PESTEL Factors Affecting Tesco PLC

This report analyzes the PESTEL factors that affect Tesco PLC, including political, economic, social, technological, environmental, and legal factors.

PESTEL FACTORS
AFFECTING TESCO PLC

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Organisational business environment is total sum of internal and external factors. These
two factors influencing on business to work together. Some of the external factors are beyond of
control. They are divided in political, economical, social, technological, environmental, legal.
This report is based on TESCO a British multinational groceries company, founded in 1919 by
Jack Cohen. It is first appeared in 1924 after purchased from Cohen. This retailing company is a
second largest retailer company which considering revenues. It also provides finance, insurance,
hardware services. The main purpose of this assignment is to analysis external factors that effects
came on dynamic and unpredictable environment. By identifying these factors their impact came
on company performances.
MAIN BODY
PESTEL analysis is a frame work to identify it in dynamic and unpredictable
environment. This identification lies on TESCO performances and evaluation tool used for
critical analysing business environment.1. Political: Government plays a vital role in influencing performance of Tesco. Their
involvement is made in a form of trade control, health and safety law, tax rates, stability
of country, new legislation. Managers of an organisation reduces risk and losses in which
they are related with changes. Their direct and indirect support includes fiscal policy
which are linked with taxes provided to company. Business organisation is dealing with
spending money on buying new and better products from that they can issue loan from
government according to their affordable price . However , they make a great effect with
an interest rate. Changes in government intensively impact on policies, culture, stability
of items, maintaining law and order etc. Competitive market sufficiently changes by
shifting demands and cost of production. The investment made by company requires
increases in taxes or borrowings. Policies impact came on interest rates, rising in cost of
borrowings in business community. Tesco leading with lower interest rates, in which they
attract on increasing production. Fair and effective regulations are made in promoting
business growth.
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2. Economical: This factors are concern with most likely use of leverage costs, demand ,
profits and prices. An organisation is focusing on consumer needs and wants by
identifying market utilities. Due to rate of inflation which impact came on prices and
domestic utilities. Tesco is dealing with an inflation rate when the interest rate is lower,
in which person has to rely interest on their saving. Their are five factors in which
business is affected due to inflation, unemployment, foreign rates, interest rates, supply
and demand. Economically, high rate of rising prices lead higher borrowings for
business. People need loans and mortgage for protecting financial markets trends.
Business uncertainty lead with lower level of capital investment. Tesco company effects
made on their real standard of living. Due to inflation, there is decrease in purchasing
power when rising of terms came across the economy. Company has to work for growth
in an order to reduce inflation in an economy for enhancing market place.3. Social: These are the factors, in which consumers demanding on goods and services in
social conditions by their consequent attitudes and beliefs. Nowadays, consumers are
more aware of health issues and towards their tastes and preferences on changing foods.
TESCO opt product mix in increasing their demand for organic products. Increasing rate
of emigration takes place in many reasons either in positive or negative ways, demanding
on state economy. Socially, persons are tends to benefit from available workers. They
contribute in an economy by spending money. Changes occur in behaviour of an
individual generates conflicts regarding immigration policy. TESCO employees dealing
with complicated matters regarding either with short term objectives and long term goals.
Person is based on characteristics like language skill, class, evidence of the role played by
variables in different objectives. Migrants are mostly in working age. Their are variety of
social changes which company opt by demanding for organic product. The population in
ageing group brings disadvantages to company because they eat less. Apart from that
younger generation travel to supermarkets by comparing shops. Migrant customers
attitudes are changing day by day in demand for their organic food, so by this company
accommodated by changing demand. TESCO is the first who make possible to provide
payments either paid by cash or cheque.4. Technological: An advancing technologies has leading with new opportunities in
TESCO. In this, technology plays a vital role for developing facilities in online shopping
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with home delivery of products. By this support, it is helpful to provide convenient to
customers and reducing costs of labour. Company has invested amount for gaining
efficiency by fulfilling long term objectives. New technologies benefits are provided to
customers and company. The upgraded and new technologies are their for rising
customer satisfaction because of an availability of goods and services. The company has
opt to introduced programs in discouraging customers which switching to competitors.
Nowadays, online retail shopping has gained popularity by increasing use of broadband
internet. This operations and processes directly influenced on groceries and food.
Operations are affected by use of internet through retailing, which shows steady growth.5. Environmental: In this, factors increasing pressure on companies and managers in a way
of benefits which are provided to society. The climatic issues made in the purpose of
recognizing the trends in the market place. Threatening of food retailers is a major cause
in societal issue. It is a key area for companies which act socially in responsible manners.
Due to climatic conditions TESCO has to exceed minimum obligations in regarding with
stakeholders in concerned with regulations and corporate governance. For sustainable
consumption and production, government launches new strategies. These strategies are
used for optimum utilisation of resources and minimum environmental damages. Climate
affected directly on ranges of product which affecting in relationship between suppliers
and customers. Company has clearly committed to reduce wastage of raw material in
producing from stores by increasing social customers. They has found shopping bags
provided by TESCO that are harmful for living being with lasting capacity for using it for
three months.
6. Legal: In legislative factors, the performance of TESCO impact directly on government
policies and legislations. Due to changes occur in law is affected on the prices. By
facilitating policies the company provides price reduction on their purchase. Presenting of
powerful competitors establishes brands, intense price and strong requirements for
differentiation of product. Changes make an impact on policies for control and reducing
power of buyers. TESCO offers consumers, reduction in prices on purchase. These prices
are lowered, when goods are promoted. In terms of company law to businesses
permission is provided to customers for shopping in super market. The company took
part in legal services to its clients on situation of handling competitive rules. Food
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retailing commission is introduced for those who are demanding prices from suppliers
without any notice. For facilitating these policies TESCO provides reduction in prices of
fuels they purchase.
CONCLUSION
From the above mention report, the company TESCO leads external analysis on the basis
of products and services provided to consumers. There are various factors for analysing it in a
manner to know the impact on an organisation. PESTEL is made in which, company effects can
be disclose by politically, economically, socially, technologically, environmentally and legally.
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REFERENCES
Books and Journals
Bolarinwa, I. F., Orfila, C. and Morgan, M. R., 2015. Determination of amygdalin in apple seeds,
fresh apples and processed apple juices. Food chemistry. 170, pp.
Harrison, A., 2013.Business environment in a global context. Oxford University Press.
Maulny, A. P. E., Beckett, S. T. and Mackenzie, G., 2005. Physical Properties of Co‐crystalline
Sugar and Honey. Journal of food science.70(9), pp.
Mayo, A., 2016. Human resources or human capital?: Managing people as assets. Routledge.
Prange, C., 2016. Internationalizing to China: Challenges and Pitfalls. In Market Entry in China
(pp. 9-15). Springer, Cham.
Online
PESTEL factors affecting Tesco PLC, 2018.[ Online]. Available through:
< https://pestleanalysis.com/pestle-analysis-tesco/>
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