Positive and Negative Impacts of PESTLE Factors Including Brexit on International Business: A Case Study of Tesco

This report discusses the impact of PESTLE factors, including Brexit, on international business operations. It highlights the challenges faced by Tesco and the business strategy prepared by Tesco to deal with the consequences of Brexit in HR, marketing, financial management, and IT systems.

International business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Positive and negative impacts of PESTLE factors including Brexit which impact business
operations.....................................................................................................................................4
Key challenges faced by Tesco ...................................................................................................6
Business strategy prepared by Tesco to deal with consequences that are created due to
Brexit( HR, marketing, financial management and IT systems).................................................7
Recommendations........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
International business is a wide term which means performing business operations all
over the world. In this competitive world international business is known as performing trade
across the borders (Cavusgil, 2017). Most of the business organisations in this competitive world
develop international trade which requires huge efforts for survival. In this report various
positive and negative consequences faced by international businesses due to Brexit in global
market. This report includes various challenges that are faced by a business firm in global
market. In this report a business strategy is explained which is prepared by a company to
survive successfully in international market. In this report example of Tesco is taken into
consideration for better understanding international business. Tesco is a multinational retail
company which was established in 1919 and its headquartered in Welwyn Garden City, United
Kingdom.

MAIN BODY
Positive and negative impacts of PESTLE factors including Brexit which impact business
operations
In the global business environment there is huge impact caused by Brexit on different
business operations in national and international market. The Business organisations faced many
issues after Brexit which led to shutdown of many companies (PESTLE analysis of Tesco, 2021).
The PESTLE analysis of the situation is explained below in context of Tesco with :
 Political factors- The political factors are considered as major factors which include
political situation of the country. After the Brexit political situation went unstable in the
country and it mainly impacted the economy of country. However our respectable Prime
Minister was excited for the change. The dependency of European Union increased with
the situation of Brexit in recent times. Tesco also got impacted by various factors which
are related to political situation in the country. Rules and regulations related to business
are changed after Brexit which mainly impacted operations of Tesco.
Positive impact: Main positive impact of Brexit it led to develop a positive change in whole
country. Dependency on European Union decreased and independent operations are now
performed in the countries.
Negative impact: The main negative impact of political consequences is that company has to
follow new rules and regulations which are formulated after the new government.
 Economical factors- The economic factors are related to the economic position of
country in a major sense. Economic factors mainly includes gross domestic product and
national income of the country. It also includes the monetary policy of the country which
decides various rates of products (Casson, 2018). Situation of inflation and recession are
also considered as important in a country which decides the economic position of the
country. It is important for the government to focus on economic factors in order to deal
with various consequences that are created by economic factors.
Positive impact: Main positive impact of economic factors is the business entity will contribute
to total gross domestic product and national income of the country. In the recent times the
monetary policy of United Kingdom is favourable for many business organisations that are
functioning at the marketplace.

Negative impact: The negative impact of Economic factors is they will create a recession in the
country which will be harmful for many organisations.
 Social factors- In the organisational life social factors are considered as major factors
which are responsible for development of culture. They also includes living standard of
society (Dörrenbächer, 2019). After Brexit there are no specific social changes which
occurred in the organisation. There is no change in culture of society also which mainly
impact the business operations.
Positive impact: The main positive impact of social factor is the support of general public for
the Brexit. However some people protested against the decision which changed the perspective
of government and made government think about change (Vătămănescu, 2020).
Negative impact: Negative impact was the people who were against the decision protested
against the decision.
 Technological factors- In the functioning of a business technological factors are the
main factors which impact various operations of a business. Most of the successful
business organisations at the marketplace like Tesco use information and technology to
perform main business functions. The use of advanced computer systems and software
are main part of technological factors. Main software are developed by Tesco in order to
perform customer handling. Tesco also use digital marketing in its operations along with
social media marketing.
Positive impact: It is essential for a business to develop positive business strategy using the use
of computer and software. Tesco can take support of IT experts to handle major operations which
will increase the sales of company.
Negative impact: Main negative impact of technological factors it can lead to cyber attacks
which can infringe privacy of customers. The technological factors can also lead to privacy
issues.
 Environment factors- Along with political, economic and social factors, environmental
factor play an important role in business development. It is compulsory for a business to
follow environmental policy in order to conduct a sustainable business at the marketplace
(Hannibal, 2018). A business organisation like Tesco should consider the impact of
business on environment and should follow best business practices.

Positive impact: In environment of a business the environmental policy of company helps a
business to grow substantially in the marketplace (Kolk, 2018). Most of the business
organisations at the marketplace follow environmental policy of government to develop
sustainable business practices.
Negative impact: The major negative impact of environmental policies of government is it can
impose fine and penalties on a business.
Legal factors: The legal factors are considered as major factors which are developed and
formulated by legal authorities (Zhao, 2018). It is essential for a business organisation to follow
all law related policies in order to conduct ethical business at the marketplace.
Positive impact- Positive impact of legal factors is they help in development of a legal business
at the marketplace.
Negative impact- Legal factors impose various formalities on a business which can make
business formal at the marketplace.
Key challenges faced by Tesco
After the Brexit many national and international British companies faced many problems
and challenges. The trading practices of various companies in marketplace is majorly affected
due to Brexit. Earlier most of the British companies used to follow norms and policies which are
formulated by European Union. Most of the business organisations at the marketplace now
follow rules and regulations formulated by government (Kourula, 2017). New industrial and
environmental policy which are formulated by government are major challenge to existing
companies. Major business organisations like Tesco has hired strategic management which is
helpful in formulating a perfect strategy in order to overcome various challenges. The main
challenges which are faced after Brexit are mentioned below:
 New policies- The companies in British market are facing major challenge as there is a
rapid change observed after Brexit. The major business organisations at the marketplace
develop a precise business strategy to overcome various challenges.
 Changed business environment- Business organisations faced a challenge which was
change in the business environment. It is the ethical responsibility of a business to cope
up with changed business environment after Brexit in order to perform major business
operations.

 Changed culture- The culture of a business organisations whenever there is a change in
political factors. Most of the business organisations like Tesco take support of Human
resource management in order to face organisational change.
Business strategy prepared by Tesco to deal with consequences that are created due to
Brexit( HR, marketing, financial management and IT systems)
The strategic management of Tesco is mainly formulating various policies and plans to
deal with major consequences that are formulated after Brexit. Various modifications which are
formulated by top level management of Tesco in different departments are mentioned below:
 Human resource department- The human resource department of Tesco is professional
and trained to manage large number of employees. HR department of Tesco mainly
perform various functions like recruitment, selection, induction and performance
manager to train employees for various consequences (Mäkelä, 2018). It is the major
responsibility of human resource department to follow major steps which are helpful in
development of culture in an organisation.
 Marketing department- Marketing department of Tesco is well prepared after Brexit to
perform crucial marketing operations. The marketing department of Tesco also helps
other departments to achieve overall business development. Marketing management of
Tesco also use information and technology to perform advertisement and publicity. Major
companies at the marketplace are focusing on marketing department to handle various
activities and tasks.
 Information and technology- Information and technology department of Tesco is
developing various software to deal with large number of customer. The company is also
focused in hiring professional IT experts who are professionally trained to deal with
various consequences (Matheson, 2018). Tesco is majorly taking assistance of IT
consultancy to cope with new macro environment conditions on Brexit.
 Financial management- It is the major responsibility of a company to focus on financial
management for maintaining financial discipline. The financial management of an
organisation is majorly dedicated to perform various operations with accuracy to develop
systematic operations.

Recommendations
In the era of stiff competition between various companies it is essential for a business to
follow rules and regulations which are framed by legal authorities. It is recommended for a
company to develop precise strategy for the business development with the help of top level
management and strategic management. Tesco should successfully follow main business strategy
and should follow various rules and regulations which are modified by top level management of
the company (Prud’homme, 2019). It is recommended for Tesco to take assistance of
information and technology equipments to perform major operations of the company. In the
recent times the importance of risk minimisation in relation to business is trending in the
marketplace. So Tesco must use risk minimisation techniques in a precise manner to develop the
business in international market. Tesco should also train its employees with major business
techniques in order to increase their performance for the future. In the competitive world it is
major responsibility of management to focus on business development in order to gain
competitive advantage.
It is recommended for Tesco to develop performance of employees so that the company
will be able to deliver best services in international market. It is recommended for Tesco to
mainly focus on optimum utilisation of resources to effectively use the available resources. It is
the major responsibility of Tesco to focus on development of productivity of the whole
organisation for meeting the demand of different customer. After Brexit company should
develop its employee's motivation using best motivational theories to develop enthusiasm in
employees (Santacreu-Vasut, 2017). It is major responsibility of management of Tesco to
develop optimistic feeling in employees for facing different challenges. It is recommended for
Tesco to face various challenges that are arising due to Brexit in order to handle various business
operations with maximum efficiency. The Tesco should implement best techniques of
coordination in order to develop various functions of the organisation.

CONCLUSION
From the above stated report it can be concluded that both international and national
companies are affected by Brexit. This report concludes that it is major responsibility of a
company to perform PESTLE analysis in order to survive at the marketplace. This project
concludes that it is compulsory for a business organisation to develop a perfect strategy in order
to face various consequences of Brexit. It is essential for a business organisation to hire skilled
and trained employees to face various consequences of Brexit. This report also concludes that it
is essential for the company to develop and modify various functional departments in a crucial
manner in to deal with various consequences of market fluctuation.

REFERENCES
Books and Journals
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Global Edition.
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research: making critical IB an integral part of a societally engaged international business
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technologies and the location of international business. International Business Review, 27(6),
pp.1116-1127.
Kolk, A., Rivera-Santos, M. and Rufín, C., 2018. Multinationals, international business, and
poverty: A cross-disciplinary research overview and conceptual framework. Journal of
International Business Policy, 1(1), pp.92-115.
Kourula, A., Pisani, N. and Kolk, A., 2017. Corporate sustainability and inclusive development:
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Santacreu-Vasut, E., Shenkar, O. and Shoham, A., 2017. Linguistic gender marking and its
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