External Environment Analysis of a Business Organisation: A Case Study of Tesco

This essay explores the significance of analyzing the external environment for business organizations, focusing on the impact of political, economic, social, technological, legal, and environmental factors. Using Tesco, the leading retail supermarket chain in the United Kingdom, as a case study, the essay demonstrates how the PESTLE model can be applied to understand the external forces that influence a company's operations and profitability. The essay highlights the importance of considering these external factors in developing effective business strategies and adapting to changing market conditions.

External Environment of a Business Organisation
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Conclusion.......................................................................................................................................5
Reference List..................................................................................................................................6
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Introduction
In any business organisation, monitoring the external environment is highly essential to
understand how the external factors affect the ongoing practices of the organisation. The external
factors can be political, social, legal or economical that can cause from various stakeholders or
the current government of the place where the company resides.
This essay is will mainly showcase how the external environment of an organisation affects its
daily operations and results both positive and negative impact. This essay will mainly shed light
on PESTLE as a model and in relation to TESCO, the largest retail store in UK.
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Discussion
Tesco is the leading retail supermarket store chain the United Kingdom. Its primary aim is to
serve the customers with the best variety of food products, merchandise and clothing, at the most
affordable prices. The organisation has more than 2000 stores in the country serving to millions
on a daily basis (Tesco.com, 2018). Being such a large-scale organization the company
experiences external environmental effects that bring changes to the way they operate. PESTLE
is a model that is used by various business organisations to analyse the external environment and
factors of the organisation due to which changes occur in their ongoing practices.
For an organisation like TESCO, it is highly essential to analyse the factors that affect the
business and results in fluctuating their overall profits (Tesco, 2018). PESTLE analysis helps in
focusing on the factors like- political, social, economical, technological, legal and environmental
(2012books.lardbucket.org, 2018). Being in Britain, the company faces serious political
instability, especially after BREXIT. To understand how the company is affected from these
external factors a PESTLE analysis is essential. Britain’s legislature states various Acts that
safeguards the rights of the employees and customers. They focus on empowering employees
and are considered under the legal and social factors that affect Tesco in various ways.
The external environment of the company results in changing their annual objectives and initiate
change management strategies for the companies (Indiana.edu, 2018). The model is helpful for
Tesco to realise the social and environmental factors that enables the organisation to look for
eco-friendly ways to conduct their regular practices. Pestle helps in understanding the cross-
functional skills and expertise that area required in any organisation to explore various
opportunities in the market, both at domestic and international level. To understand the various
external factors affecting the said company Pestle is considered the best model to analyse the
organisation.
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Conclusion
External environment analysis for any organization can be related to the stakeholders of the
organisation. It comprises customers, financial investors, government and the laws, the climate
and the technological changes.
It has been observed through the easy that the external environment of any organisation is
essential to understand the various changes that often arrive in an organisation. Tesco has been
discussed and PESTLE as a model has been aligned to the company. It can be concluded that
business and marketing procedures of any organisation depends on the social, legal, political and
technological factors
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Reference List
2012books.lardbucket.org. (2018). Evaluating the External Environment. [online] Available at:
https://2012books.lardbucket.org/books/strategic-management-evaluation-and-execution/s07-
evaluating-the-external-enviro.html [Accessed 3 Mar. 2018].
Indiana.edu. (2018). Cite a Website - Cite This For Me. [online] Available at:
http://www.indiana.edu/~jobtalk/Book-Excerpts/chap02.doc [Accessed 3 Mar. 2018].
Tesco.com. (2018). Tesco - Online Groceries, Homeware, Electricals & Clothing. [online]
Available at: https://www.tesco.com/ [Accessed 3 Mar. 2018].
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