Analyzing the External and Internal Environment of Tesco

Running head: BUSINESS STRATEGY
Business Strategy
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1BUSINESS STRATEGY
Executive summary
The purpose is aimed to analyze the external as well as internal environment of Tesco. The
company is well recognized in both the global and UK retail industry. In order to anlyze the
external environment, PESTLE analysis of the organization will be conducted. The PESTLE
framework analyses the dynamic as well internal environment analysis of TESCO through which
the company operates the forces that have imposed or possess the potential to impose higher
impact on the performance of the organization. For analysis of the internal environment of the
organization,SWOT analysis will be conducted.

2BUSINESS STRATEGY
Introduction
The Tesco Public Limited Company refers to a British multinational groceries as well as
general merchandise retailer that has their headquarters at HertfordShire, England, UK. The
company is considered to be one of the largest food retailer across the world with a yearly
revenue of 55.9 billion a pound as of in 2017 and more than 476,000 employees. The
organization possesses approximately 6,553 stores across the world in more than 14 countries
across the world. Across Asia and Europe, Tesco is present in 7 countries and is leading when it
comes to the groceries in the UK, Ireland, Hungry as well as Thailand. According to researcher,
Tesco offers the consumer with over 960 Express stores that sell nearly 7000 products including
fruits, vegetables and regular grocery items in suitable localities (Reilly 2015). Apart from that,
the company also possesses 170 Metro sores that offers consumers with a variety of food
products and are located in city centers or town. Along with this, Tesco currently has 450
superstores that sell both food as well as non food it that includes DVDs and books. When it
comes to online marketing, the organization possesses their own official website Tesco.com as
well as Tesco direct where online retailing service is provided to the consumers. Additionally, in
order to gain competitive advantage over its competitors the company also provides the
consumers with broadband internet connection and Financial service with the help of Tesco
personal Finance (Brannen, Piekkari and Tietze 2017). The company started its business as a
grocery store at Edgeware, London in the year 1929 and gradually grew to be the leader of the
UK retail Industry with the help of efficient managerial skills and tactics. However considering
the fact that in this era of modernization, the competition in both UK as well as global retail
industry is gradually increasing, the management of the organization needs to keep in track of
both their Micro as well as macro environment in order to maintain as well as enhance their

3BUSINESS STRATEGY
brand equity, revenue and competitive advantage both in national as well as international level.
in order to analyze and evaluate the macro as well as micro environment of the organization, in
the following paragraphs PESTLE Analysis, SWOT analysis and Porter’s Five Forces Analysis
of Tesco will be performed.
Discussion
PESTLE Analysis
In order to further expand their business in the highly competitive market of UK, it is
highly crucial for the managers of the organization to understand the external environment of
their organization. The PESTLE analysis is the external environemtnal analysis that reviles the
factors through which TESCO is currently operateing while resisting the forces that have
imposed or possess the potential to impose higher impact on the performance of the organization.
Political Factor
Considering the fact that Tesco is operating across 14 countries across the world
including Asia and Europe, the organization is exposed to a good number of political factors that
possess the potential to affect its operations. These factors include tax rates, current as well as
impending legislation, political instability, economic conditions and unemployment rate of the
country. Considering the fact that the political stability of UK have deteriorated due to Brexit,
this factor has imposed negative impact on the performance of the organization. Another
example of the impact of politics on the business of the organization includes the impact of
import duties on goods that Tesco import from outside UK like China as well as East Asia.
According to researchers, the accession of China to the WTO has promoted free flow of foreign
trades by removing barriers which in turn, is encouraging Tesco to establish its business in the