Impact of Macro Environment on TESCO's Strategies

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
P1 Impact as well as influence of macro environment over the organization and its strategies. 1
P2 Internal analysis for given organization.................................................................................3
P3 Porter's five forces..................................................................................................................5
P4 Theories for the strategic direction and planning for the organization..................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is a strategy by which the company can achieve the goals as well as
take competitive advantages over the competition. Business strategy helps the business achieve
satisfaction among the customers (Cadez, Czerny. and Letmathe., 2019). TESCO is a British
MNC which deals in grocery store which is spread all across the world. The company is having
headquarter in Welwyn Garden City. The firm is the third largest retailer in the entire world. The
firm was founded in the year 1919 and founder of the organization is Jack Cohen. The topics
covered in the study are the Pestle analysis for the macro impact. For the micro impact Swot
analysis is taken. Various theories along with Porter's five factors are taken. In the study a detail
analysis and study will be done.
MAIN BODY
P1 Impact as well as influence of macro environment over the organization and its strategies.
For the chosen organization which is TESCO, PESTLE analysis is used in order to find
the influence over the organization. Positive as well as negative factors are considered in the
macro environmental analysis. They are the factors which can influence organization as a whole
in large manner over the economy of scale.
PESTLE Analysis
PESTLE analysis is the analysis which influence the organization from the factors which
are external. Performance as well as position of the company is known by doing Pestle analysis
by finding out what are the reasons that the company is lagging behind and how the company can
overcome it, pestle analysis is explained below:
Political factor
Political factors are the factors on which the influence of the government over TESCO is
analysed in which the policies related to government which include changes in the government,
taxation policies, labour policies and trade restriction policies are taken (Cadez, Czerny. and
Letmathe, 2019). The positive impact over TESCO is the government is stable which will lead to
same taxation policy for the company. UK's government is having taxation concession policy for
the grocery store which will help the organization to save taxes and this will lead to increase in
the profitability of the TESCO (Kaliappen. and et.al., 2019.). The negative impact over TESCO
will be change in laws of labour in which the UK government is increasing the minimum wage
rate for the labour this will adversely effect the company by increasing the cost of the company.
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Economical factor
Economic factor includes change in interest rates, inflation, deflation etc. Positive impact
over TESCO will be deflation and this will lead to fall in the price of the grocery products, due to
which the sale of the TESCO will increase and this will lead to rise in the revenue of the
company and the profitability of the TESCO will increase automatically. The negative impact
over TESCO will be change in interest rate and due to which loan will be available to TESCO at
higher rate and this will increase the cost of borrowing and similarly the profit of the company
will fall.
Social factors
Social factors include wealth, occupation, education, lifestyle etc. The positive impact of
the social factor over the TESCO will be wealth of the UK population as the company is
targeting high wealth people in order to increase its revenue by providing them home delivery
services (Dunne. and McBrayer, 2019). The negative impact over TESCO will be impacting the
lower income group as they will think that the company is only profit oriented and focuses only
on targeted audiences this will shift the audience to other grocery store.
Technological factors
Technological factor include advancement of technology which can ease the conduct of
the operation and make fast the process in the work. It will impact and influence TESCO by
using advance technology in which 3D technology will be used by TESCO in order to present
information available online in much better and attractive way. This will increase the visibility of
the product and which will lead to increase in the sale of the product or products. The negative
impact over TESCO will be using outdated technology in the grocery cart in which still company
is used traditional cart, this will lead to making shifting of the customers as the customers will be
more interested towards the grocery store having advanced technology in the grocery store, in
which the company can automatically put items in the cart.
Legal factors
Legal factors are law factors which effect the operation of the business. Positive impact of
the legal factor change in law for the safety and health management of the employees in which
the companies which were not maintaining the safety of the employees have to suffer. TESCO is
already maintaining proper safety law which will lead to imposing no penalty against them. The
companies which were not maintaining the safety will have to pay for the penalty and this will
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