PESTLE Analysis of Tesco

This solved assignment delves into the PESTLE analysis of Tesco, exploring its political, economic, social, technological, legal, and environmental factors. It examines how these forces impact Tesco's operations and provides insights into Porter's Five Forces framework and the Ansoff Matrix as strategic planning tools for the company.

BUSINESS STRATEGY

Table of Contents
Introduction..........................................................................................................................................5
1.0 Terms of Reference ........................................................................................................................5
2.0 Procedure/Method..........................................................................................................................5
3.0 Findings..........................................................................................................................................5
3. 1 TESCO brief.........................................................................................................................5
3.2 Morrisons Analysis...............................................................................................................5
3.3 Assessing the significance of stakeholder analysis...............................................................6
4.0 Conclusion......................................................................................................................................6
5.0 References......................................................................................................................................8
6. Appendix...........................................................................................................................................9
SWOT analysis............................................................................................................................9
BCG Matrix.................................................................................................................................9
Culture ......................................................................................................................................10
Demographic influences............................................................................................................10
Carrying out an environmental audit.........................................................................................10
Porter fives forces......................................................................................................................11
Analysing the strategic position of the business by conducting an organisational audit.........12

Illustration Index
Illustration 1: Anshoff matrix of TESCO.............................................................................................7
Illustration 2: Stakeholder significance grid and mapping...................................................................8

Index of Tables
Table 1: SWOT analysis.......................................................................................................................5
Table 2: PESTLE analysis....................................................................................................................6
Table 3: Porter five forces model.........................................................................................................7

INTRODUCTION
Business strategy can be defined as process which is used to achieve goals and objectives of
ogranization in the industry. It is also essential for corporation for long term planning to get success
in the business (Dameron and Durand, 2013). The present report describes strategic position of
business, environmental audit as well as importance of stakeholder analysis.
1.0 TERMS OF REFERENCE
I am got my job through business consultancy organisation which are established in London.
My roles and responsibility in the TESCO is to work with clients and support them for future
planning and preparation of business strategy.
2.0 PROCEDURE/METHOD
I will acquire this by using my self knowledge and information for organization. Further, I
also gain this information about corporation by utilizing books, the internet, journals as well as
other available resources.
3.0 FINDINGS
3. 1 TESCO brief
TESCO is British retail organisation which sell effective quality of products to its consumers
in the UK. Corporation was established in 1919 and name of current chief executive officer is dave
lewis. In addition to this, enterprise has expanded its business in 12 countries across world. As per
report, TESCO is leading organisation in the retail industry of United Kingdom. (About us, 2016).
3.2 Morrisons Analysis
Further, Revenues of organisation was approximate 62.284 billion pounds in previous year.
Along with this, management of corporation have 50000 employees to manage its retail operations
in the many countries. In addition to this, organisation has increased its sales by providing more
concentration on online activities in the UK market.
Management of TESCO also believe in offering quality products to its consumers in the
retail market. This strategy contribute effective role for corporation to achieve better success as
compared with previous years. Along with this, organisation also focus on team work and unity to
complete its goals and objectives in appropriate manner within market.
Market share contribute effective role for management of organization to analyse its market
coverage ratio as comparison its rivals in the market. For example, As per report of (statista, 2016),
Current market share of TESCO corporation is 28.1 percent in grocery sector of United Kingdom
(Market share of grocery stores. 2016).

3.3 Assessing the significance of stakeholder analysis
Importance of stakeholder analysis is valuable for organisation because its help to identify
needs and requirement of consumers. This method helps the TESCO to design and develop
appropriate products which increase its selling in the market. In addition to this, It is important for
organisation to develop new marketing and competitive strategies for corporation as per their
suggestion. Further, this method plays important role for TESCO to increase its market share in
retail industry of United Kingdom (Priego, Lizano and Madrid, 2014). It also help the organisation
to gain effective revenues as well s profit from the consumers.
Stakeholder significance grid and mapping
It is used to prioritize the stakeholders of organisation on the basis of their power as well as
interest.
(Source:Priego, Lizano and Madrid, 2014)
Low power and interest: General people and employees.
Low power and high interest: Competitors and consumers.
High power and low interest: Government and regulatory bodies (Priego, Lizano and Madrid,
2014).
High power and interest: Investors and top management of TESCO.
4.0 CONCLUSION
From the report, it is found that SWOT analysis and benchmarking helps the organisation to
Illustration 1: Stakeholder significance grid and mapping

find out its strategic positioning. Further, PESTLE analysis and porter five forces model aids the
management of TESCO to develop its business strategies. It can be concluded that stakeholder grid
and mapping also contribute effective role for organisation to identify its key stakeholders.

5.0 REFERENCES
Books and journals
Dameron, S. and Durand, T., 2013. Strategies for business schools in a multi‐polar world.
Education + Training. 55(4/5). pp.323 – 335
Ferreira, J., 2013. Business strategy – applications and advancing tools. Management Decision.
51(7).
Longoni, A. and Cagliano, R., 2015. Environmental and social sustainability priorities: Their
integration in operations strategies. International Journal of Operations and Production
Management. 35(2). pp.216 – 245'
Nuntamanop, P., Kauranen, I. and Igel, B., 2013. A new model of strategic thinking competency.
Journal of Strategy and Management. 6(3). pp.242 – 264
Panicker, S. and Manimala, M., 2015. Successful turnarounds: the role of appropriate
entrepreneurial strategies. Journal of Strategy and Management. 8(1). pp.21 – 40
Priego, A., Lizano, M. and Madrid, E., 2014. Business failure: incidence of stakeholders’ behaviour.
Academia Revista Latinoamericana de Administración. 27(1). pp.75 – 91
Sirsly, C. and Sur, S., 2013. Strategies for sustainability initiatives: why ownership matters.
Corporate Governance. 13(5). pp.541 – 550.
Online
About us. 2016. [Online]. Available Through:<http://www.tescoplc.com/index.asp?pageid=6>.
[Accessed on 1st April 2016].
BCG Matrix. 2010. [Online]. Available Through:<http://www.netmba.com/strategy/matrix/bcg/>.
[Accessed on 1st April 2016].
Market share of grocery stores. 2016. [Online]. Available
Through:<http://www.statista.com/statistics/279900/grocery-market-share-in-the-united-
kingdom-uk/>. [Accessed on 12th April 2016].

6. APPENDIX
SWOT analysis
It helps the to identify the strength, weakness, opportunities and threats of organisation.
Table 1: SWOT analysis
Strength Weakness
 Effective market share
 Better brand image (Panicker and
Manimala, 2015).
 Good grip on the all segments
 Higher sales and market growth
 High dependence in the market of UK
 Human resource strategies are not
suitable.
Opportunities Threats
 Global expansion of retail business
 organisation can use diversification
strategies due to good market image.
 Higher competition
 Recession
 Changes in rules and regulations
As per the research, effective grip on all segments is the biggest strength for TESCO
because it helps to increase sales of corporation in the retail market of United Kingdom. Due to this
reason, it aids the organisation to raise its profit as comparison of its rivals in the market.
BCG Matrix
It is planning model which classifies business units into four categories based on
combination of market share and growth.
Stars: Market position of organisation is high due to effective market share and growth in the retail
sector. Further, income of firm is higher because TESCO invest huge amount money to attain
maximum profit.
Cash cow: Distributions, effective quality and extra services also come under cash cows due to high
market share and lower market growth. Organisation has to maintain its strategies to achieve
effective growth in the business (BCG Matrix. 2010).
Question Market: Currently, TESCO product and services is not come under the question mark due
to better its effective quality.
Dog: No type of product and services of organization come under dog category.

Culture
Management of TESCO follows abhocrasy culture to manage its staff members. It helps
corporation to innovate service for better reliability of consumers by developing effective strategies
at the work place. In addition to this, Culture contribute effective role for corporation to increase
motivation inn staff members.
Demographic influences
It can help the TESCO to find out strategies positioning in the market. Organisation can
identify demographic influences on the base on the population factors like age, sex, race, level of
education and economic status. As per current research, population of UK are increased to
approximate 1 percentage as comparison of previous years. So due to this reasons, organisation is
also expected growth in sales by increasing demand. In addition to this frequency of foreigners are
enhanced as compared with previous years. So management of TESCO has to keep diversified
product to meet demand of people in the market.
Carrying out an environmental audit
TESCO can use PESTLE analysis, porter five forces and Anshoff matrix for environmental audit.
PESTLE analysis
Table 2: PESTLE analysis
Factors Description
Political It is supportive for organisation due to better taxes and tariffs which help to
reduce its expenditure (Ferreira, 2013). For example, transportation cost,
income and VAT taxes are not higher as comparison other countries which aid
to reduce its cost in the United Kingdom.
Economic Current economic condition of Britain is supportive on the basis of various
factors. For example, GDP (Gross domestic product), inflation rate,
fluctuation rates as well as GNP (Gross national product) to help the TESCO
corporation to expand its business.
Social This aspect supports the organisation increase its sales of grocery products in
the market. For example, lifestyle, trend, income of people is effective which
help corporation to increase its profit in the market. They contribute effective
roel for TESCO to increase its market share in retail sector.
Technological Technological factor also supports corporation to manage its internal and

external operations in a better way. For example, Communication facilities,
internet as well as efficiency of TESCO aid to manage its information and
increase performance in the market.
Legal This aspect affect efficiency of corporation in retail sector of United Kingdom.
For example, Legal rules and regulations like health and safety and
employment policies are very strict for TESCO which increases its
organizational expenditure (Nuntamanop, Kauranen, and Igel, 2013). They
directly affect the profit and revenues of organization.
Environmental Environmental factors does not affect the organisation in the market because
management of corporation does not follow any activities who increases
pollution in the country. For example, TESCO follows corporate social
responsibility activities, charity functions and other social welfare events as
per law of United Kingdom (Longoni and Cagliano, 2015).
According to report, economic factor is most important factor in PESTLE analysis.
Generally, this factor directly creates effect on the income of consumers. If economy of UK falls
than sales of TESCO can be decreased as comparison of previous years which affect its profit in
grocery sector.
Porter fives forces
This model is used to analyse the level of rivalry which help the organisation for
environmental audit.
Table 3: Porter five forces model
Factors Description
Threat of new entrants Medium due to lot of investment.
Threat of substitutes Low due to high quality products in affordable price.
Rivalry High due to higher competition among the retail organisations.
Bargaining power of
suppliers
Low due to proximity of many suppliers (Dameron and Durand, 2013).

Bargaining power of
buyer
High due to frequency of many retail competitors.
Anshoff matrix
It helps the management of TESCO for strategic planning of its business strategies.
(Source:Panicker and Manimala, 2015).
Analysing the strategic position of the business by conducting an organisational audit
Organisation can use many methods for organisational audit.
Benchmarking: It can help the TESCO to identify the its strategic positioning by comparing actual
results with desired results. With the of this process, management of enterprise can design effective
business strategies.
Scenario planning
Scenario planning is an analysis for strategic planning which is used by TESCO
organizations to make long-term plans (Sirsly and Sur, 2013). It plays important role for
organisation to achieve its objectives in the retail sector.
Illustration 2: Anshoff matrix of TESCO