Importance of PESTLE and SWOT Analysis for Tesco

This presentation covers the importance of PESTLE and SWOT analysis for Tesco, a British multinational groceries and retailer. It analyzes the impact of political, economic, social, technological, legal, and environmental factors on Tesco's performance. It also discusses Tesco's strengths, weaknesses, opportunities, and threats.

BUSINESS & BUSINESS
ENVIRONMENT

INTRODUCTION
• This presentation will cover and show about the importance of PESTLE and SWOT analysis
which helped an organization to identify all macro environmental and internal factors as well.
• By identifying all factors presentation will outline negative and positive impacts on
performance of Tesco.
• Tesco is a British multinational groceries and retailer. This company provides their services in
various countries like UK, India, Ireland, Hungary etc. Tesco Plc was founded by Jack Cohen
in 1919

PESTLE ANALYSIS
Political
• Tesco operates worldwide since then global political
factors has greatly influenced its performance.
• Political factors includes tax rates, political instability of
the country in which it operates have negative impacts as
it creates riots and conflicts which can decrease its sales.

ECONOMIC
• There are several economic factors like changes in
the taxation policy, demand and profits.
• It is important for Tesco to be aware of any
changes in policies to take opportunities.
• Tesco is now focusing on diversification and
internationalization strategies which is the main
reason of its success.

SOCIAL
• The changes in the market trends indicate that people are becoming more aware
about purchasing only qualitative products in a bulk.
• People prefer one stop shopping as it saves their time which is good for Tesco Plc.
• It provides good quality and variety of products as one store which can increase
their profitability and productivity.

TECHNOLOGICAL
• Advanced technology has positive impacts on the performance of Tesco as it gives
various opportunities to this company like online shopping facilities to customers.
• By providing this facility, Tesco can attract wider range of customers as home
delivery and online shopping is ease for customers that reduce labour costs.
• On the other hand investment in technologies and new resources can increase their
overall cost.

LEGAL
• There are various policies' and legislations that have direct impact on its performance
negatively and positively.
• Food retailing commission act of 2004 has suggested a code of practice, according to that law
there is a requirement of all retailers to give prior information and notice about making
changes in the prices from suppliers.
• Tesco can not make any changes in their prices according to this law which can decrease their
sales and consume their time.

ENVIRONMENTAL
• There are various environmental factors that put
pressure on Tesco to use guidelines and reduce
wastes.
• Tesco is committed itself in order to reduce carbon
Footprints by 50% up to 2020. It can give various
opportunities to Tesco as it can increase its brand
image and loyalty among customers.

SWOT ANALYSIS
SWOT analysis is an effective tool for Tesco Plc because it makes them able to analyse those factors and are which they
need to be improved by them. With the help of SWOT analysis it identifies its own strengths, weaknesses, opportunities and
threats.
Strengths
• Strengths of an individual and company can be defined as a capacity and the ability of doing all the things in right
manner with productively and effectively. A set of strengths of Tesco company are:
• The main strength of Tesco plc is it provides the higher quality products and better customer services and for that it has
won numerous awards.

CONTINUE
Weaknesses
• Weakness can be defined as a state of being weak and a lack of
strengths in some areas. Some weaknesses of this company are:
• Prices of some of its items are not matching with the quality of
products, and they are very costly as many customers can not
afford to buy them which can decrease its sales.

CONTINUE
Opportunities
• An opportunity is a situation and a set of circumstances that makes an organization and
an individual able to do something which they already want to do. Tesco Plc has some
opportunities which includes:
• There is an opportunity for Tesco Plc for Joint venture by which it can increase its
efficiency and performance level.

CONTINUE
Threats
• A threat is something that can cause damage and danger. Threats of this company are as
follows:
• Competitive threats is the main threat for Tesco Plc as they are providing the same
quality products to customers at lower prices which may decrease Tesco's profits and
sales.

Influences of internal and external analysis on the decision-
making process
• There are various external and internal factors that have impacts on the decision-making process of Tesco
Plc.
• There is an interrelationship between internal factors and external factors and both factors have significant
impacts on the decision-making process.
• For example, The core strength of this company is it provides the higher quality products to the customers
and take care of the needs and health of their customers which satisfy social needs in the context of external
social; factors, so it can be said that there is an interrelationship between internal and external factors.

CONTINUE
• Weak financial performance can decrease economic growth which can also impact on
its decision-making process and other strategies.
• Digital revolution and advanced technology has also impacts on the production and
consumption.
• Digital revolution and by investing more in technologies it can make its products
advanced and creative which can help them in increasing its profitability and sales.

CONCLUSION
• This above presentation has covered various external and internal factors that have impacted on the
company's performance and operations like political, economical, social, environmental and with
the help of PESTLE analysis, an organization has analysed all macro environmental factors with
the main aim of being in a competition.
• Further this presentation has analysed and shown about the importance of SWOT analyse as it also
helped an organization to find out their own strengths and weaknesses and gain a competitive
advantage.

REFERENCES
Books and journals
• Braun, C. and Hadwich, K., 2016. Complexity of internal services: Scale development and validation. Journal of business
research. 69(9). pp.3508-3522.
• Hammad, A., 2015. Strategic Change and Its Management to Expand Business Through Implementation of Models: A Case
Study of Boots UK. Available at SSRN 2676800.
• Peng, S., 2018, November. The Status and Countermeasures of Rural E-commerce in Shandong Province Based on SWOT
Analysis. In 2018 International Conference on Economy, Management and Entrepreneurship (ICOEME 2018). Atlantis Press.