Business Strategy: Analysis of Tesco's Internal and External Factors

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1..................................................................................................................................................3
P1 Macro environment................................................................................................................3
LO 2.................................................................................................................................................5
P2 Internal environment..............................................................................................................5
LO 3.................................................................................................................................................7
P3 Porter's five forces..................................................................................................................7
LO 4.................................................................................................................................................9
P4 Range of theories, concepts, models, interpreting and devise strategic planning..................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is a process which is taken up by any company so that the company can
work in one direction and the company will be able to make the most if the strategy of the
company is followed. Analysis of the internal and external factors in the company are done so
that the company's can work better and efficiently so that they can not just capture a larger
market but also make a profit from it. It is very important for any company to go in one direction
so that they can be on the same road to achieve their aims and goals.
The selected company for the report is going to be Tesco. Tesco is a British multinational
company whose headquarters are in England, United Kingdom. According to gross revenues and
revenues it has been numbered the world's third and ninth retailer in the entire world
respectively. The company has stores around 7 countries and it is the leading grocery store in
United Kingdom. The founder of the company is Jack Cohen in 1919.
The report is going to cover the following fields which are the internal and external
factors of the company which are the SWOT and PEST of the company, Porter's five model,
range of theories, concepts and models related to the company.
MAIN BODY
LO1
P1 Macro environment
It is very important for the company to analysis the factor which are influencing the
company and according to these factors the company will be able to take decisions for
themselves. Analysis of the political, economic, social and technological are the macro
environment's factors which have to be studied by Tesco so that they can make decisions for the
company accordingly (Lahtinen, Kuusela and Yrjölä, 2018). There is always a lot of pressure on
the company to make decisions by the stakeholders of the company and accordingly the
company will have to make decisions. The further report is the analysis of Tesco in detail for the
better understanding.
Political Factor
The political factors of the company is not letting the company to expand itself though
the political factors as of now are very much in favor for the company to expand itself. The
political factor of the country is making the company get an opportunity to expand which will
make the company have a competitive advantage in the market. Taxes are high for the company

to invest and will need a lot of investment which the company can afford since they have a free
cash flow in the company. Trading for the company has become better and the company is
making a lot of profit with that factor because the political factors keep changing all the time and
the company must make the most from the political factors.
Economic Factor
Tesco has given a lot of unemployed employees jobs therefore the countries GDP has
increased rapidly (Sparks, 2019). There was a recession in 2009 which made the country face a
lot of problems and this company made them get there confidence back and make the country
rise up again. Over the years the company has gained a lot of confidence on the customers and
now the customers are choosing their products also wisely therefore the company is making a lot
of profit. There is a free flow of cash in the company which they can use wisely for their
development and that will help the company to become even more famous within the customers.
Social Factor
The company has noticed that the people above the age 65 years they tend to eat less and
also not go to supermarkets so the company has come online so that they can get more customers
in the company. There is a growth in technology which is a major reason for the people to not go
to the supermarket and call for the products they require directly at home which will consume the
customers time. Tesco has only targeted places which will make the company get a name for
itself in the market because of the attitude and belief of the customers. There are 65% of the
population of United Kingdom who are loyal to shopping and the advantage over this fact has
been taken by the company which is they are had a one-to-one contact with the customers and
that is very important for the company's. The company is trying it's best to solve all the problem
which the customers are having so that the company can become the best in this field (Um and
et.al., 2018).
Technological Factor
There were a lot of problems which the company was facing with the customers because
they were being able to solve those and now because of the technological factors which have
improved the company is making a great advantage in the market. There are a lot of
technological development in the company so that the sales could increase by meeting the
demands of the cusotmers (Taneja, Pryor, and Hayek, 2016). The technology in the company
will make the labor become even more comfortable with the company so that they do not want to