Global Business Environment: SWOT and PESTLE Analysis of TESCO

This report analyzes the impact of the global business environment on TESCO through SWOT and PESTLE analysis. It examines the strengths, weaknesses, opportunities, and threats of TESCO and evaluates their influence on functional units. The report also discusses the effects of PESTLE analysis on marketing and operations.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
SWOT analysis of TESCO..........................................................................................................3
PART 2............................................................................................................................................4
Evaluation of impacts SWOT and PESTLE factors holds over functional units of TESCO......4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Global business environment is affected by various factor which have both positive and
negative impacts on the organisation operating internationally. In marketplace many tools and
frameworks are introduced by researcher to analyse the impact of external business environment
such as PESTLE and SWOT. In this report SWOT analysis of TESCO is performed also, the
influence SWOT and PESTLE have over functional units are considered.
PART 1
SWOT analysis of TESCO
SWOT analysis is a framework is used by marketers or marketing managers on behalf of
company in order to learn about the strong and weakening elements of organisation. SWOT
analysis is made of four factors, out of which two are internal and other are external. These
components are as follows: Strengths refers to those areas in which organisation excels and these strengths of
company makes it unique and separates it from other competitors. In other words,
strengths are those areas and elements which enables entity to attain competitive
advantage (Hamilton and Webster, 2018). Weaknesses of any company are the sections in which it lacks and affects its
performance. The weaknesses of every company becomes a barrier in their path of
achieving all predetermined goals and success. Opportunities are the new chances entity have to enhance their practices and operations
by effectively make use of those opportunities and gaining advantages in marketplace.
These are the favourable external factors which help company to grow and provides
competitive advantage.
 Threats are those external factors which exist within companies external environment
and imposes potential harm over company. These threats have to be measured earlier and
actions have to be taken for mitigating its effects before they prove to be harmful for the
entity.

STRENGTH WEAKNESSES
 TESCO is the biggest employer in UK,
creating new job opportunities for
locals of area in which the company
have their stores (Schandl and et. al.,
2018).
 The company has several stores and
operating in different countries.
TESCO has huge market share and
serves to worldwide customers.
 Lack of market research leads to
failure of operations in certain market,
which affected the business overall
performance.
 TESCO uses low cost strategy which
is affecting it business, although
company is price leader still its profit
margins are getting affected due to low
cost strategy.
OPPORTUNITIES THREATS
 Most effective opportunity every
company have is making strategic
alliance with other organisations.
TESCO can use this opportunity to
enter new market.
 Another opportunity which exist for
TESCO is to increase and upgrading
its online shopping services and also,
introducing home delivery services.
 The competition is increasing regularly
in retail industry which possesses great
threat on market position of TESCO
(Epstein, 2018).
 TESCO was accused of fake brand
image and marketing of its food
products, which leads company towards
several legal threats.
PART 2
Evaluation of impacts SWOT and PESTLE factors holds over functional units of TESCO
TESCO is a retail organisation having large operations and in order to run business
effectively tasks are divided into various departments. These functional units have their unique
roles and responsibilities but their actions are affected by external and internal factors which are
associated by the company. Influences SWOT and PESTLE factors have over functional units
are discussed below:
Impacts of SWOT analysis on functional units of TESCO

Human resource management- One of the biggest strength of TESCO is the employment
opportunities it generates for people. TESCO has large operations, nearly 7000 stores in the
whole world through these they generate huge job opportunities for local people. This will
impacts the HRM unit of company, fresh talent will enter the firm with their new and unique
talents (Yuesti and et. al., 2018). Also, HR managers have to increase their actions for motivating
staff as different individuals are involved in company having separate personalities. They have
conduct training and development actions regularly for introducing new appointees to company
and updating knowledge of existing employees.
Research and Development- TESCO is operating in number of locations and in very different
markets who are separate from one another. The research and development task becomes more
complicated here they have to conduct thorough research of markets in which company is
planning to expand their operations. The research and development department lacks in
performing their tasks effectively which is becoming a weakness of TESCO and company
operations are getting affected due to it. By conducting SWOT analysis this weakness of
research and development department is highlighted and TESCO now taking measure to mitigate
its impacts.
Impacts of PESTLE analysis on functional units of TESCO
Marketing- The company is operating in several market of different countries, in which they
follow separate cultures, beliefs and values. The taste and preferences of population differs and
varies from one another with changing geographical areas. The marketing team job is to promote
the offering of company and develop its brand image. Marketing department have to take
measure and conduct market research in order to make effective marketing plan for specific
geographical area. For researching marketplace, gaining knowledge about its motivating and
attractive factors PESTLE frameworks helps the management and enables them to make
appropriate plans by which they can present TESCO correctly in front of population.
Operations- TESCO is operating in around 12 countries having almost 7000 stores and each
store is in diversified location (Cepel and et. al., 2018). By conducting PESTLE analysis the
company can gain knowledge about the legal and economical condition of the country which
enables them to make their operations accordingly. These operations which company develops
for smooth running of their store will be in accordance with the rules and regulation imposed by
the government for staying sway from any kind of legal fee and penalties.

CONCLUSION
The above report is based on the effects SWOT and PESTLE analysis have over the
business operating on global level or in international waters. The SWOT tool enables company
to know all the areas in which company lacks and excel and by whom they can attain
competitive advantage in marketplace. Functional units of organisations gains better knowledge
of their marketplace and development understanding of performing their tasks effectively and
efficiently in order to attain organisational goals and objectives.

REFERENCES
Books and Journals
Cepel, M. and et. al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness. 10(2). p.21.
Epstein, M. J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Schandl, H. and et. al., 2018. Global material flows and resource productivity: forty years of
evidence. Journal of Industrial Ecology. 22(4). pp.827-838.
Yuesti, A. and et. al., 2018. Challenges of Bali Economic Export Development in Changing
Global Environment. International Journal of Contemporary Research and Review.
9(01).