Competitive Strategy

This report covers SWOT analysis, Pestle Analysis and porter's five force analysis of TESCO. It also discusses the competitive strategy of TESCO.

Competitive Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SWOT Analysis...........................................................................................................................3
Pestle analysis of TESCO............................................................................................................4

INTRODUCTION
Tesco, is a British multinational groceries and general merchandise retailer with
headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom. Company has
over 6800 stores in 14 countries and apart from Europe they are also reputed in Asian countries.
This report covers issues such as Swot analysis, Pestle Analysis and porter's five force analysis
of the company.
MAIN BODY
SWOT Analysis
Strength-
Tesco has earned the position of becoming the no. one retailer and supermarket chain in
UK. Revenue and sales of the company is higher as compared to the competitors of the company.
The operating profit of the company has increased from a margin of 28 per cent (David and
David, 2019). Company has 27 per cent share in the market which gives them the power to
dominate others. Apart from UK they have also gained popularity in the market of Ireland.
Company has different forms of stores for different type of people such as Tesco Extra, Tesco
Metro, Tesco Express and Tesco Superstores. Tesco has employed around 7,43,000 people in the
market which has helped them to gain largest opportunity maker in whole Europe.
Weakness-
Company had to close their operations from the markets of Japan and America as the
company was not able to maintain the export of the company. Apart from that they also faced
some issues which affected their image and for which they had to pay some fines as they were
accused of not maintaining their accounts and misrepresenting their profits. The prices of shares
of company reduced from 9 per cent because of the reduction in the operating profits of the
company. After Brexit their performance has been worst in the market. Company has huge
amount of debts and credit pending in the market. The cost strategy which is used by the
company is the reason behind the reduction in their level of profits.
Opportunities-
Company has the opportunity to made their presence in the online sector and start
offering the services of home delivery (Hu, Qiu and Liang, 2018). Tesco has many stores in
developing countries but if they expand their operations into emerging countries such as Turkey,

Indonesia it can be profitable for the company. In some markets the performance of the company
has not been good and to improve their market in those areas the company has the scope to come
into joint venture. As the companies which are dealing in those areas can help Tesco to improve
their revenues. If company comes into a partnership with other companies who operates on a
large scale then they will be able to gain more power and attract more customers.
Threats-
The impact of Brexit has affected the growth and profitability of the company and has
become a threat for the company. Tesco has faced a case of offering fake brand products and
they marketed those products under wood side farms for which they faced major lawsuit in the
year 2017. The company also faced a threat on social media when they launched their Christmas
ad which came to people as disrespecting their culture which affected their image in the market.
Pestle analysis of TESCO
A pestle analysis is based on the framework or tool that mainly used to monitor or analyse
the micro-environment factors that may have significantly impacts on the business performance
and efficiency of TESCO.
Political factor: Since, TESCO is based on the retailing enterprise that operates in global world.
It is major political factor influence the overall performance of TESCO. It may include stability
of nation, increase tax rats and different acts of legislation. Currently, it is still ongoing financial
instability occurs in global world (Godwin, Kalapana and Valli, 2013). In this way, Governments
always encouraging the retailer to provide new job opportunities for domestic population. On the
other hand, Tesco plays important role for increasing employment opportunities which turn to
increase demand of goods and services.
Economic Factor: It is also important factor in Tesco that they are likely to focus on profit rate,
price and other type of demands. The organization should aware about the policies change such
as taxation which affect on financial accessibility. Currently, there is still dependent in market
share of around 30-40%. For Example- Tesco has used the diversification strategy for success of
businesses. Moreover, it also declined the disposable income levels.
Social factor: there are variety of social changes occurs in Tesco, which is mainly indicating
consumer that have moved towards bulk shopping. The demand of service influenced the people
towards goods. In fact, Tesco also used the better idea for adopting accommodation of organic
items in global marketplace because many consumer concerns about health issues.