This paper "Macro and Micro Environmental Factors in the Organization of Tesco" focuses on the fact that all organizations are open systems; they exist within a dynamic and complex environment having a variety of interchanges with it, both receiving inputs and outputs. …
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The organization that I have chosen is TESCO, which is a well-diversified company working in many different ventures and has created a great deal of value in the eyes of their customer. Tesco runs more than 2,300 supermarkets, hypermarkets, and convenience stores in the UK (where it is the market leader in food retail), Ireland, Central Europe, and Asia. Its operations include convenience and gasoline retailing (Tesco Express), small urban stores (Tesco Metro), hypermarkets (Tesco Extra), and financial services through Tesco Personal Finance. A global leader in online grocery sales, it owns a 35% stake in US grocery chain Safeways Grocery works. It is the leading online grocery store and it is now expanding its business with a TV channel and a "retail-based education institution”.
The environment may be divided into three layers: the macro-environment; industry or sector; competitors and markets. All these layers interact with each other within themselves. When considering the macro-environment factors for TESCO the basis of analysis to be used is the PESTEL analysis. This model uses broad headings such as: Political, Economic, Social, Technological, Environmental and Legal; to analyze an organization’s macro-environment.
Each and every company in which TESCO operates has a different political risk because of the fact that different countries have different political policies which can be either beneficial or can be harmful to TESCO’S operations. For TESCO to operate in different countries, the political influence depends upon the stability of the current government. TESCO Lotus in Thailand has delivered strong growth during the year 2008-09 despite Thailand’s weakening economy and the uncertainty involved with the stability of the Thai government. TESCO’s operation in the UK, Ireland, and few other countries; with respect to competition have been continuously scrutinized by the competition authorities. TESCO’s management has kept itself up to date with respect to any changes in the political uncertainties and has kept them in mind when developing their long-term strategies.
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