PESTLE Analysis of Tesco: Business and Management

This report provides a PESTLE analysis of Tesco, a British multinational grocery. It covers political, economic, social, technological, environmental, and legal factors affecting the company. Key drivers of change and recommendations are also discussed.

Business and
management
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Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE ANALYSIS OF TESCO.........................................................................................3
Key drivers of change.............................................................................................................4
Recommendation ...................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Business environment is defined as aggregate total of organisations, people and other factors
which are outside the power of industry but impact on overall activities and operations. For the
present report, TESCO is taken into consideration. It is a British multinational grocery which
was founded in year 1919. The report will cover pestle analysis of chosen organisation
MAIN BODY
PESTLE ANALYSIS OF TESCO
The various factors of PESTLE Analysis are briefly explained:
Factors Description
Political Factors In context to Tesco, a balanced and stable
political environment of UK will help Tesco to
run the trade smoothly. The intense US-China
trade wars are affecting profitability of
company because of which Tesco is struggling
to grab a considerable market share (Bal,
Manglani and Deo, 2018).
Economic Factors With reference to Tesco, Internationalization
and diversification strategies have worked
positively for Tesco in order to expand its
market share (Brondoni, 2018). Due to Covid-
19, purchasing power of people is declined
because of which they are shifting to other
brands which are cheaper.
Social Factors With reference to Tesco, if focuses on welfare
of societies by generated employment in
different countries. With greater awareness
amongst customer regarding the health issues,
Tesco should understand and adapt these
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changes in its operations.
Technological Factors In respect to Tesco, with virtual presence on
internet for providing goods to customers at
their doorsteps, Tesco has gained a huge
market share (Khan and Quaddus, 2017).
Environmental Factors In relation to Tesco, it focuses on to reduce its
carbon footprints. The number of initiatives
that Tesco is running requires huge funding
and hence it results in contraction of the
profitability of the business.
Legal Factors In context to Tesco, by abiding with legal
compliance, it work under legal framework
which helps in smooth execution of work. It is
analysed that company is facing some legal
issues, impacting their brand image (Wood and
Logsdon, 2017).
Key drivers of change
Technological factor: One of the major key drivers of change for Tesco can be the
technology, the growing change in the technology or advancement of new technology has lead
the organisation to bring change in their organisation in regards to new technology.
Environmental factor: Another key drivers of change is changing environmental factor
the increasing concern in regards to welfare and sustainability of the environment can directly
influence and force the Teco towards change.
Recommendation
In order to effectively deal with the changing environment some of the recommendation
can be considered by Tesco as mentioned below:
 Tesco can adopt new technologies like AI or robotic technology in their stores in order to
smoothly carry out their operational activity.
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 Tesco can also move towards use of more sustainable product and service, to attract
large number of customer's.
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CONCLUSION
From the above study, it has been concluded that conducting pestle analysis help an
organisation to know about the impact of macro environmental factors on its operations. It is
determined that such analysis allow company to develop effective strategies and implement them
without any issues.
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REFERENCES
Books & Journal
Bal, G.R., Manglani, A. and Deo, M., 2018. Asymmetric volatility spillover between stock
market and foreign exchange market: Instances from Indian market from pre-, during
and post-subprime crisis periods. Global Business Review, 19(6), pp.1567-1579.
Brondoni, S.M., 2018. Competitive Business Management and Global Competition. An
Introduction. In Competitive Business Management (pp. 21-42). Routledge.
Inigo, E. A., Albareda, L. and Ritala, P., 2017. Business model innovation for sustainability:
Exploring evolutionary and radical approaches through dynamic capabilities. Industry
and Innovation, 24(5), pp.515-542.
Khan, E. A. and Quaddus, M., 2017. What factors make micro-firms sustainable? A proposal for
a model. The Journal of Developing Areas, 51(4), pp.255-269.
Wood, D. J. and Logsdon, J. M., 2017. Theorising business citizenship. In Perspectives on
corporate citizenship (pp. 83-103). Routledge.
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