Unit 1: Exploring Business - Assignment 2 PDF

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Assignment 2- Unit 1: Exploring Business. Distinction* Standard work with Images. A very well Constructed piece and very well-formatted. This Assignment contains P4, P5, P6, M3, M4,D2, D3.
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Unit 1: Exploring Business- Assignment 2   Learning Aim:    C: Explore the environment in which businesses operate   D: Examine business markets  Assessment Title: The Effects of the Environment on a Business operate

C.P4 – Discuss the Internal, External and Competitive Environment on a Given Business. I will research a Public Limited Company; I will examine and address the internal external and competitive environment. I will include a study that discusses these environmental factors in a company and how the company reacts.

Tesco PLC

Tesco is a PLC Limited Public Company and is the leading brand in the grocery chain supermarket and merchandising. It is in 12 countries such as Ireland and Thailand. The company was founded in 1919. The business grew massively and had over 100 shops throughout the country within the next decade. Tesco currently has a £ 14.3bn market capitalization as of 2019. Tesco PLC is the 26th largest corporation, the 77th largest corporation in terms of its sales and the 632nd largest in the world.

External Environment External environment has multiple factors on companies and does have a impact. PESTLE Analysis is used to determine when and why they will succeed • Political: for example. Tax policies, restrictions on trade, tariffs • Economic: for example. Economy, interest rates, economic growth, rate of inflation • Social: for example. Age distribution, language, education, demographic patterns 1

• Technological: e.g. Research and development, the advancement of engineering • Legal: e.g. Health and safety, laws, regulations for consumers • Environment: e.g. Recycling, laws, environmental protection, waste Political Tesco has highly influenced political and legislative circumstances set on its Quality in its globalised environment with stores around the world. Tax Plan was introduced by the government in the UK which had an impact on Tesco. The Thailand government increased the VAT from 17.5% to 20%. This increased Tesco’s Cost of sales and affected Tesco a lot. This led to a decrease in revenue and profits for Tesco. UK Government introduces Fat Tax which effected Tesco. The Fat Tax was introduced to lower obesity on certain products. However, Tesco did introduce Healthy Food Section afterwards in the late 2014 Economic Economic factors do have concern to Tesco PLC, as these are to influence the following: Product    

Cost Demand for Goods Employment Pricing Overall Profits

The economic factors are not in the control of the company and can have unfavorable effects. However, even if Tesco is predicted to grow bigger and bigger in the UK Food market any downturn on the food will have Tesco to be affected by it. Tesco is without a doubt growing significantly. There is an increasing rate of unemployment with economic recession. Due to this, many people have minimum wages or even access to disposable income. Hence why Tesco is offering food at lower price at lower quality which ends up decreasing company's overall profits. the decrease in the workforce is ultimately hurting the profits and lowering the numbers of dividends that shareholders receive. Social Demographic always changes such as ageing population and reduction in home cooking made United Kingdom retailers concentrate on products and services which contained added value Tesco introduced online shopping to focus on elderly and people with mobility issue. Tesco has gotten very successful doing this. Social changes have therefore led to trends that have indicated that UK customers having move forward to bulk shopping or one-time grocery shopping. Therefore, this has led Tesco put an increase in non-food items in sale in stores as well as the online store platform. 2

Technological Technology has a major factor on many developments of products and services which Tesco offers. Technology helps Tesco reach its potential by offering customer service through online and reaching out to customers on long distant areas. The following Tech are not being used by Tesco:

   

Intelligent Scales Electronic Shelf Labelling Self-Checkout achiness Wireless Connection

Legal Laws and Policies have impacted results and the UK government is changing Common Agriculture Policy which is a terrific example of this impact on agriculture products. The government does want to examine how to deliver subsidies to farmers therefore, these initiatives may result in lower subsidies which influence the farmers. This, therefore, can cause Tesco fines if breached. Tesco PLC is engaged outside grocery stores in financial service services such as credit cards, loans and mortgages. The Prudential Regulatory Authority wants to ease the negative effects of disruption on the continuity of financial. Environmental Environmental issues have been one of the major societies-based issues that threaten food retailers, a key area to address this is for companies to act in a socially responsible manner. Tesco's corporate social responsibility includes the aspects in which a corporate social responsibility. Organization exceeds the minimum obligations imposed by regulations governance on stakeholders. The government intends to launch a new strategy to reduce waste, reduce resource consumption and mitigate damage to the environment. A new-found tax on extremely processed and full of fat foods was imposed by the current legislation, this affected the subsequently modified Tesco brand lines, impacting both manufacturers and consumers ' relationships. SWOT Analysis SWOT Analysis is a structured planning method, evaluating four key elements of a business: strengths: business attributes that give an benefit over other businesses Weaknesses: business attributes that put a business at a weakness Opportunities: Environmental elements that could take advantage of Advantages 3

Threats: Environmental elements that could cause problems for the business A SWOT Analysis involves an Organization's goals and objectives and classifying internal factors and external factors that are either advantageous or harmful to the Organization's main aim and objectives. Strengths Tesco is the leading market of grocery which offers a value of money like their motto “Every little Help.” Tesco has 7,000 stores worldwide. It has also opened subsidiaries such as Tesco Extra, Tesco Local and Tesco Express. Tesco uses loyalty cards to help maintain customer loyalty Weakness Tesco experience in some of the market they entered such as own branded smart devices. A lot of cash is needed to be invested in web tech and IT. Therefore, this can affect sales from Teso PLC. Debts has also affected Tesco as the utilising of the credit cards as well as high insurance claims from households. Opportunities Many opportunities for Tesco as it can expand In the digital entertainment. It can invest in Blink Box and have 80% of its ownership and it can aim foreign markets where the product is the most viable. Online shopping offers customers flexibility. This is by expanding sectors operations. Families which have financial struggles or maybe too busy to cook can be accommodated by Tesco's value depending on their needs. Overseas expansion such as Australia will offer an increase in profits Threats Tesco PLC has a lot of market threats, clearly for being an obvious target for other bigger consumer food grocery supermarket chains like Aldi, Waitrose and so on. One threat Tesco tries to struggle is Walmart's purchase of Asda. In the UK, branding for shops like Asda Walmart has increased, reflecting a weakening of customer dislike for Walmart. Walmart, being the ninth most respected organisation in the world, is the leading global competitor of Tesco and therefore has the necessary abilities, resources and funds to cause problems for Tesco. Conclusion SWOT Analysis helps the organisation to find the opportunities and threats they then find a way to enhance probability after doing this. Once the threats are detected, they are analysed. However, the assessments do change the time. Tesco is constantly developing experiencing flexibility to optimise success with failures kept to a minimum possibility Tesco PLC tailors their resources to potential market opportunities to improve their financial plans further, allowing specific targets and priorities to be set. Tesco PLC is well secure for its 4

future through the philosophy of proactive planning and economic understanding, as it has a diversified market strategy that accommodates a growing number of consumers in digital era. C.P5- Select a variety of techniques to undertake a situational analysis of a given organisation

Situation Analysis of businesses In this task, I will report the reasons for the success of Tesco PLC. I will explain the Organisational Structure, as well as the Relationship and Communication between External and Internal Stakeholders, will support the Organizations in helping them achieve their goals and goals, thereby making them successful. Porter’s 5 Forces of Competition Porters 5 Competitive Forces is for determining and analysing competitive strengths. The System of the Porters 5 Forces is a tool to evaluate a company's competition. It extracts five distinct factors that assist in calculating competitive strength, thereby providing an industry's attractiveness concerning its overall profitability. Sometimes, Strategic Analysts use Porter's 5 Forces of Competition to recognize and provide themselves with an complete image of a business location that defines the possible future profitability of specific products and services. The theory can also be used to identify areas of strength and help avoid errors. Porter’s Five forces of competition include The Supplier's Power: This is an assessment of how simple it is for suppliers to push up prices. This is driven by factors including the number of suppliers, the uniqueness of supplier-derived products, the relative size and strength of suppliers, and the cost of switching suppliers. The Power of the Buyer: This is an examination of how convenient it is for consumers to drive down prices. This is led by a few factors including the number of buyers on the market, importance to the organisation of each buyer and the cost to the buyer especially from switching suppliers. Competitive rivalry: The key driver in the market's number and skill of competitors. Some rivals that sell undifferentiated goods and services would reduce the attractiveness of the market. A threat if substitution: Where there are similar replacement goods on a market, the risk of consumers moving to substitutes in response to price increases is increased. It reduces both suppliers ' strength and business attractiveness.

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New entry threat: competitive markets attract new entrants. If appointees have powerful entry barriers, such as patents, economies of scale etc. Otherwise profitability will be decreased to a competitive rate. Porter's 5 C's Include: Company: The analysis of the company usually involves the overall assessment of all the goals, strategies and capabilities of the company. These indicate the strengths and weaknesses of the business model to an organisation, showing exactly where improvements are needed, what should be kept the same and how well an organisation fits the external environment. Collaborators: Analysis of collaborators is useful for companies as it evaluates the likelihood that they will increase the creation of ideas as well as the likelihood that more business opportunities will be gained. Agencies, manufacturers, retailers, wholesalers and associations are among the collaborators. Customers: Description of customers in approach can be abstract. It's extremely long and complicated, but it's an essential part of the Five Cs of Kenichi. Some of the major areas that the study of the consumer includes demographic ads, market size and development, means of distribution and levels of income. Competition: The study of competition tends to consider the role of rivals in the market and the potential threat they may present to yours and other businesses. The major purpose of the competitor evaluation is for businesses to assess the current and possible existence of their competitors as well as their assets to prepare for competition. The competition studies discuss the detection of potential competitors, the assessment of these competitors and the prediction of future competitor imitations. Climate: A Climate Analysis is needed to well understand a business environment. Any factors can influence companies and need to be analysed and also understood. Those include political, environmental, social, technological, financial, and environmental.

Unit 1: Exploring Businesses P6 - Explore how the market structure and influences on supply and demand affect the pricing and output decisions for a given businesses

The Effectiveness of Organisational Structures among Businesses

In this task, I will explain how the Organizational Structure, as well as the Relationship and Communication between the External and Internal Stakeholders, will support the Organization in helping to achieve its goals and goals, thereby making it a success. Market Structures

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An industry consists of all similar or similar or equivalent facilities being rendered by identical products. The number of business types and how they perform depends on an industry market's structure. The four basic structures of the market are: Perfect Climate: If numerous small companies compete against each other, perfect competition exists. Competitive companies tend to produce the socially optimal level of output at the minimum cost per unit. Monopoly: this is a firm that does not have competitors in its business. To drive up prices, it decreases production, this leads to increasing profits. Therefore, it generates less than the socially output level and in a Perfect Competition, it generates competitive firms at a high cost. Oligopoly: An oligopoly is a market that has very few businesses. If they collide, they tend to reduce output and thus drive up profits, like a monopoly industry company. Oligopoly companies end up participating because of the robust enticements to cheat on collusive agreements. Monopolistic Competition: Under monopolistic rivalry, the target market involves several competing companies, each of which are comparable but usually somewhat separate product or service. As they all serve food, restaurants are a great example of this, but they serve different styles at different locations. The cost of production is higher than what could be done if all companies sell the same goods, but they want to help the customer with the variety of options. Some other market structures do not match in any of the four definitions but are adaptations of an oligopoly and monopoly, however. These involve the following: Duopoly: Duopoly is a special case of an oligopoly when only two companies are involved in the business instead of the various firms. Monopsony: Monopsony is a form of market structure where the entire market has only one buyer. Oligopsony: An Oligopsony is a market system with many sellers, but there are only a few buyers to try and get hold of. Natural Monopoly: Natural monopoly is a type of monopoly where efficiency is increased by economies of scale with the size of companies. A company is deemed a natural monopoly if it can serve the demand between the market at a lesser cost than any combination of two or more companies.

Perfect market structure is what is known as a theoretical market structure, with very low entry barriers, identical products, no differentiation, an unlimited number of producers and consumers, providing a perfect curve on an elastic demand 7

line graph. The probability of such conditions is virtually impossible, so it is described as a perfect market.

Seller Seller Number Entry Barriers No Lots

Buyer Buyer Number Entry Barriers No Lots

monopolistic competition monopoly

No

Lots

No

Lots

Yes

One

No

Lots

Duopoly

Yes

Two

No

Lots

Oligopoly

Yes

Little

No

Lots

monopsony

No

Lots

Yes

One

Oligopsony

No

Lots

Yes

Little

Market Structure

Perfect Competition

Tesco PLC Market Structure In the UK, Five Market Leaders dominate the Supermarket Industry, containing of Tesco's, Asda-Walmart, Sainsbury's, Morrisons, and Aldi, with all 5 having a total market share of approximately 76.3 million. I define the UK Supermarket Industry as an oligopoly market due to having great entry barriers as a buyer, there are not many suppliers and almost everyone in the country is a client of this industry and because there are many consumers, it is fair to define the Supermarket Business as an oligopoly. Relationship between Supply, Demand and Price Demand Demand can refers to the quantity of a product or service needed by the buyer. The quantity demanded is simply the amount of product that people are freely willing to purchase at a price point; this relationship can be referred to as the' Price to Quantity ' relationship but is widely known simply as the Demand Relationship. The Law of Demand says that the smaller the price of goods, the less people will be in demand for the same goods. The higher the price for something, in other words, fewer people want to buy it. The value of a good quality bought by consumers at a higher price is less because as a good's price rises, so is the opportunity cost of buying the good. This will lead to people to avoid buying the product and then force them to forget their previous 8

consumption of the product for something else they find as value. This can be shown in the graph below. In the demand curve the A, B and C points are there. Each of the points on the curve reflects a direct correlation between quantity (Q) and Price (P), as shown in a graph where the= -f) (at the centre point of Q2, specifically at point B, is located. At point A, Q1 will be the quantity demanded, and P1 will be the price. The demand-relationship curve demonstrates the negative relationship between the cost and the quantity demanded. The higher a product or service's price, the lower the quantity demanded, the lower the price, the higher the consumer will then ask for more goods.

Supply Supply is what the company can deliver. This is called the total number. The quantity provided implies to the quantity of some excellent producers eager to supply them once they obtain their desired value. The connection between cost and how much of the goods or services are supplied to the customer is known as the' Value to Cost ' relationship but is widely known as the Supply Relationship. Like the Law of Demand, the Supply Law provides proof of the amounts to be sold at a certain value. But the supply relationship, nothing like the law of demand, shows a clear upward slope. Therefore, better the price, the greater the supplied quantity. Producers are offering more at a greater price because selling a bigger volume at a greater price raises sale. You can see all the points A, B and C on the supply curve. Each of the points on the curve indicates a precise connection between quantity (Q) and price (P) At point A, Q1 will be the quantity supplied and P1 will be the price. The curve of the demand connection illustrates the positive relationship between the demanded price and quantity. The greater the price of a product or service, the greater the volume produced, the greater the price, the greater the supply of products to customers.

Unit 1: Exploring Businesses M3 – Assess the effects of the business environment on a given business

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Business Organisation and Environment A business environment is affected day to day by external and internal factors. The external factors are ...