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[PDF] Business Environment Assignment : Tesco

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Added on  2021-03-15

[PDF] Business Environment Assignment : Tesco

   Added on 2021-03-15

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HIGHER NATIONAL CERTIFICATE IN BUSINESS BUSINESS ENVIRONMENTAL ANALYSISFABIO PELLIZZONLIVERPOOL CITY COLLEGE DECEMBER 19, 2019
[PDF] Business Environment Assignment : Tesco_1
Introduction The purpose of this assignment is to identify external factors that are outside the control of the organisation using the framework called PESTLE and analyse how the organisation can be affected by these factors. Once gathered, all information will then be combined with another framework called SWOT analysis to identify the current and future potential of the organisation. The company that will be examined is called Tesco. History Tesco is a multinational company which currently has 3.961 stores in UK (Statista 2019) and operates in 13 countries (Tescopoly 2019) which according to Tescopoly website, was the first British supermarket that expanded overseas (Tescopoly 2019). Tesco was originally created a little grocery shop in London in 1919 by Jack Cohen, but the brand did not acquire its name until about five years later. Within time Tesco began to expand rapidly, opening other shops across England. In 1930 Tesco built its own headquarters in London and in 1932 became a limited company. In 1961 one of its stores based in Leicester became the largest in all Europe, and then after only another 7 years the first Superstore was opened in Sussex. In 1974 with the opening of the first petrol station Tesco also became the first autonomous petrol retailer. With time Tesco initiated a strong campaign to overtake other competitors such as Sainsbury’s, which at that time was the leading grocery store in the market. One of the strategies that Tesco also used was the introduction of the slogan ‘’every little helps’’ in 1992. PESTLE ANALYSIS Political Factors Tesco operates in many countries, therefore the political decisions that are made in each of these countries can have an impact on the organisation, for example the changing of policies and the increases of taxes. Tesco's financial performance also depends on British political stability. It is a fact that the United Kingdom has opted to leave the European Union, and delaying the exit several times, due to political instabilities. It is known that a hard Brexit could potentially have a negative impact related to the waiting time of transportation of goods between the United Kingdom and the rest of the world, which in turn will impact on the life of fresh food such as vegetables. Another issue in relation to this will be the introduction of the customs duty which will unequivocally increase the cost of goods and food that are considered essential for human consumption. Impacts: A possible taxation on the custom duty might well discourage investors on the UK market. The current uncertain situation and constant extension of Brexit could negatively affect the whole market share, including big and small retailers.
[PDF] Business Environment Assignment : Tesco_2
Government policies can influence the interest rates of the economy, so the lower the interest rate is kept, and more investors are willing to invest money, and vice versa, the higher the interest rate is, and in turn the less customers are willing to spend. The changing of policies can be beneficial for companies that are using renewable energy like Tesco. Economic Factors This factor is one of the main points of the company, and therefore Tesco should be kept constantly updated when it comes to changes in policies such as Employment Regulation, or National Minimum Wage. With wages increasing every year Tesco needs to be able to access its own finances. According to the Statista website, from 2015 to 2019, it is shown that Tesco has maintained the level of sales market share only in Great Britain, around 30%, which is the highest compared to all the supermarkets in the market. However straight after the Brexit referendum in 2016 Sterling fell 14% against the Euro, and if that continues Tesco will have no other option than to increase their prices (The Guardian 2019). Furthermore, due to the ongoing instability of the economy this could affect the Gross Domestic Product (GDP) of the UK. Impacts: The increase in National Minimum Wage lead Tesco to raise the cost of their products. On the other hand, the employees that work for Tesco benefit from the salary increase. The constant loss of power of Sterling could trigger a recession causing loss of jobs, slowdown of manufacturing production and decreasing of customer spending. On the other hand, this could lead to the birth of other companies. Sociological and Cultural Factors One of the factors that can be relevant in our society is the changing trends regarding food ranges, with people being more aware of the advantages of keeping a healthy life style. According to the Food Manufacture website an article written by Matt Atherton says that Tesco’s organic sales in 2016 increased by 15% (Food Manufacture 2017). Another aspect that impacts on the sociological factor is the awareness of vegetarianism and veganism. According to a graphic report conducted by Google trends, between 2014 and 2019 just in UK, there is an increase interest towards plant -based food. (Google Trends 2019) Impacts: Choosing organic food that is produced on farms where pesticides and hormones are not used and also adopting working procedures that respect the environment, can have a positive impact for the environment. However, it is more expensive because of the extra time required for production, and because farmers cannot produce enough. Technological Factors With the developments in technology Tesco empowered its customers by providing an easier way for shopping by introducing online shopping in 1996 (Campaign 1999). According to
[PDF] Business Environment Assignment : Tesco_3

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