Management

INTRODUCTION

The term "management" refers to the activities (and often the group of people) involved in the four general functions: planning, organizing, leading and coordinating of resources.

Jack Cohen consolidated his initial small-scale success by joining forces with T.E. Stockwell, and the nameTescowas born.

By 1939 Jack Cohen had opened a number of stores, and backed them up with his creative innovations in warehousing and stock control. At the beginning of World War II jack introduced food rationing before the government did to ensure that everyone received an equal and sufficient amount of food. This capitalism may go some way to explain the fondness that working class people have maintained for the company. It proved that business is most effective when ethics and efficiency are together.

The history of Tesco since the second world war has been one of continuous expansion and success both in the UK and, more recently, in the new EU countries, including Slovakia, Czech Republic, and Hungary (Budapest).

Tesco is now Britain's largest food retailer, employing over 240,000 people worldwide and has net yearly profits of over £1 billion. the website of this groupis one of the most popular in the UK, with over one million registered users.

International

Tesco has been successful in opening up new growth markets in Central Europe and Asia. The proportion of total Group space outside of the UK grew to 38% at our half year. We now operate in Hungary, Poland, Czech Republic, Slovak Republic, Thailand, South Korea, Taiwan and the Republic of Ireland. In December we announced of our intention to develop hypermarkets in Malaysia where our first store will open in 2002

Tesco PESTLE analysis

APESTLE analysis of Tescoexamines the main external factors impacting on the company:

There are many factors in the environment that effects the decisions of the managers of any organisation. Tax changes, new laws, trade obstacles , demographic change and government policy changes are all examples of macro change. To help analyse these factors managers can categorise them using the PESTEL model. This classification distinguishes between:

POLITICAL FECTOR

These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system. Many governments can be involved. For instance, Tesco might have to deal with British and Columbian politics in regards to its coffee supply.

ECONOMICAL

These include taxation changes , interest rates, inflation and exchange rates , economic growth, interest rates. As the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour. For example:

  • higher interest rates may deter investment because it costs more to borrow
  • a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency
  • inflation may provoke higher wage demands from employees and raise costs
  • higher national income growth may boost demand for a firm's products

Economic factor have large impacts. Fluctuations in the stock market, or tax increases, can seriously affect the bottom line of a company like Tesco.

Social factors.

If there is Changes in social trends can affect on the demand for a firm's goods and the availability and compliance of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staff are living longer. It also means some firms such as Asda have started to recruit older employees to tap into this growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines has increased whereas demand for toys is falling.

Thisfactors can vary from the impact of immigration, to changes in fashion.

Technological factors:

New technologies construct new products and new processes. MP3 players ,high definition TVs, computer games, online gambling and computer games are all new markets created by technological advances. Online shopping, computer aided design, bar coding are all improvements to the way we do business as a result of better technology. Technology can reduce costs, improve quality and lead to modernism . These developments can benefit consumers as well as the organisations providing the products.

Newtechnologieshave had a great impact. For instance, online shopping has become a major factor in Tesco's recent success.

Environmental factors:

Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a important issue for firms to consider. The growing voracity to care for the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

Large organization has anenvironmentalimpact. For instance, Tesco uses fossil fuel in its transport network. Reducing this demand is a major challenge.

Legal factors:

The legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have impact on firms' behaviour. The introduction of legislation, age discrimination and disability discrimination and greater requirements anincrease in the minimum wage for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes may affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).

Different categories of law include:
  • consumer laws; these are designed to protect customers against unfair practices such as misleading descriptions of the product
  • competition laws; these are aimed at protecting small firms against bullying by larger firms and ensuring customers are not exploited by firms with monopoly power
  • employment laws; these cover areas such as redundancy, dismissal, working hours and minimum wages. They aim to protect employees against the abuse of power by managers
  • health and safety legislation; these laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment

In summary, anyTesco PESTLE Analysismust consider external factorsin detail, and examine how their impacts continually change.

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