Global Business Environment: Swot Analysis of Tesco Company

This report analyzes the global business environment of Tesco company, including a Swot analysis. It discusses the strengths, weaknesses, opportunities, and threats faced by Tesco in the market. The report also examines the impact of the internal environment on the functional areas of the business.

Global business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Swot analysis on the basis of Tesco company........................................................................3
Impact of the internal environment on the functional area of business.................................4
Conclusion.......................................................................................................................................5
REFRENCES...................................................................................................................................6

INTRODUCTION
The report is based on the global business envioprmnet of the Tesco company. It is a British
multinational grocery and retail company. It was established in 1919, and currently, it has it
headquarter in Welwyn Garden City, Hertfordshire, England. In terms of gross revenue and
earnings, TESCO is one of the top leading companies in the world, and also in Britain as well.
Swot analysis on the basis of Tesco company
Strengths
TESCO has captured the British market in the real sense in terms of revenue. However,
it’s the top retail grocery store and supermarket in the UK. In the year 2018/19, its annual
revenue was 63,911 million pounds both in the UK and Ireland combined. Its annual profit has
risen by approximately 11% in 2018/19. Tesco offers diverse and variety of products and
services to its employees across the world like telephonic and financial services, rental DVDs,
clothes and school uniforms, mobile phone accessories, home, and ware items and cotton fair
trade business worldwide.
The other reason for its popularity among the public is that TESCO has been creating
more and more job opportunities for people. It has employed roundabout 500,000 worldwide,
and it has offered 743k job opportunities so far. Some also claim that TESCO is the largest
private job provider in Europe.
Weaknesses
Tesco’s profit is seriously affected because of high credit card debt. Companies use debt for their
advantage by increasing the profit if debt reduces your profit. Then it means you aren’t using the
debt rightly. The operational performance of certain stores of Tesco in some countries has
always been low, which shows that the marketing department isn’t doing sufficient ground
research before opening up stores.
The Brexit referendum has been affecting the performance of the company, and Tesco is
making less profit because of it. Therefore, the market share price of the company has fallen by
approximately 9%. It is not good news, because it wouldn’t attract new investors. Tesco has been
following the business model of low-cost strategy, which is to offer products and services at a
low price to its customers. But this strategy is costing the company in terms of low profit.
Opportunity

Tesco has launched a new discount store by the name of Jacks, and it has been
performing well. The company should invest more in it because it has the potential to grow and
compete with low-cost rivals like Lidl and Aldi. Tesco has a mobile app for online shoppers, it
should upgrade the app and add the feature of home delivery. It would attract more customers
towards Tesco. Tesco has been partnering up with other brands in pursuit of development. The
purpose is to come up with better products and services to facilitate customers better. There are
few Tesco’s stores in some countries that aren’t performing well. If it partners up with the local
businesses and learn the knowledge about the local market, then its performance can move up the
graph. Therefore, Tesco should take it as an opportunity and partner up with local businesses.
Threats
National economic factors like taxations, credit, government rules, and regulations are a
serious threat to the development and performance of Tesco in some parts of the country. The
company has to be very creative to counter such threats. The British exit from Europe also goes
by the short name of Brexit. If this trade deal happens, then it’d have a serious impact on the
business of Tesco. It is because Tesco has been running its business operation in many European
countries. Giant supermarkets like Walmart, Carrefour, and Aldi are some of the main
competitors of Tesco, and they are also growing.
Impact of the internal environment on the functional area of business.
The impact of the changing environmental factor on the department of business are have a
major impact on its marketing and on the finance departments.
Marketing
Tesco manager helped to extend a succession of supermarket from being an unbeneficial
“also ran” to being market leader with a 33% market share and a 4% base line. Tesco manager
keep together teams of consultant that had developed all the strategies that Tesco and the
worldwide leading retailers supermarkets. Tesco flow the retail strategy into their market to find
out who their customers are, what they want, but above all can actually deliver consistently to the
customer.
Finanace

Tesco Plc. had statutory loss of GBP 6.4 billion and this had pushed
the amount of its net debt to GBP 8.5 billion[7]. Moreover, the total
leverage debt of the company has reached GBP 22 billion.[8] As it is
illustrated in Figure 3 below, although the volume of profit before tax
has been consistently declining during the last four years, the decline
during the last financial year was the most severe, reflecting the
consequences of accounting wrongdoings revealed in 2014.
Conclusion
The information taken out from the above report states the analysis of different modal in the
organisation as Tesco is undoubtedly a very big multinational brand. But its competitors are also
big and growing aggressively. Therefore, it should take advantage of as many opportunities as
possible. The company should resolve legal issues and clear its brand name from all the legal
proceedings, and come forward as clean. So the people can trust the brand name again.

REFRENCES
Books and Journals
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competitive business environment. The Journal of Development Studies, pp.1-18.
Contractor, F.J., Dangol, R., Nuruzzaman, N. and Raghunath, S., 2020. How do country
regulations and business environment impact foreign direct investment (FDI)
inflows?. International Business Review, 29(2), p.101640.
Stibe, A., 2020. Transforming Technology for Global Business Acceleration and Change
Management.
Atiku, S.O. and Fields, Z., 2020. Multicultural orientations for 21st century global leadership.
In Multicultural Instructional Design: Concepts, Methodologies, Tools, and
Applications (pp. 1-24). IGI Global.
Arrieta-Paredes, M.P., Hallsworth, A.G. and Coca-Stefaniak, J.A., 2020. Small shop survival–
The financial response to a global financial crisis. Journal of Retailing and Consumer
Services, 53, p.101984.