Global Business Environment: SWOT Analysis of Tesco

This report provides a SWOT analysis of Tesco, examining its strengths, weaknesses, opportunities, and threats in the global business environment. It also discusses the impact of key drivers of change on the company's functional areas.

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Swot analysis...............................................................................................................................3
Impact of key drivers on the functional areas of the company....................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The business environment of the companies that are operating at global levels is complex
and intricate where there are many potential factors that can affect the company or its business
(Fatricia, 2017). In the present report, a SWOT analysis of Tesco will be presented and the
impact of the key drivers of change that were identified earlier will also be identified.
MAIN BODY
Swot analysis
Based on the pestle analysis that was done in CW1, it can be adequately said that the
company Tesco is operating in a comparatively much favourable environment and has positive
attributes. Now further, in order to analyse the business organisation and their policies in a better
manner, Swot analysis can be prepared for the Tesco Plc:
Strengths
 The geographical diversification that
Tesco has been able to generate from
its operations is one of the biggest
strengths of the company. Tesco is
right now operating in more than 14
countries and the number of stores
near to 70000 which is a huge number
to boast (Tesco, 2020).
 The company has the leading market
share in the retail industry amongst the
four major competitors in the super
market or retail industry of UK. The
current share is 27% and recently the
company was announced to have
become the most popular retail store
in Ireland as well (Tesco, 2020).
 The product range of the company is
extensive and very wide that makes it
possible to attract an extremely wide
Weaknesses
 The company is not able to operate
successfully in Us and Japan as the US
already had their own super market
retail store Wal Mart. The operations
of the company failed immensely and
this led to the closing of the stores
ultimately.
 The operating profits of the company
have been declining steadily where the
shares of the Tesco have declined by
an estimated 9% in the recent times
(Tesco, 2020). After the Brexit, the
company has been affected severely
and the company was hit immensely.
 Although Tesco has been a low cost
leader in the retail industry but in the
long run, this can prove to be gullible
strategy where the company can lose
its market value ultimately
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range of customers in the company
and to cater to their individual needs
separately.
(FATRICIA, 2016).
 There have been many controversies
in which Tesco has been regularly
involved amongst which modification
of the Clubcard controversy was the
most weak point for the company.
Opportunities
 The recent brand that has been
launched by Tesco i.e. Jacks Business
is the discount store and it can help in
significantly increasing the growth
especially with the major competitors
of the company i.e. Aldi and Lidl.
 The joint ventures and strategic
alliance is another major area that can
be explored by Tesco so that the local
companies can benefit and the overall
benefit that will be reaped in by Tesco
will be imminent. They will increase
their goodwill and revenue at the same
time (Sarathe and et.al., 2018).
 Online shopping and increased
presence on the digital platforms is
another strategy that Tesco should
adopt in order to enhance the virtual
presence and reach of the company.
 Emerging markets is another area of
opportunity that can be tapped by the
Tesco company and this will enhance
the expansion at international level as
Threats
 The Brexit has proven to be a major
threat for the company where it has
been losing its market share and the
number of customers that will be lost
is also significant (Gunjal, 2017). The
trade deals and costs can see a major
rise in the coming time and therefore
they need to develop correct strategies
as soon as possible.
 The economic upheaval that is
imminent and the resulting credit
crunches are bound to affect the
operational efficiency of Tesco and
the only measure is to minimise this as
much as possible.
 The different controversies such as
Christmas ad controversy or the fake
farm controversy were the major
issues that Tesco faced and these must
be prevented at all cost (Peng, 2018).
These results in loss of reputation of
the company and the customers are
lost as well.
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well.
Impact of key drivers on the functional areas of the company
The key change drivers that are affecting the Tesco have been identified as use of innovative
technology and incorporating efficiency at a global level. These will affect the two major
functional units of the Tesco which are:
 Operations Department: The operations department will be affected by the technology
update in the organisation and this will affect the working of the operations department.
The activities that are performed in the operations department are mainly related to the
production and manufacturing of goods. The incorporation of innovative technology will
lead to the increased output in the company and the costs will also reduce significantly
(Bouzembrak and Marvin, 2019). All over this will lead to improvement in the existing
operational activity levels of the company. Additionally, improvement in the
technological aspect will also lead to better efficiency of the company where they will be
able to improve the overall revenue generation abilities.
 R&D Department: The technological innovation and its implementation cannot be
undertaken without the assistance of Research and development department in a company
and for Tesco the increased innovation implies increased work and duties for the R&D
Department. They will have to constantly evaluate the different aspects related to the
activities that are being performed and the manner in which technology can be updated
and improve (Robins and et.al., 2016). The efficiency will automatically rise for the
company when the research and development activity will rise as this will lead to a better
identification and tapping of the potential opportunities that are presented before Tesco as
a company.
Both the departments of Tesco will hence be affected in this manner where the ultimate
impact would be increase performance and results for the company.
CONCLUSION
The research conducted in the report above helps in concluding that the internal analysis i.e.
Swot Analysis of Tesco shows that the company is very well developed and the opportunities
that can be successfully tapped are immense. The impact of change driver on the operations and
R&D functional units of Tesco was analysed concluding that the benefits would be immense.
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REFERENCES
Books and Journals
Fatricia, R.S., 2017. STRATEGIC ANALYSIS OF TESCO SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan. 6(02). pp.69-86.
FATRICIA, R.S., 2016. SWOT ANALYSIS OF SAINSBURY’S SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan. 5 (1).
Sarathe, A., and et.al., 2018. Recent Trends and SWOT Analysis of Food-Processing Industry
Infrastructure in India: A Review. Bull. Env. Pharmacol. Life Sci. 7. pp.107-116.
Gunjal, T.D., 2017. A SWOT ANALYSIS AND RECENT FDI CONTROVERSY OF RETAIL
SECTOR IN INDIA. International Research Journal of Multidisciplinary Studies. 3(4).
Bouzembrak, Y. and Marvin, H.J., 2019. Impact of drivers of change, including climatic factors,
on the occurrence of chemical food safety hazards in fruits and vegetables: A Bayesian
Network approach. Food control. 97. pp.67-76.
Robins, P.E., and et.al., 2016. Impact of climate change on UK estuaries: A review of past trends
and potential projections. Estuarine, Coastal and Shelf Science. 169. pp.119-135.
Peng, S., 2018, November. The Status and Countermeasures of Rural E-commerce in Shandong
Province Based on SWOT Analysis. In 2018 International Conference on Economy,
Management and Entrepreneurship (ICOEME 2018). Atlantis Press.
Online
Tesco. 2020. [ONLINE] Available through :< https://www.tescoplc.com/>
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