Analyzing the Impact of Macro Environment on TESCO's Strategies

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1................................................................................................................................................3
P1. Applying appropriate frameworks analyse the impact and influence of macro
environment on a given organisation and its strategies..........................................................3
M1 Critical analysis of macro-environment to communicate strategic decisions..................7
LO 2................................................................................................................................................7
P2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..........................................................................................................7
M2 Critical analysis of internal environment.......................................................................10
LO 3..............................................................................................................................................10
P3 Porter Five Force model to evaluate competitive forces of market................................10
M3 Strategies to enhance competitive advantage and market position................................11
LO 4..............................................................................................................................................12
P4 Strategic planning for organisation.................................................................................12
M4 Strategic management plan............................................................................................13
D1 Interpretation of data to conduct competitive analysis...................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is defined as the course of actions devised by a company with a view
to gain competitive edge at market place. In other words, it can be said that it is the route map
undertaken by a corporation to reach its goals as well as objectives within due course of time.
Corporate strategy provides assistance to organisations across the globe in enhancing their
market share by leveraging the opportunities presented by business environment (Bell, Bryman
and Harley, 2018). Also, it serves a great deal in ensuring that the firm is able to combat the
weaknesses as well as business threats.
The following report is done to gain an insight into the strategic analysis as well as
management within the confines of TESCO. This is a well renowned retail corporation engaged
in stipulation of products such as apparel, furniture, electrical items, lighting, home appliances,
technological gadgets, beauty care, toiletries, baby toys, sports equipments, travel items and
many more. Owing to its wide product portfolio, the entity enjoys extensive brand image within
the boundaries of United Kingdom. The project contains internal and external analysis of
business environment so as to identify the associated opportunities and threats. Further, the
report consists of industrial analysis of the sector to which the respective firm belongs. Lastly,
strategic management plan is devised for the growth and development of company.
LO 1
P1. Applying appropriate frameworks analyse the impact and influence of macro environment
on a given organisation and its strategies
The business environment in which a company carries out its operations is regarded to be
dynamic and turbulent. In this regard, it becomes important for a business entity to scan and
examine the environment to which it pertains in order to identify the current situation of market.
For this purpose, most of the companies across the globe make use of PESTEL analysis which is
an effective framework that provides a critical overview of the different components of macro
environment. The various elements of PESTEL are recognised to be political, economical,
social, technological, environmental and legal. The examination of all these elements together
provide assistance to a corporation in developing strong strategies which can render competitive
edge to firm. Thus, PESTEL analysis of TESCO is presented as follows:-

(Source: PESTEL Analysis, 2019)
Political Factors: This element encompasses aspects such as political stability, extent of
corruption, foreign trade policies, governmental policies, trade regulations, labour laws and
taxation rules. It is important for administration of TESCO to take into account the political
state of business environment so that the operations of the company stay aligned with it. Positive: The political system prevailing within the confines of United Kingdom is multi
party. Since the year 1920, only 2 dominant parties have been ruling the nation, namely,
Conservative Party as well as Labour Party. This illustrates the consistency in policies of
UK which provide aid to TESCO in gaining knowledge about the same and thereby,
carrying out operations within the constraints of existing political regulations.
 Negative: Since the vote for British exit from EU named BREXIT has taken place, the
political state of UK has been severely affected. As a result of this, the value of pound
has fallen down, shaking the confidence and purchasing power of buyers (Tesco has it
tough enough already without a no-deal Brexit, 2019). This has caused a downturn in all
of the corporate sectors within the confines of UK. Retail sector being one of the most
affected industries hold adverse influence over the demand for offerings of TESCO. To
deal with this, entity should devise a strategy of providing products at affordable prices.
Ill
ustration 1: PESTEL Analysis