SWOT Analysis of Tesco Plc

This report aims to analyze the internal and external environment of Tesco Plc through SWOT analysis. It covers the strengths, weaknesses, opportunities, and threats for the company and their impact on different functional departments.

Global business environment
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Executive summary
This report aims that there are various factors which can impact the internal and external
environment of the company. This is done by conducting SWOT analysis. Also this report covers
the identification of SWOT analysis on the operational and functional department of the Tesco
Plc. In this report, impacts of SWOT analysis is done on the HR and finance department.
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Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
P2 SWOT analysis......................................................................................................................4
P3 Operational impact analysis ..................................................................................................5
CONCLUSION................................................................................................................................6
REFERNECES................................................................................................................................7
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INTRODUCTION
Global business environment refers to the environment in different countries where
various factors are discuss with the internal and external environment of the business (Bellandi
and Santini, 2020). Tesco is the British retailing company. With 450,000 employees working in
this. This report covers SWOT analysis of the Tesco company. Along with that it focuses on the
impact of SWOT anlysis on different functional departments.
MAIN BODY
P2 SWOT analysis
SWOT analysis is the analysis of internal environment of the business. It is to identify the
strength, weaknesses, opportunities and threats for the business. The Swot of Tesco Plc is discuss
below:
Strength: Strength is the first element of SWOT analysis. As it means to identify
company's strength which helps the business in getting competitive advantage. Tesco deals in
various products which includes groceries, financial services, books and telecom services etc. it
deals in both online and offline platforms. This helps the company in generating revenue from
various options and by this risk also get diversified. Tesco covers 27% of the grocery market
share in the Britain. It has done a strong performance during this pandemic. By providing its
online sales. This increase its sales and overall revenue. Also Tesco has a strong research and
development team and marketing team which helps the company in knowing customer needs and
wants and company takes steps to produce the products to earn customer satisfaction.
Weakness: Company has some weaknesses also. As its biggest competitors are
Morrisons, Asda and Sainsbury. Company's cost structure and food safety issues act as a
weakness for the company. Cost structure include transportation cost, employees cost etc. and
food safety issues are the major challenges for the company. Also there is a leadership change in
the organisation. Changes in leadership methods also leads top employee demotivation and
decreasing sales (Dahlmann and Bullock, 2020).
Opportunity: Opportunities includes all those factors which occur in external business
environment and can affects the internal business environment through the actions. During this
pandemic, trend of online shopping has increased. This creates an opportunity for the Tesco Plc.
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Also there is high unemployment rate in this lock down, so company has created a job
opportunity in supermarkets for the people searching for a job. Then company also works upon
preventing wastage and recycling the waste and food to poor people. This creates customer
loyalty and they attract towards the company.
Threats: This is the last element in the SWOT analysis. As it impacts the internal
environment of the business. Right now UK is going through various economical, political and
health crises. Due to this, competition has increased in the retailing industry. Other companies
offers the employees better packages and facilities as compared to Tesco Plc. So employees
shifted to those companies. This can create a major threat for the company. Another threat is
Brexit that has affect supermarkets in UK. As Brexit impose restrictions on entries, so the flow
of import goods from European country to UK creates negative impact on their supply chain.
P3 Operational impact analysis
As SWOT analysis helps in analysis internal and external factors for the company and its
environment (Goslin and Kluka, 2020). So there is a impact of this on the functional
departments. It is discussed below:
Impact on HR department:
HR department is the major department of the company. As it has to take various
decisions regarding the employees and product engagement. SWOT analysis impacts the
functions of HR departments:
Internal factors: Tesco company has a very large customer base and also it has strong
customer loyalty and also it has strong employee engagement. As it is identifies in SWOT
analysis that company has a large turnover cost. Because it needs to pay to the employees and
also to increase the product quality. This impacts the operational department of company. As
company needs to pay employees salary and provide bonus, latest technologies are used and
transportation cost has also included in this.
External factors: Due to this pandemic, online shopping trends has increased. For this
company needs to hire more employees to deliver goods. This has increased the transportation
cost. Many companies are hiring employees for their companies (GUNESCH, 2020). For this
Tesco needs to provide some good packages to their employees so that they can't leave the
organisation and attract towards the company. This way company can increase its employee
trust.
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Impact on Finance department:
Financial department is the another major department of the company. Because it is the
only one who has to manage company's budget (Pattnaik, Mishra and Tripathy, 2020).
Internal factors: Tesco is the multinational retail supermarket of UK. As it has both
online and offline platforms to connect with the customers and to increase sales revenue. It also
has to gain competitive advantage in the market from its various customers. It has a strong
research and development team. This all functions needs budget to perform. So this is the
responsibility of the finance department to maintain all these activities in the required budget.
External factors: Tesco is a retail industry. It has to face many challenges and issues
regarding its functions. There are some situation which creates confusion. For examples
situations like Covid and Brexit has created confusion on the company's overall process. In this
situation company cannot open new stores in the other countries. Because this can negatively
affects the brand image and overall profits and sales revenue. Hence, company required strong
public relations and customer satisfaction to increase its sales (Ushakov and Chich-Jen, 2020.).
CONCLUSION
From the above report, it is concluded that Tesco is well established in the market. But it
should considered its weaknesses and move forward to work on them. However, company has
strong customer base to grow its business but it should improve its product quality and food
safety measures to be considers in mind to increase its profitability and revenues and also to
increase customer satisfaction.
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REFERNECES
Bellandi, M. and Santini, E., 2020. Place leadership in emerging product-service systems.
International Journal of Business Environment,. 11(3). pp.321-335.
Dahlmann, F. and Bullock, G., 2020. Nexus thinking in business: Analysing corporate responses
to interconnected global sustainability challenges. Environmental Science & Policy,
107. pp.90-98.
Goslin, A. and Kluka, D.A., 2020. 1 Integrative framework for international sport business
management and its macro-environment. Managing Sport Across Borders.
GUNESCH, C.K., 2020. CHAPTER SEVEN CULTURAL SLOWNESS IN TRAVEL
PHILOSOPHY AND BUSINESS PRACTICE FOR PLANETARY
SUSTAINABILITY: SLOW TOURISM FOR ECONOMIC, SOCIAL. Transnational
Interconnections of Nature Studies and the Environmental Humanities, p.129.
Pattnaik, L., Mishra, S. and Tripathy, S.K., 2020. Perceived Organizational Support and
Organizational Commitment: Moderating Role of Person–Organization Fit. Global
Business Review, p.0972150920920776.
Ushakov, D. and Chich-Jen, S., 2020. Global Economy Urbanization and Urban Economies
Globalization: Forms, Factors, Results. In Migration and Urbanization: Local Solutions
for Global Economic Challenges (pp. 200-218). IGI Global.
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