SWOT Analysis and PESTEL of Tesco

The assignment provides an in-depth examination of Tesco's business environment using SWOT analysis and PESTEL framework. It identifies the company's strengths, weaknesses, opportunities, and threats, as well as the impact of macro environmental factors such as political, economic, social, technological, environmental, and legal factors on the organization.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK3...........................................................................................................................................................3
P3 Impact of macro environment on business operations, with examples.......................................3
TASK 4..........................................................................................................................................................4
P5 Internal and External Analysis of an organization to identify strengths and weaknesses.............4
P4 Interrelation of strengths and weakness with external macro factors........................................5
CONCLUSION...............................................................................................................................................6
REFRENCES..................................................................................................................................................7

INTRODUCTION
Business Environment refers to the surroundings in which business exists. It constitutes
the sum total of all the internal and external elements which affects the business. To establish a
business in not a difficult task but to successfully sustain it in the competitive market it is
necessary to analyze all the external and internal elements present in the business(Akter, and
et.al.,2016
Under this study Tesco, a multinational food retailing company has been taken. This
public limited company deals in food and non-food products and now has prolonged its services
by providing hardware services, mobile, insurance and finance services.
This study has been conducted in order to have a detailed study of business environment.
With the help of this study, it will be easy to analyze the factors present in the business
environment. Also, the study will determine the impact of macro environment on business and
will help in identifying various weakness and strengths of an organization (Alles and et.al.,
2018) .
TASK3
P3 Impact of macro environment on business operations, with examples.
In the modern world, it is required to identify the factors present in the business which
changes according to the changing needs of customers or dynamic environment. Every
organization runs business to attain profits but it is not easy to survive in the competitive
business world; it is required to adapt changes as soon as possible (Ayios, 2018).
Business environment helps the organization to adapt rapid changes, it is described as
aggregation of all the factors i.e., internal and external that impact the business. Internal factors
are those which are present in the business, they are employees. External factors are those
present outside the business, they are political, technological changes, etc.
Tesco is a international food retailing company which was founded by Jack Cohen in the
year 1919. The company is headquartered Welwyn Garden City, UK. The company is well
known for providing food and non-food products and its prolonged services. It is ranked as the
second biggest retailer in terms of profits earned. Tesco has added its slogan ‘every little helps’
to its goals that includes customers satisfaction and better relationships. Business environment of
every organization consists of macro environment and micro environment (Crane and Matten,
2016).
Macro environment refers to those factors or outside forces that cannot be controlled by
business but have a powerful impact on the functioning of the organization. The study of this
environment is known as PESTLE Analysis. Macro environment factors helps Tesco to identify

various pricing policies of different organizations such that they can set the price of the products
according to the competitor’s price(Demil and et.al., 2015). The positive thing about this factor is
that it will define the market position of Tesco and can clearly read the customers perception
regarding the organization. The negative impact is that without proper analysis the company
might have to bear losses and may not be able to determine the competitors present in the
market.
TASK 4
P5 Internal and External Analysis of an organization to identify strengths and weaknesses.
Internal and External analysis assists an organization to determine its strengths and
weakness, in order to analyze it SWOT analysis has been used by Tesco. It is a strategic
management tool and a framework which is used by managers of Tesco to evaluate the
competitive position in the market (Goss, 2015).This analysis helps indentifying the strengths,
weakness, opportunities and threats related to business. Conducting a SWOT Analysis helps an
organization in growth and leads to success. It starts with:
Strengths: As one of the leading organization in its industry, Tesco has numerous
strengths which helped in penetrating brand-new markets. The company has leading market
share which will help in gaining a competitive position in the market(Hallward-Driemeier and
Pritchett, 2015). As, the company offers a wide variety of products it will help the company in
raising the level of profit and will offer varied range of choices. Since the company has a good
return so now it is preceding its expansion in the international market by offering product at low
prices.
Weaknesses: These are the areas where the company needs to improve upon. In Tesco
the inventory is high in comparison of the competitors, so the company will be required to raise
more capital to invest which will impact the long-term growth of the business. Tesco needs to
invest more in the new technologies which will help the company to expand (Schaltegger and
Wagner, 2017).
Opportunities: It refers to the chances which a company has to grow. Tesco has the
opportunity to grow its business by increasing the range of products. Because of the largest
retailing grocer status, Tesco provides reimbursement for its customers to grow online with
internet.
Threats: In Tesco, there is no regular supply of innovative products due to which the
market share will ultimately decline (Jenkin and Williamson, 2015) .If the company will not new
technologies present in the dynamic environment, it may act as a big threat in the long term
future.

P4 Interrelation of strengths and weakness with external macro factors.
Every organization have different goals and objective, in order to maintain competitive
position in the market, but the main objective of every business is to satisfy the needs of its
customers. Strengths and weakness of a business organization are related with macro and micro
environment factors (Schaltegger and et.al., 2016). The strangths of a company are compared
with various macro environmental factors. A abrupt change in environment can affect various
decisions taken by the business. Interrelatedness between macro environment factors with
organizations strengths and weakness are as follows:
Political Factors: It refers to when government of the country intervenes in the
functioning of an organization. These are the activities related to government which might have
affect on the performance of the company (Zur Muehlen and Shapiro, 2015). These factors are
critical for the operations of Tesco because political platform varies of every country and since
Tesco is a global company, it must follow the rules and regulations of the market in the host
country.
Economic Factors: It refers to the factors that impact the economy and includes wages,
interest rate, tax rate , policies, etc. These factors influences future investment value and are not
in direct relation with the business (Sekaran and Bougie, 2016). Tesco is directly concerned with
the economic factors since they impact the buying behavior of customers.
Social Factors: It is associated with the forces within the society which includes friends,
family, neighbors, colleagues, etc. To understand the customer it is necessary for Tesco to
develop a demographic profile of the customer so it can motivate them. As the company operates
well in different countries as the company focuses in offering the product which satisfies the
needs of customers despite of their religion, race and income level .For example: The number of
retired population is more than that of children which has reflected Tesco, since old people do
not frequently visit supermarket than that of people of young age.
Technological Factors: It refers to those innovations in the equipments and machinery
that are being used in an organization to promote business. Development and Advancement in
the technology helps the company to stay competitive. Constant improvement in technology has
played an important role in the success of Tesco as the company was able to develop its official
website which helped customers in online shopping. For example: The company uses official

application to direct the customers to buy the products, from where they can purchase their
selected product by easily sitting at home (Stacey, 2016).
Environmental Factors: It refers to the known characteristics of the environments that
impact the growth, survival and operations of the business (Tregear, 2015). In context of Tesco,
The company is trying to provide some hydrophobic materials to the packaging of the products
which will help the reusing the bags and optimum utilization of resources.
Legal Factors: It refers to all those restrictions or rules and regulations which a company
should be followed by an organization in order to trade successfully. It includes- Health and
safety, equal opportunities, consumer rights and laws, product labeling and product
safety(Trevino and Nelson, 2016).These factors directly impact the operations of Tesco as there
was the law to prohibit certain practices which were exercised by the company in which changes
were made in the prices of goods and services without giving any notice.
CONCLUSION
From the above study, it has been analyzed that a proper evaluation of business
environment must be done in order to gain a detailed knbowledge about the factors present in the
business organizations. The study also identifies various objectives which business organizations
have and also tries to fulfill the demand of customers and measure the overall performance of
Tesco with the help of SWOT Analysis and PESTEL. The report has explained various strategies
to sustain in the competitive market and has explained tools which were used to determine the
factors that affected the business both internally and externally.

REFRENCES