SWOT Analysis of TESCO: Internal Factors and Strategies

This report provides a comprehensive SWOT analysis of TESCO, focusing on its internal factors and strategies. It discusses the strengths, weaknesses, opportunities, and threats of the company and explains how it utilizes its strengths and opportunities. The report also explores the impact of key drivers on marketing and HRM functional areas.

GLOBAL BUSINESS
ENVIRONMENT

EXECUTIVE SUMMARY
In this report SWOT analysis which are the internal factors affecting TESCO
company is explained, the importance of this strategical tool in overall planning and
formulation of various strategies for company. This report also discussed how internal
factors play a significant role in company's overall success and implementation of
various strategies to combat the threats and weakness. It elaborates how TESCO has
utilized the strengths and opportunities to its utmost use for increasing the production
levels. This report also explained factors on how the key drivers have affected
marketing and human resource management functional areas in company.

Table of Contents
INTRODUCTION...........................................................................................................................4
SWOT ANALYSIS.........................................................................................................................4
DRIVERS AFFECTING TWO FUNCTIONAL AREAS............................................................7
REFERENCES............................................................................................................................10

INTRODUCTION
Swot analysis can be understood as a framework used to evaluate company's competitive
position and to develop the strategies keeping the strengths,weaknesses , opportunities and
threats in mind. Tesco has been taken as the company for understanding SWOT analysis,the
internal factors affecting its business management strategies with the growth of future
potentialities. It also explains the impact of key drivers on two important functional areas such as
marketing and HRM.
SWOT ANALYSIS
The Swot analysis framework explains TESCO as a global retailing powerhouse
and portfolio of retail brands that offer food and other comfort living items in countries all
over the world in different formats, including large online retail stores (Düking,
Holmberg and Sperlich, 2018 ).The internal factors which are strengths, weaknesses,
opportunities and threats in context to Tesco are explained in detail to examine how
company can enhance its productivity levels keeping the profit margins.
Strengths:
 Tesco can be considered as one of the largest profitable retail supermarket in the
world with significant enormous cash reserves and a wide range of products and
services to offer all customers.(Hague, 2019.)It has created a brand equity and
goodwill among customers with global recognition in satisfied products and
services in terms of quality inUK retail industry.
 The various stores of TESCO appeal to local and cultural needs, helping it offer
the best quality products and enable superior quality of service experience for all
customers. It has improved the use of technology throughout its operations,
creating cost efficiencies and enhanced services by formulating clear business
strategies.
 Tesco aims to provide an improved long term consumer loyalty and its core UK
businesses in order to develop shopping experience for all customers and
spreading its stores worldwide.

 Tesco believes in keeping a commitment of quality and to provide a high value at
affordable low prices which makes it extremely clear that the primary focus for
company is their customers.
Weaknesses:
 With expansion in market growth some subsidiaries of TESCO are vulnerable to
external factors affecting their growth and pricing strategies which affect their
market sale and the global credit crisis has also impacted its market largely
(Gürel and Tat, 2017.).
 Competitive price pressures have led to price wars that have led to erosion in the
profits margins of TESCO and relating the consumer market which has less
disposable income and also affects by various price behaviour theories.
 The retailer is highly dependent on its internal UK marketplace for its sales and
has not spent the time and resources on increasing the market globally which
affects its presence at a global structure and thus limits the growth of brand.
Opportunities:
 There are various opportunities of collaboration in form of strategic alliances with
other brands and companies to offer more attractive products and services in
increased demographical target markets.
 The countries where stores are underperforming ,TESCO can go for joint
ventures in which local companies can collaborate along in market research and
improve the performance levels.
 There is immense growth opportunity for Tesco to spread in online market
presence where customers find it easier to shop from and it can increase its
service portfolio for enhancing customers shopping experiences.
Threats:
 Competitive threats are coming from global retail emerging brands who offer new
variety of products and lower competitive prices with satisfied market in
customers and efficient market supply networks to move the goods faster than
TESCO because of innovative technologies.
 Increased raw materials cost is also a threatening factor for company profitability

levels which is causing to expand the supplier network in order to get good
pricing in the raw materials and thus affecting the overall pricing structure of
goods which may affect the consumer purchasing behaviour.
 Government regulations and the political landscape of country also puts a
pressure on TESCO to adhere to the new policies which require them to make
significant changes in the operating structures which adds to additional expense.
DRIVERS AFFECTING TWO FUNCTIONAL AREAS
The key drivers analysed by the SWOT analysis would affect the functional areas of
management such as Marketing and HRM in various ways for promoting the brand
name globally and furthermore affect the formulation of business strategies.
MARKETING:
 Strong brand image: Tesco strong brand image in the marketplace with high
consumer loyalty is a big strength for the marketing department to promote other
emerging products effectively and enable a wide range for everyone to shop
from.
 Technology: Tesco works in enhancing the technology usage for its marketing
strategies of products and services so it competes effectively with all emerging
new brands in the marketplace and emerge as the best brand when it comes to
offer customers great shopping experience.
 Social factors: Tesco has expanded its international market operations by
expanding its growth outside the UK in more than 11 countries (Vlados,and
Chatzinikolaou, 2019). It has worked on bringing new variety range of products
for all age group customers and strategically plans the marketing tools it should
utilize.
 Competition: Tesco marketing strategy aims management to reduce the cost of
purchase and operation costs, through economies of scale. Company thus
function out the marketing strategy by passing the cost advantage to consumers
and offer a cheaper competitive price for the average household in comparison
with other brands.
HUMAN RESOURCE MANAGEMENT:
 Government regulations: Tesco human resource management function out its

policies for all the workforce working in company for an enhancement in the
production and performance in organization working. It promotes effective
performance appraisal techniques to keep the morale of people high.
 Productivity: Tesco aims at hiring qualified and high skilled workforce for
reaching the production targets effectively, and enable a long-term establishment
in market. Proper training and advancement in technology up-gradation should
be given to compete with other brand names.
 Decreasing Threats: Tesco works on promoting team work and provides an
environment for creative problem solving and innovative solutions for each of the
organizations problems (Vlados,2019).Efficient communication skills and
collaboration in workforce allows them to provide the best quality services for the
company.
 Company performance: Tesco awards its employees for higher performance in
the organization. The agenda of the form in implementing proper human
resource policies is to keep higher satisfaction levels and better commitment in
the employees of company which thus has an impact on goodwill of company
too.

REFERENCES
Books and Journals
Düking, P., Holmberg, H. C. and Sperlich, B. 2018. The potential usefulness of virtual
reality systems for athletes: a short SWOT analysis. Frontiers in physiology
9 .p.128.
Gürel, E. and Tat, M., 2017. SWOT analysis: A theoretical review. Journal of
International Social Research 10(51).
Hague, P . 2019. The Business Models Handbook: Templates, Theory and Case
Studies. Kogan Page Publishers.
Vlados, C. and Chatzinikolaou, D., 2019. Towards a Restructuration of the Conventional
SWOT Analysis. Business and Management Studies 5(2), pp.76-84.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy
and Management.
Online
Bhattacharya B. 2017. Human resource management. [Online]. Available Through:
<https://www.keka.com/5-major-functions-human-resource-management/>.