BUSINESS ENVIRONMENT

Understanding the Business Environment



Understanding the Business Environment

Introduction

Tesco is one of the significant retailers in the world. Tesco is a global business, and the company has a perception of playing an integral role that minimizes the environmental impacts. The company was established in the early 20th century i.e. 1919, and it launched its first product with the brand name of Tesco in the 1920s. Tesco started its first store in 1929 in Edgeware in the UK. Further, the first self service supermarket was started in 1956 in Maldon. Tesco started its gasoline station services in 1974. Tesco continued its international expansion in 1990s and the stores opened in Poland, Czech Republic, Hungary, and Slovakia. While it was opening stores, it ventured into Taiwan, South Korea, and Thailand (Kruger, 2003, p. 34).

Task I: Organizational Purpose

Tesco is a food and grocery retailer. The company has been building a sustainable business model over the years through diversification into new geographies and value oriented retailing. International diversification helps Tesco to reduce its business risk as well as facilitate incremental sales through operations in growth markets. On the other hand, value oriented retailing builds on customer loyalty and helps to sustain revenue growth even in a difficult economic scenario. However, with the competition intensifying in the UK market, customer retention could become a primary concern for the company and can also lead to loss of market share.

Objectives of Stakeholders

In April 2012, the company launched a new range of low-priced food under the new brand 'Everyday Value', replacing Tesco Value. Through this new brand approach, Tesco is focusing on offering better quality, healthier food, and improved packaging at the same price. Thus, international diversification helps Tesco to reduce its business risk as well as facilitate growth through operations in growth markets (Avery, 2009, p. 5). Additionally, value oriented retailing builds on customer loyalty and helps sustain revenue growth even during difficult economic times.

Strategies applied by Tesco

The strategic business units permit Tesco for tailoring its market entry and offering to the one-by-one market area. The recent expansions of Tesco in the world were in the US market, where it started a few number of stores in Riverside, Hemet, and California in 2007. The company has a target of starting more than fifty shops by the end of 2012 and to address expansion into other localities of the US. It represents the use of strategic business unit for developing and expanding stores in the worldwide markets. Moreover, the company has the expertise to cater its local market with related product offerings and branding based on the market and culture (Anon, 2009, p. 2). Tesco makes every store customized in the sense that it tailors the store to the market in which it is operating. Their product offerings for every shop include a variety of products and services including fruits and vegetables.

Task II: Nature of the National Environment

Economic System

The key factor that has helped the company to build a sustainable business model is ...