Influence and Impact of Macro Environment Factors on Tesco

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1: Influence and impact of different macro environment factors of a business organisation4
PESTLE Analysis of Tesco.............................................................................................................4
M1: Critical analysis of of macro factors to determine the management decisions...............6
TASK 2............................................................................................................................................6
P2: Analysis of internal environment and capabilities of the organisation............................6
M2: Critical evaluation of internal environment and the capabilities....................................9
TASK 3............................................................................................................................................9
P3: Analysing of competitive environment of a organization................................................9
M3: Appropriate strategies to improve competitive edge and market position...................11
TASK 4..........................................................................................................................................11
P4: Models, concepts and theories that are helping in organisation planning......................11
M4: Strategic marketing plan...............................................................................................14
Strategic marketing plan:......................................................................................................14
D1: Critical interpretation and analysis of information.......................................................15
CONCLUSION ...................................................................................................................17
REFERNCES.................................................................................................................................18

INTRODUCTION
Strategies are regarded as plan of action are used by all the organisations. It is regarded as
actions which help in achievement of business objectives. It is useful for organisation in
achievement of their desired objectives. Such type of strategies have been formulated in order to
fulfil of business targets. Present report is based on Tesco which is a retail based organisation
and its headquarters are present in UK (Angeloska-Dichovska, and Petkovska-Mirchevska,
2017). There are around 12 stores that are located across different locations. Such analyses of
internal environment and macro environment is understood with help of models such as SWOT,
PESTLE and Porters five force model etc.
TASK 1
P1: Influence and impact of different macro environment factors of a business organisation
Business is working in the fast changing environment and there are some of the factors
that are creating both threats and opportunities for organisation such as Tesco. It is a analysis that
is done for development of understand of the such external factors as mentioned below:
PESTLE Analysis of Tesco
Political : There are many political factors that are posing a impact on Tesco such as
legislations, unemployment rates, tax rates etc.
Positive: There are many political factors that are posing a impact on functions of
company such as if import duty is reduced then it will have a positive impact on functions of
Tesco as there cost will reduce.
Negative: If taxation are are increased then it may posses a increase in prices of raw
material for organisation such as Tesco.
Economic: There are certain economic factors such as GDP growth, inflation rate etc.
that are also impacting a organisation sales.
Positive: Economic factors can have a positive impact in form of low prices ta which
they are offering products,. It will be very helpful in giving a leading position for a retail
organisation.
Negative: There are certain issues in economic environment that are related to stability of
organisation such as it consist of high interest rates that are leading to difficulty in raising finance
for making investment in organisation (Apenko,2017).

Social: Social factor consist of a variety of factors such as shopping trends of consumers .
Positive: changing social trends such as while people are willing to prefer a one stop
shopping destination is making them inclined towards various shopping options of retail markets
such as tesco.
Negative: People are getting more conscious towards their health which is leading to
towards reduction in sales of products that are having high fat content. So, it leads to low sales of
such products having high fat and calorie content (Bentley-Goode, Newton and Thompson,
2017).
Technological factors: Technological factors consist of such factors that are having
relation with technology advancement and opportunity that has to be adopted by certain retail
organisation such as Tesco.
Positive: Tesco has introduced technology of RFID which is helping in saving their
efforts & time that can be used for other productive purposes.
Negative: There are some technologies that can result in disruption for Tesco such as e
grocery stores by other competitors can lead to low sales in Tesco.
Environmental factors: There are some factors that are related with effect on global
issues as a consequence of new technology adoption.
Positive: Tesco is having focused on utilisation of greenhouse effects that are impacting
overall consumption of energy can be reduced.
Negative: There are assured factors that can have a impact in environment in a negative
manner such as there are many changes that have to be adopted by Tesco so that they are not
harming environment in any manner. It includes reduction of plastic usage etc. all such have a
impact on regular functioning of Tesco.
Legal factors: There are certain factors that are consisting of regulation and legal laws of
a country.
Positive: In UK government is having focus towards reduction of subsidies that can
result in increasing prices of raw materials for Tesco as a result they will increase prices of final
products offered by them to their customer and it is going to affect their leadership positions in
market.

Negative: Tesco is a organisation that has to face many different types of threats as they
are part of retail industry (Chen, Eshleman and Soileau, 2017). So, when they are following all
the regulation in an appropriate manner it leads to achievement of a competitive positions and
enhancement of brand image as compared to their other competitors.
Ans off growth matrix:
Ansoff growth matrix is used for understanding the different types of marketing strategy
that can be in relation to existing customers or some new customer. The Matrix helps in
understanding the four options that are available as strategies for a particular organisation:
1) Market penetration:
It is a strategy that is focusing on existing products and existing market. In Tesco, the
strategy can be used for the purpose of using the existing expansion in the existing markets.
There is no new category of product will be added in this strategy. Various new offers and
loyalty campaigns can be started by Tesco in order to attract more customers by use of their
existing products.
2) Market development:
Market development is related with use of existing product category for entering in New
Market segments. This is a strategy that can be used for the purpose of selling the products in
some new market that is completely different from the existing market. In case of Tesco the
strategy can be used for approaching a completely new market segment such as new distribution
channel can be used like e commerce strategy where only those customers who just want to buy
products online medium and not by visiting the stores can be approached.
3) Product development:
Product development is related with enhancement of profitability of organisation by
introduction of new product for the existing customer base. It consists of new product creation
for the existing base of customers, such as there can be approach by Tesco for financial services
that is completely different existing retail products and will be used for the purpose of attracting
more new customers.