External Environment Analysis and Business Strategies for Tesco

Business in the
century

Table of Contents
Introduction.................................................................................................................................................3
External environment analysis.................................................................................................................3
Opportunities and threats.......................................................................................................................4
Conclusion...................................................................................................................................................5
References...................................................................................................................................................6

Introduction
Organization plays a vital role in satisfying the need and requirement of economy
because different organizations provides different services to the economy which helps in
satisfying the basic needs customers. In 21 century demand of the people are changing as per the
upcoming trends due to which they required the best and unique services from the organization
due to which companies also tries to develop their services as per the demand of the customers
so that growth of the economy can take place and profit of the business can also be increased in
the market .Tesco is one of the top retailer company in UK which was founded in 1919 by Jack
Cohen.its headquartered in welwyn garden city England. Its demand in the market is more as
compared to other organization in the market due to the services which it provides to the
customers. Tesco provides different variety of goods and services to the customers which helps
in developing the productivity of the company which will further help in maintaining goodwill
of the company. In this report it will be analyzed how external environment affects the
functioning of the business and how business overcome from the challenges of the external
environment to maintain its goodwill in the market (Kwiatkowski, 2018).
External environment analysis
There are different factors in the external environment of the business which are affect
the functioning of the business in the marketplace. To observe the activities of external
environment pestle analysis has been done. Pestle analysis is basically a method which is used to
analyze macro environment so that functioning of the company should not affected and smooth
functioning of the company can take place. Pestle stands for economical, political, social,
technological, environmental, legal. Political factors: These are the factors which can affect the
profit of the business in the market if government will impose high rates on the goods and
services then it can affect the import and exports of the goods due to which revenue generating
power of the business will get affected. In order to maintain the financial stability of the
economy government has encourages the retailer organization to provide the job opportunities to
the people so that growth of the economy can take place due to which Tesco is providing the
employment opportunities to the economy so that growth of the economy can take place
effectively. Economic factors: these factors can affect the financial condition of the business
because if the inflation rate will get higher then it can impact the demand of the company in the
marketplace due to which revanue of the company also get affected in market. organization
should be aware about the changes in the policies, taxation etc so that functioning of the
company cannot get affected (Polson, 2020). Tesco id dependent on the UK market where it has
30% market share due to which it is important for the business to analyze the economic condition
of the market. Social factors: In today’s world demand of the individual is changing as per the
trend which gets developed in the economy due to which organization has to develop its services
as per the need and demand of the buyers so that growth of the economy can take place demand
of the customers can also be satisfied effectively. If the organization will not produce its goods
as per the trends which is taking place in the economy then it can affect the demand of the
organization due to which revenue of the company will also get affected in the market.