External and Internal Analysis of Tesco plc

Applied
Corporate Strategy

Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
1. External analysis of Tesco plc............................................................................................3
2. Internal Analysis of Tesco plc............................................................................................7
3. Strategy Evaluation of Tesco plc......................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

Introduction
Corporate strategy is unique approach towards strategic decision making by analysing
similar industry and identify the manner in which organisation can create maximum of value. It
is one of most effective technique through which organisation will be able to reach profitability
point in its existence. It consists of various decisions making which makes business operation
more efficient and productive so that business organisation can increase its market share.
Corporate strategy focuses over various business segments such as internal environment, external
environment, allocation of resources, business deign and so on. Therefore in this report, in-depth
analysis will be carried forward by considering various business aspects so that success can be
attained. In this regard, Tesco plc has been evaluated in detail in regard to its respective business
operations, internal & external environment, etc.
Main Body
1. External analysis of Tesco plc
Political environment: Political factor described as diplomatic condition of a place where
organisation is being located. It is important to consider political environment while considering
external environment of an entity (Bénet and et. al., 2019). Tesco being leading organisation in
retail industry, it emphasises over its political environment by making proper adoption of
government policies in order to promote consistency and safety in regard to operations. Political
factor include fluctuations and shift in political segments which can cause great impact to healthy
running business unit. It is considered as threat to a business as it involves compliances and
abiding with laws which builds complexities for an organisation in order to operate its business
in easier manner.
Economic environment: Economical factor is closely linked with organisation in terms of
its revenue generation capacity and other benefits being drawn by such entity. A company like
Tesco needs such an economic condition which will enhance earning capacity of it without any
delays in payments, receivables and others (Bonsu, 2019). Economic fluctuations cause great
impact to business organisation due to which it will be unable to meet its business obligation in
the long term. Inflation and deflation rates play significant role an economical environment of a
country. It is considered as threat and sometimes as opportunity because if organisation is

located at a place where there is maximum favourable economic environment then it will
promote increase earning capacity of the company.
Social environment: It refers to a market condition where demographic factors are being
considered. Society plays vital role in organisational success and failure. Thus it is important to
consider their needs and requirements in adequate manner (Fontrodona and et. al., 2018). Social
analysis is necessary in order to identify customer needs, requirements, culture, age, gender,
income, etc. Therefore organisation is required to analyse requirement of its target audience as
per their age, gender, culture, and income and so on. Therefore Tesco needs to produce goods
and service by considering needs of its large customer base so that such audience could be
retained for longer period. It is considered as opportunity to perform well in the market so that
maximum customers can attract to business entity can enhanced profitability will be achieved by
such organisation in related period of time.
Technological environment: Quick shift in technology is being observed in recent times
and therefore it is important to cope with such changing environment in order to retain market
position for long lasting period (Goyal and Howlett, 2019). Tesco has implemented advanced
technological base in order to meet current market obligations so that uncompromised profits
could be achieved. It is considered as opportunity for business organisation as its adoption will
aid in retention of appropriate customer base and long term profitability.
Legal environment: Legal environment compromise of laws and regulations which is
being provided by government or statutory authorities in regard to business organisations so that
optimum transactions could be carried out (Gursoy and et. al., 2017). Therefore any change or
modification in policies or laws of such operating location could be threatening for business unit.
Tesco being a market leader in retail sector, it has operations across the world and therefore it
has to comply with local and international legal laws in order to carry out its operations in
smooth manner. It is considered as prevailing threat to a company as it will lead to complexities
and broad framework which needs to be abiding with in order to run business operations in
appropriate manner.
Environmental: It involves of those factors which are related to eco-system. Thus
environmental factors need to be considered so that maximum customers could be attracted
towards company in effective manner. Tesco has been working on developing sustainable
environment through which eco-friendly products could be promoted and eco-destructive