Impacts of External and Internal Factors on TESCO

BUSINESS AND BUSINESS
ENVIRONMENT

TESCO is a public limited company which is one of
the largest retailer in whole world. It is generally focus on
selling food and non food products but today it has expanded
its business and also provides goods and services like
electronics, clothing, furniture, finance, insurance, hardware
services and many more. There are some internal as well as
external factors which influence the function of a business and
have both positive and negative impacts on operations of an
enterprise (Halbert and Ingulli, 2011). Here, PESTLE analysis
is to be done to know the impacts of external factors on
working of TESCO. These are discussed as under:
TASK 3

 Political factors: As TESCO is a retailing company that
operates in whole world, the political factors have a great
impact on the performance of it. These include various types
of rules and regulations, provisions of government, tax rates,
acts of legislation, etc. All these laws and legal regulations
become hurdle while operating any business activity. The
various activities of trade unions is one of the most common
political factor which affects retail sector. These have both
positive and negative impacts on operations of an enterprise
(Elliot, 2011). There are certain factors which have negative
implications on functions of lower level management of
TESCO.
 Economic factors: There are several macro economic factors
that affect TESCO to a grand level. At present, UK is going
through financial crises and a growth in economy creates a
positive indication for TESCO, as it helps in growth of retail
industry.

At the time of recession, the rate of unemployed people
increases which results in lower disposable income of citizens
of UK. These factors include economic growth, inflation rate,
interest rates, leverage costs, demands, profits, etc. Therefore,
management of this company should be aware about various
changes in any policies and regulations of UK government like
changes in the rates of taxes and factors that affects the
financial condition of enterprise.
 Social factors: These comprise of culture, changes in
consumer behavior and attitude, health consciousness, age
distribution, etc. It has direct effect on working of business.
TESCO supply a number of tasty and healthy food products to
its customers (Commander and Svejnar, 2011). Today, due to
the changes in the taste, behavior and preferences of users, the
company also offers non food items in market which attracts
more customers. Therefore, TESCO is adapting changes and
supplying such goods which have more demand in market.