PESTLE Analysis on TESCO: Impact of External Factors on Business Performance

This report analyses the impact of external factors on the performance of TESCO through PESTLE analysis. It covers political, economic, social, technological, legal, and environmental factors.

PESTLE Analysis

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE Analysis...................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
Books and Journals.................................................................................................................5

INTRODUCTION
The business environment is so diverse and dynamic. There is huge impact of macro-
economic factors on working of business environment (Islam and Mamun, 2017). This report is
based on PESTLE Analysis on TESCO that helps to analyse the impact of external factors on
performance of business organisation.
MAIN BODY
PESTLE Analysis
TESCO is a British Multinational organisation that has headquarters in London, UK. It was
established in 1919 by John Cohen. Below is discussion related to external factors that have
impact on the operations of business:

Political Factors: It includes the plan and policies that are formulated by the government.
In relation to TESCO, it is multinational company that operates around the world and takes
decisions according to the policies of the nation (Perera, 2017). It has headquarters in UK and the
political condition of UK is stable and that helps them to operate smoothly.
Economic Factors: The factors such as inflation rate, demand and supply, interest rate,
unemployment rate etc. comes under the economic factors. In the present scenario, Covid-19 has
hit the business organisations. There are huge losses due to pandemic. It is seen that TESCO
provided goods through online mode and that helped them to minimise the losses.
Social Factors: It is important to note that business operates in society and they must take
care about the needs and wants of people. In this regard TESCO works to according to the latest
trends in the market. They provide innovation in product as per the desires of customers. At the
same time they provide effective services to the customers and that help them to be loyal for the
company (Nandonde, 2019). Along with that the stores are designed in such a way that they are
convenient to use.
Technological Factors: It is important to note that there is regular update in technology. It
has become necessary for the business organisations to use latest means of doing business.
TESCO is a successful business organisation that uses latest technology to serve the customers
effectively (Mihailova, 2020). In relation to TESCO they have provided self-checkout points for
customers. They also provide online delivery to the customers so that they are able to access the
business effectively. This is necessary to attract the customers.
Legal Factors: There are certain laws and legislations that must be followed by the
businesses. The company has to take food license in order to maintain standard of food served by
them. Along with that, there are large numbers of employees so the company has to take care of
workplace laws and legislations so that they are able to operate freely.
Environmental Factors: It is necessary to take care of environment. There is huge
pollution that is caused by business houses (Islam and Mamun, 2017). TESCO takes measures to

reduce carbon footprint and use all the resources in an effective manner. The company also
follows the principles of sustainability and support the environment.
CONCLUSION
From the above report, it is analysed that the external factors have impact on performance of
business organisation. It is seen that organisation must follow all the policies and laws to operate
smoothly. They must use technological factors to provide best to the customers and take care
about environment at the same time. The social and economic factors also play a major role in
decision making of the company.

REFERENCES
Books and Journals
Islam, F.R. and Mamun, K.A., 2017. Possibilities and challenges of implementing renewable
energy in the light of PESTLE & SWOT analyses for island countries. In Smart Energy
Grid Design for Island Countries (pp. 1-19). Springer, Cham.
Mihailova, M., 2020. The state of agriculture in Bulgaria–PESTLE analysis. Bulgarian Journal
of Agricultural Science, 26(5), pp.935-943.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.