PESTLE Analysis of TESCO: Opportunities and Threats

This essay provides a brief overview of TESCO, including its nature, size, location, profit, revenue, and ownership. It then discusses the PESTLE analysis of TESCO, including the political, economic, social, technological, legal, and environmental factors affecting the company. The essay also explores the linkage between changes in the external environment and the opportunities and threats faced by the company, as well as how TESCO responded to these opportunities and threats.

Essay

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Brief Overview of the company..................................................................................................3
PESTLE Analysis of TESCO......................................................................................................4
Linkage between the changes in the external environment and the opportunities and threats
faced by the company. ................................................................................................................5
How company responded to opportunities and threats?.............................................................6
CONCLUSION ...............................................................................................................................6
REFERENCES:...............................................................................................................................8
Books and Journals:....................................................................................................................8

INTRODUCTION
The term business may be define as the group of people who are engaged in any
professional, industrial and commercial activities to generate more and more profit(Haque 2021).
This report discussed about brief overview of the TESCO plc which include nature, size,
location, profit revenue and ownership. This report also covers the PESTLE analysis of TESCO
and how the external factor act as a opportunity and threat for the company along with this how
the company responded to the different opportunities and threat faced by the company.
MAIN BODY
Brief Overview of the company
TESCO plc is a international brand which was incorporated in 1919 and founded by Jack
Cohen. A brief overview of the TESCO plc is being discussed below:
Nature:- TESCO is a multinational brand of UK. The company is one of the leading
brand who deals in groceries and general merchandises items all over the globe. The TESCO
also engaged in the business of retail banking and insurance services. The organisation do their
business in so many countries which include TESCO UK, TESCO Czech Republic, TESCO
Ireland and many more.
Size:- TESCO plc is a well know food brand of UK. The company has over more then
7000 stores across the globe and provide employment over 500000 people in more then 12
countries (Islamutdinov 2018) . The core business of the company is grocery retailing but they
diversified their business in many sector and as of now the TESCO plc have a stock of more then
40000 different product. The organisation do their business in so many countries which include
TESCO UK, TESCO Czech Republic, TESCO Ireland and many more.
Ownership:- TESCO is a public limited company and owned by thousand of people. As
the company raise more of his fund from the people that's why the company is owned by its
shareholder. The CEO of the the TESCO is Ken Murphy, since October 2020 and he was born in
Ireland. The chairman of the company is John Allen.
Location, Turnover and profit:- The headquarters of the company is located in the
Welwyn Garden City, Hertfordshire, England, UK and turnover of the company 64.760 billion in
2020 .

PESTLE Analysis of TESCO
Pestle analysis are the tools and techniques which are use by the different types of
organisation in order to identify the external factor which affect the working of the company. In
relation to TESCO the Pestle analysis is discussed below:-
Political factor:- this factor plays a very important role in affecting the functioning of
the business. This comprises tax rates, unemployment rate, economic condition of the country,
political stability condition and many more. In relation to TESCO, the political stability of the
government of UK is very good and this impact positively on the business. The company
regularly focusing on following the rules and regulation of the government, so that they can
operate their different business function in a very effective manner (Kalusovaand et. al., 2018).
By doing this they can enjoy the long term sustainability in the market of different countries.
Economical factor:- This factor also affect the functioning of the business. This includes
wages, cost, demand , profit , prices, gross domestic product of the country, growth rate and
many more. In relation to TESCO, as the company is a multinational brand and operates their
business in more then 12 countries. This not only help the company in generating more profit but
also improves the economic background of the company and well as the country. This improve
the image in the heart of consumer and in the international market.
Social factor:- The social factor of this tool is related to the change in behaviour, change
in taste, preferences and fashion, values, desire, social issues, religion etc. In context to TESCO,
the company must have to do some social responsibilities for winning the hearts of the consumer.
The company always have to focus on offering the good quality of product to their customer so
that the product is easily accept by the consumer. The fulfilling the need and demand of the
consumer not only help in gaining the customer trust but also help in increasing the base of the
loyal customer.
Technological factor:- Technological factor play a very vital role in affecting the
operations of the business. This factor help the organisation in developing the various
opportunities and benefits. Technology advancement help an organisation to perform their
different business activities in a very effective manner. In relation to TESCO, as the company is
a international brand they have to fulfil the demand of customer all over the globe (Matović
2019) . They have to use latest technology in their production line for filling the huge demand in

the market. This help them in gaining the trust of the consumer and increase the goodwill of the
company on the market.
Legal factor:- Law change by the ministry affect the functioning of the business. This
legal factor includes rules, regulation, and different laws which are made and imposed by the
court of law in order to support the employees and for the welfare of the society. In context to
TESCO, the company must have to follow the laws like minimum wage act, women
empowerment law, equality law and many more. The company is required to focus upon the
health, security and safety of the employees as well as the people of the society. This help the
company in winning the hearts of the consumer and they can run their business function in a very
effective manner.
Environmental factor:- Environmental factor also impact directly on the performance of
company. This comprises the rules and regulation in related to the safety band procurement of
the environment. In relation to TESCO, the have to regularly follow the rules and laws which are
made by the government of UK like environmental protection law, Control of pollution act and
many more. The laws related to the safety of air and water is very important form the company
point of view. If the TESCO not following the laws, this impact very badly on the company they
also have to pay penalties for this (SALMI and CHAMI 2020) .
External factor helps in developing the new opportunities as well as act act a threat for
the company. In relation to TESCO, how these factor linked with each other and generate new
opportunities and threat has been discussed below:-
The local council of the UK has proposed the TESCO tax in the supermarket, this help
the company in better circulation of the money in the market, this act as a opportunity. On the
other hand because of the variable change in the import duty of the country this directly impact
on the price of the product, this act as a threat.
The government of the united kingdom has increase the minimum wage rate by 4.4 % in
2020, this increase the labour cost and margin of the TESCO has been decrease. This act as
threat. On the other hand diversification of the product result in the success for the company.
Now a days customer wants everything at one place because of their hectic schedule, by
understanding this need TESCO prefer one stop shopping, this act as a opportunity. According to

the recent market survey company is facing the problem of maintaining the stock and not able to
fulfil the demand of consumer, this act as a threat.
Technology advancement act as a threat for the company, as this increase the competition
in the online market and customer can easily compare the product from company to company.
For customer relief TESCO introduce an app Payqwid, customers can easily downland this app
and can pay for the shopping.
The economic condition and the government of UK is very stable, so the TESCO doesn't
have to make frequent change in their policies, this is a big opportunity for the company(Sureka,
Bandara and Wickramarachchi 2018) . On the other hand, because of the increase in minimum
wage act the worker of the TESCO took legal action against the company.
Because of the technology advancement TESCO encourage the customer to shop from
tesco.com, this result in saving the fuel which is very good for the environment and act as a
opportunities. On the other hand, ban of the plastic bags, and polythene TESCO face problem in
packaging and distribution.
Due to the increase in the import duty of the countries the TESCO responded to this by
decreasing their profit margin in the grocery and merchandises product. With the increase in the
wage rate of the employee by the government the company increase the salary of the employees
and also provide them social and financial security (Tianand et .,al 2019). Due to the
development of technology in the retail sector the competition among the firms also been
increased, tesco responded to this by offering more qualitative and quantitative product to their
customer in compare to their competitor. Because of the hectic and busy schedule of the
customer the TESCO introduce app like Payqwid and websites like tesco.com. This provide
relief to the customer as they can buy and purchasing any thing from any where. In increasing
the purchasing power and reduction the use of fuel the start providing all the product at the same
place.
CONCLUSION
From the above report it is concluded that external factor plays a very important role in
affecting the functioning of business. It is very important for the company to analysis the
external factor. The external factor can be identify with the help of pestle analysis. This report
also conclude the PESTLE analysis of TESCO and brief overview of the company. It is also

concluded that how these factor act as opportunities and threat along with this how the company
respond to the factor.

REFERENCES:
Books and Journals:
Haque, M.G., 2021. Micro Financial Sharia Non-bank Strategic Analysis: a Study at BMT
Beringharjo, Yogyakarta. Budapest International Research and Critics Institute (BIRCI-
Journal): Humanities and Social Sciences. 4(2). pp.1677-1686.
Islamutdinov, V.F., 2018. Factors Affecting the Development of the Machine-Building and
Metal-Working Industry in the Khanty-Mansi Autonomous Okrug—Yugra. Ekonomika
Regiona. (4). p.1424.
Kalusova, L and et. al., 2018. Factors affecting the financial structure of Slovak and Czech
enterprises in the Manufacture of machinery and equipment industry. Global Journal of
Business, Economics and Management: Current Issues. 8(3). pp.121-126.
Matović, I.M., 2019, November. Factors Affecting Executive Compensation. In Proceedings of
the 15th International RAIS Conference on Social Sciences and Humanities (pp. 10-17).
Scientia Moralitas Research Institute.
SALMI, N. and CHAMI, M., 2020, April. FACTORS AFFECTING QUALITY. In Proceedings
of the 3rd International Conference of Economics and Management (CIREG 2016)
Volume I (p. 63). Cambridge Scholars Publishing.
Sureka, G., Bandara, Y.M. and Wickramarachchi, D., 2018. Factors affecting the efficiency and
effectiveness of reverse logistics process. Journal of International Logistics and Trade.
16(2). pp.74-87.
Tian, Q and et ..al 2019. Exploring the factors influencing business model innovation using
grounded theory: The case of a Chinese high-end equipment
manufacturer. Sustainability. 11(5). p.1455.