Impact of Macro Environment on Tesco's Business Strategies

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Impact and influence which the macro environment has on Tesco and its business strategies...1
LO 2.................................................................................................................................................3
Analysis of internal environment and capabilities of Tesco........................................................3
LO 3.................................................................................................................................................3
Evaluation of competitive forces by applying Porter’s Five Forces model.................................3
LO 4.................................................................................................................................................6
Models, theories and concepts to assist with the understanding and interpretation of strategic
directions available to the organization.......................................................................................6
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REREFENCES................................................................................................................................9

INTRODUCTION
Business strategy can be defined as a set of competitive strategies and actions that can be
used by an organization in order to attract customers, enhance their overall sales and achieve
organizational goals. It is extremely important for organizations to focus on developing business
strategy in order to enhance their customer base, achieve desired goals and expand their business
an appropriate manner (Akter and et. al., 2016). This assignment will focus on preparation of a
formal report on formal report on the existing strategic direction of Tesco. Tesco is a British
multinational retail store founded in 1919 whose headquarter is in England UK. They have shops
in seven countries and has employed more than 450,000 employees globally. They provide
various kinds of products and services such as books, clothing, electronics, furniture, toys, food
products, petrol, software, financial services, telecoms and internet services. This assignment
will further lay emphasis on impact of macro environmental factors on organization, analysis of
internal environment and capabilities of Tesco, analysis of outcomes of Porter’s Five Forces
model in retail sector and strategic choices and directions available to an organization.
Tesco
LO 1
Impact and influence which the macro environment has on Tesco and its business strategies
Mission: The main mission of this organization is to emerge as market leaders and enhance their
business globally (Leonidou and et. al., 2017). They are continuously focusing on bringing
improvement within their products and service in order to gain competitive advantage and
enhance their market share.
Vision: The main vision of the organization is to sell products and services that can fulfil needs
and requirements of their customers in an effective and appropriate manner.
Objectives: Main objectives of Tesco are:
 To enhance their customer base by at least 20 percent in next 5 years.
 To increase their brand image and reputation.
 To bring improvement within their product and services quality by using advance tools and
technologies.
Goals: The main goal of Tesco is to enhance their sales by at least 20 percent in order to increase
their revenue and profit. They also need to bring improvement within their business strategies so
that their can achieve their desired goal.
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Influence of macro environment on Tesco
PESTLE Analysis
There are various kinds of factors that can impact overall business of organization like
Tesco. These macro environmental factors are important to be focused on because as analysis of
these factors will help Tesco to bring improvement within their business strategy, encourage
their business activities, develop new plans in order to meet their goals and objectives (Johnson,
2016). PESTLE analysis helps in understanding impact of these macro environment factors
upon organization like TESCO. PESTLE analysis focuses on six main environmental factors:
political, economic, social, technological, environmental and legal factors.
 Political Factor: As Tesco operations in many countries, global political factors are the one
that affects overall operations of the organization. Important duty of all kinds of goods can
impact overall Tesco as more than 70 percent of inventory items are imported by Tesco from
outside UK. Government encourages retail sector organizations to create a greater number of
jobs for domestic population in order to enhance employment opportunities for people can
help Tesco is employing diverse workforce.
 Economic Factor: it consists of those factors which are related ot economic g. They include
GDP, inflation rate, currency rate, etc. Any change in these impact on business operations.
Economic factor can impact retail sector organization like Tesco in many ways. Due to
increase in minimum wages cost by 4.4 percent overall operational cost of Tesco has also
increased. Due to global economic crises overall business of Tesco has also been impacted
largely which can slow down overall business operations of Tesco.
 Social Factor: they are those factors related to change in taste and preference, Need of
customers, etc. In last 10 years shopping trend of customers has changed drastically they
either prefer one stop shopping or online shopping which has brought changes within the way
in which Tesco operates (Gattorna, 2017). They have focused on increasing non- food items
for sales within their stores, so that customers can focus on shopping at one place. Today
customers are becoming more health conscious because of which their attitude towards
unhealthy products is changing, Tesco is confusing more on organic products in order to grab
their customers attention.
 Technological factor: Advancement in technology has increased opportunities for Tesco,
with the help of this advancement in technology, Tesco has focused on enhancing their
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