent types of organiations ha'e their o%n business policies9 structure9 and strategies and so

are their purposes. So9 %hate'er the business organiations there must be some specific purposes

for %hich the organiation %as established +ordhaus9 2s purpose is to raise the fund through the capital mar(et %ith distributing the

o%nership among the stoc( holders 6adebaugh9 et al.9 2s: Aonald>s is the %orld>slargest fast food company that is considered

under the franchising organiation. ,ere e'ery one can ta(e the franchise from theorganiation through a standard agreement and contract %ith the A onald>s. A

onald>s gi'e the opportunity to thelocalbusiness person to use the product idea and brand

name of the company. ,ere9 A onald>s get commissions and do not ta(e any ris( from

the local mar(et. The purpose of the franchising is to minimie the ris( and cost of being

global.


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d" +ational ,ealth ser'ices +,S" U: +,S is a publicly funded nonprofit company

established in U to pro'ide free health ser'ices for the citien of the country. This is a

nonprofit public company established in the purposes of pro'iding free ser'ices. So9 there

are no strict rules of ma(ing profit and the organiation is operated by the go'ernment fund

6adebaugh9 et al.9 2


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#mployees: Tesco has more than 3)79


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statements Burnes9 2s purposes are gi'en priority.

To ensure the ethical issues9 Tesco ma(es the decisions %ith eFuity9 fairness and impartiality

respecting the rights of indi'iduals Aartins and Terblanche9 2


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But in the long run9 discretionary responsibilities of the organiation ha'e an effect on the brand

image of the organiation Scaner9 et al.9 2


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3. NATURE OF THE NATIONAL ENVIRONMENT IN WHICH BUSINESS

OPERATES (LO2)

).1 ,OD I--#6#+T #O+OAI S;ST#AS /TT#A!T TO /LLO/T#6#SOU6#S #--#TI*#L; ! 2.1"

There are different economic systems follo%ed by the go'ernment. These economic systems are

normally introduced to allocate the resources more efficiently that are sho%n in the follo%ing?

Comman o! "#ann$ $%onom&' In a command or planned economic system9

go'ernment controls the full economy allocating the scarce resources li(e soil9 capital9

labour etc. ,ere9 the planning body or the go'ernment has the full information and can

ta(e better decisions for the resource allocation but this economic system normally

cannot allocate the resources efficiently. This is because the planning body does not ha'e

the full (no%ledge or efficiency to decide ho% much should be produced. In such (ind of

economic system there are al%ays shortage or surplus of the inputs %here a company li(e

Tesco faces difficulties to operate the business acti'ities properly #dgar9 1==2". F!$$ $n$!"!*$ $%onom% *&*$m'In the free enterprise economic system all the

organiations can operate the business acti'ities %ith little go'ernment inter'ention.

,ere9 the go'ernment has 'ery small number of companies in the mar(et and rules and

regulations are fle$ible to operate the business acti'ities. -or this reasons there %or(s a

strong positi'e competition in the mar(et that leads a strong efficient resource allocation.

/s go'ernment does not inter'ene in the mar(et company li(e Tesco can produce the

products %hat they really %ant considering the demand of the mar(et @ohn and @ames9

1==2". M+$ E%onom% S&*$m'/ mi$ed economic system is li(e the free enterprise economic

system but here the go'ernment has a little bit inter'ention %ith different policies li(e

monetary and fiscal policies. The mi$ed economic system is sho%n in the follo%ing

figure?


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-igure: Ai$ed economic system

Source: enison E aniel9 1==


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On the other hand9 If Interest rate reduces then Tesco %ill be able to get more financing at

lo%er cost. This %ill help Tesco operate the business acti'ities. hanges in the reser'e reFuirements: if monetary policy changes the reser'e reFuirement

then it %ill also ha'e an impact on the o'erall business acti'ities. ,igh reser'e

reFuirement %ill push the interest rate high that %ill influence the consumers to deposit

more rather than consumption. So Tesco has to change the business acti'ities as its sales

'olume %ill reduce Stoudmann9 et al.9 2


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organiation changes the policy to stay in the competiti'e position then Tesco has to change the

business policy. Tesco normally made competition policy considering the cost and product

di'ersification.

).).2 IA!/T O- 6#4UL/TO6; A#,/+ISAS O+ T,# /TI*ITI#S O-

T#SO !L

U go'ernment ma(es different regulatory policies that ha'e a direct impact on the acti'ities of

Tesco !L and these impacts may be both positi'e and negati'e considering the type of the

mechanism Tescoplc9 2


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,. UNDERSTAND THE BEHAVIOUR OF THE ORGANI-ATIONS IN THEIR

MARET ENVIRONMENT (LO3).

0.1 #C!L/I+ ,OD A/6#T ST6UTU6#S #T#6AI+# T,# !6II+4 /+OUT!UT #ISIO+S O- T#SO !L ! ).1".

There are different mar(et structure li(e Aonopoly9 oligopoly and perfectly competiti'e mar(et.

In different mar(et the company has to ma(e different strategies to determine the output and

price of the company>s product.

Aonopoly mar(et structure: %hen there are one or t%o company operating in the mar(et

is called the monopoly. In this mar(et structure company normally impose the price %hat

they really %ants to ma$imie the profit and does not care about %hat the customers are

%illing to pay for the products 4itmanE Acaniel9 2


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This is ho% in a perfect competition mar(et9 Tesco ma(es the pricing strategy considering

different %ays. So9 Tesco normally focus on the demand of the products and the price is

determined considering the customers> %illingness to pay and the competiti'e position of the

price Burnes9 2 perception and actions: Tesco considers %hat the perception of the customers

is and %hat actions customers ta(e before buying the products. If customers are highly

sensiti'e to the price change and they emphasie on the product Fuality then Tesco finds

the %ay of increasing the product Fuality (eeping the price le'el under the control

Scaner9 et al.9 2


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/n organiation has to consider the business and cultural en'ironment before ma(ing any

decision as these en'ironmental factors ha'e a direct impact on the business organiation Slac(9

et al.9 2


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/. SIGNIFICANCE OF THE GLOBAL FACTORS THAT SHAPE NATIONAL

BUSINESS ACTIVITIES (LO,)

3.1 SI4+I-I/+# O- I+T#6+/TIO+/L T6/# TO T#SOS !L U ! 0.1"

Because of the modern production techniFues9 ad'anced transnational corporations and better

transportation system International trade has flourished in the recent years. Through the

international trade system9 any company li(e Tesco !L can operate in other countries %ith no

or little barriers ,eier and 6ender9 2


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that ha'e a direct impact on the organiation ,eier and 6ender9 2


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-rom the report and analysis of different issues it is found that an organiation has to consider

different internal and e$ternal factors 'ery carefully as these factors ha'e a direct or indirect

impact on the business acti'ities. ,ere Tesco !L is a !ublic limited company operating the

business acti'ities meeting all the ob&ecti'es of the sta(eholders more effecti'ely. Tesco !L has

successfully met all the responsibilities to the sta(eholders through different strategies li(e Better

customer ser'ices9 employment policies9 and ma(ing the information a'ailable to all the parties.

The super mar(et industry in U is acti'ely perfecti'ely competiti'e %here Tesco !L has to

ad&ust the policies considering the other competitors> policies and other economic factors li(e

-iscal or monetary policies. On the other hand9 it is found that Tesco is operating business in the

perfect competition mar(et structure %here the company consider the demand of the customers

and their %illingness for the pricing strategy. Besides that9 Tesco !L is operating in U so the

company should follo% the regulations of #U along %ith the U go'ernment regulations. /s

Super mar(et or retail industry is getting more competiti'e Tesco should focus more on the price

and product di'ersification considering all the international and local factors.

1. REFERENCE


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+ordhaus9 .9 2


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. BIBLIOGRAPH

aniels9 @.9 6adebaugh9 L.9 Sulli'an9 . 2

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