Business Strategy for Tesco: Impact of Macro Environment, Internal Environment Analysis and Strategic Planning

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Analyse the impact and influence of the macro environment on the Tesco...........................3
TASK 2............................................................................................................................................5
Analyse the internal environment and capabilities of Tesco..................................................5
TASK 3..........................................................................................................................................10
Evaluate the competitive forces with the use of Porter's Five Forces model.......................10
TASK 4..........................................................................................................................................11
Application of theories, concepts or models, devise and interpret the strategic planning for
Tesco. ...................................................................................................................................11
CONCLUSION .............................................................................................................................14
REFERNCES:................................................................................................................................15
Books and Journals:..............................................................................................................15

INTRODUCTION
Business Strategy can be understood as a set of decisions or course of actions which help
businessman to accomplish specific business objectives. It can be recommended as a master plan
which is implemented by the management of company to gain competitive benefits in the
marketplace, managing business operations, satisfy the customers and get the desired ends of the
company (Cahyo, 2019). Tesco is a British multinational company which is headquartered in
Welwyn Garden City, London. This is a general merchandise retailer founded by Jack Cohen in
1919. It has allocated their operations in more than five countries and becomes the market leader
of groceries in UK. It has expanded their business into many areas such as retailing of toys,
clothing, books, internet services, telecom and many more (Varadarajan, R., 2018). The report is
consisting different frameworks such as PESTLE, SWOT, VRIO. Porter's Five Forces model and
theories to assist company to make successful strategic decision.
TASK 1
Analyse the impact and influence of the macro environment on the Tesco.
According to Rahman (2020), Pestle framework of any company helps to analyses the
brand on its business tactics. Pestle analysis of Tesco aims to explore various factors such as
political, economic, social, technological, legal and environmental factors that affect the business
today. It also supports to understand the market dynamics and enhance the business day by day.
Political factors:
Tesco is a British multinational retailer that operates their business in different countries
including Ireland, Poland, China, Malaysia, Hungary and many more. The home market of the
Tesco is UK where political factors are stable but after Brexit, the company face lots of
uncertainties (PESTEL analysis of Tesco, 2020). Like the UK country, the respective brand
operates in other countries as well where markets are politically stable. Many companies
including Tesco, battling to gain a suitable ground to sale their products and services due to US-
China trade war. Hence, it can be analysed that Tesco is capable to respond the present and
future legislations and able to modify the business and market strategies accordingly.
Economic factors:
Due to the Covid-19 pandemic, the global economies have been badly affected. It is
assumed that due to the pandemic many people's income has been go down and may lose their

jobs. This may affect the economy as people go for cheaper brands and spending less than usual.
In context of Tesco, this severely affect the business operations and income (Bates, N., 2020).
Besides, high labour cost specifically in Ireland and UK where Tesco spends millions of pound
every year. Therefore, the organisation needs to keep close eyes on the economic changes that
happen in the countries, since these factors such as sales, revenue, profit, distribution and many
more will affect the company. Most importantly it must be aware about the taxation policies for
its own advantages.
Social factors:
Because of the fact pace of life, customers like to purchase everything in one go which
influences bulk buying. The respective company is also planned to fulfil such needs. Tesco has
switched from big food goods to food cum non-food model. These choices of products may also
influenced by the cultural variables. In the past few years, Tesco has taken a range of initiatives
to react social changes and demands. For example, due to high demands, the brand sells kosher
products to Jewish customers (Ganeshan, Shadangi and Mohanty, 2018). As the demands of
particular products like meat or chicken rising, demand for vegan or vegetarian foods is also
increasing in European markets which provide the Tesco with better opportunities to grow.
Technological factors:
As the trends have been rapidly changing, it is vital to stay relevant in the present times.
It is fundamental for any firm to keep updated with advanced technologies. So the Tesco has
been experimenting with several aspects and which is reason for achieving the success. In the
past recent years, Tesco has been greatly benefited due to the technological up-gradations and
advancements. In 1995, the Clubcard has been founded by the brand which improves the sales
and profits of the Tesco. Clubcard is a loyalty card which is used by millions of customers in UK
and other countries. Apart from this, the check points or self service support customers with ease
and helps Tesco with reducing costs.
Environmental factors:
Tesco operating business in UK, EU and other countries facing immense pressure from
governments to address issues regarding environment. Local public also put pressure who are
concerned about environment. As the company has undertaken many initiatives to reduce and
remove the use of plastic products to the least level and grab more opportunities to use the