PESTLE and SWOT Analysis of Tesco in Business Environment

This article provides a detailed analysis of Tesco's business environment through PESTLE and SWOT analysis. It covers the impact of macro and micro factors on the firm's operations, including political, economic, social, technological, legal, and environmental factors.

Business and business
environment

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
PESTLE analysis of Tesco..........................................................................................................4
SWOT analysis of Tesco.............................................................................................................6
Interrelation between the macro and micro factors:....................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
In the business industry, a firm has to compete with various micro and macro factors that
affect the firms operational activities both externally and internally. That is why it becomes
prominent to conduct PESTLE and SWOT analysis of a firm to identify the driving and the
restraining forces.
This brief will allow us to understand the significance these analyses hold for the large
business environment with the strengths and weaknesses of the firm. The above mentioned
points will be explained in reference with TESCO (Aiello. and et.al 2020), a multinational retail
company with the aim of serving a large audience by affordable healthy and edible eateries in
order to raise their living standards.
MAIN BODY
PESTLE analysis of Tesco
1. POLITICAL ANALYSIS:
The political analysis of the firm determines the extent to which the government of a
territory can influence a firm's operations. (Christodoulou. and Cullinane. 2019)
The reach of Tesco in the international market is exposed in more than 10 countries
which implies to many trade restrictions that can impact its operational activities in either ways.
From the above analysis it is understood that, Tesco operates its activities with well
framed business and employment opportunities which benefits them in the international market,
with a wide range of employees.
Some of the trade restrictions might be a hurdle in the way of the firm's international
market, because of the restraining forces.
2. ECONOMIC ANALYSIS:
The economic analysis are the determinants of a firm's economic growth, an economy's
credit availability etc.
Tesco pays a close attention to this factor as their products directly influence the
customers and have a possibility of their financial uncertainties which can result in the less
interaction of the customers.

Tesco has always gained from globalization and modification of the products over the
years and is a major reason behind the success of the firm.
The company should focus on the borrowings in the UK because the competition levels
may affect the firm.
3. SOCIAL ANALYSIS:
The social analysis assists the firms in formulating better marketing strategies useful for
the carrying out activities of the firm.
In accordance with the recent trends and dynamic environment, people nowadays have
greater expectations from the business market in terms of fast delivery and return policies.
The positive factor for the firm is the customer loyalty. Especially the UK customers are
extremely loyal to the firm which in turn results in the motivation for the firm.
4. TECHNOLOGICAL ENVIRONMENT:
The innovations and technologies introduced in the international market plays a great role
in the overall operations of the firm.
Tesco has made advancement towards the innovative and technical opportunities in order
to be safe from the uncertainties of the dynamic world. It provided the firm with new chances of
retaining new customers for expanding its operations.
5. LEGAL FACTORS:
The legal factors have both internal and external factors which can impact on the business
environment of the firm. The rules need to be set that can affect the firm positively in their
business operations.
Tesco has a direct impact of the legal factors which it should have the proper idea of its
rules and regulations for the effective achievement of the strategic objectives. The firm, earlier
has faced some legal factors that caused it to a huge financial loss.
6. ENVIRONMENTAL FACTORS:
This factor has great influence on the firm as it is concerned with the environment and
nature and implicates as to how the company can obey the rules and regulations of the territory
they are operating in.
Tesco has opted for various eco-friendly approaches to conduct its activities without any
harm to the nature and its elements. It also has executed to work in terms of renewable resources,
electricity and water safeguarding.

The above PESTLE analysis (PESTLE ANALYSIS, 2022) have proved that the impact of
macro environment within Tesco is highly influenced by the existence of its competitors, and
other external factors which can lead to the instability of various elements of the analysis. The
development of technologies should be very cautious and should be handled with care, failing to
which can lead to negative impact of the firm on the customers and external factors.
SWOT analysis of Tesco
1. STRENGTHS:
Tesco being a great retailer in the UK, has its own advantage regarding the sales and
revenues and also about its competitive advantage. Being the leading share of the market, it has
the power to dominate the industry with its mighty products and services.
It also has the advantage of its global presence, apart from the UK. With the growing
number of stores and retails both online and offline, the marketing strategy has been proved out
to be the most effective in terms of diversification of its products. All of it became possible with
the innovative strategy formed.
2. WEAKNESSES:
The biggest weakness of the firm is of the inventory management which resulted in the
ineffective leadership management (John. and Niyogi. 2019) in the global market. The
ineffective inventory control even emerged as the shortage and overabundance of the resources,
resulting in the low and poor quality and quantity of the products and services. When these
weaknesses come in the notice of the customers and other interested parties, then it often
becomes the most negatively impacted point of time for the brand, irrespective of its plus points.
Therefore, measures should be enacted for the better utilization of the resources which
can further benefit the overall operations of the firm.
3. OPPORTUNITIES:
The collaborative and expanding techniques of Tesco can result in the better
opportunities for the firm. The benefits of collaborating with other ventures are numerous like it
can ensure a massive decline in poverty rates and a huge number of people grabbed the chance of
being a part of such an influence in the retail industry, thus being beneficial to both the firm and
the audience.

The firm also enjoys their online presence in various other countries and territories that
can help to improve their areas of operations in which they often fall short.
4. THREATS:
The biggest and mighty challenge for a firm is its competitor. With its rising and
expanding viewpoint in the business industry, the rivals impose a threat of substitutes of the
same products. This can affect the pricing strategy of Tesco if not complied with the customer
satisfaction factors.
Tesco has faced threats in the form of Brexit, with suspension criteria it unfortunately
landed into the extra trade restrictions with major continents and also the adoption of various
rules and regulations that hindered its trade relations.
From the above SWOT analysis (SWOT ANALYSIS, 2022), it has been concluded that the
leadership management plays a great role in the internal factors of the firm. From the initial stage
of the operations till the end point of the carry out process, proper evaluation, implementation
and supervision is the responsibility of the leaders in charge and have to be maintained with
utmost care and sincerity.
Tesco being top rated in all aspects still has many issues with its operational viewpoint
because of lack of proper inventory levels and poor management of its resources. Thus, it is
essential to present the firm in an influential way that can attract a huge number of the target
audience.
Interrelation between the macro and micro factors:
From the above analysis, I understood that the PESTLE analysis and the SWOT analysis
made the internal and the external factors of the firm (NGUYEN. and et.al. 2020) impactful for
the business evaluation and the changes to be made in the operational activities.
I personally feel that abiding by the rules and regulations of not only the legal entities but
also the factors that can influence the society and the consumers to help a firm strive and survive
long in the marketing industry with the leadership strategies.
The firm Tesco and its analysis have both positive and negative impact in the form of
their competitors and the substitutes they might provide to the end consumers and by achieving
the customer satisfaction rates (Sołoducho-Pelc and Sulich. 2020). The positive factors such as
the evaluation, implementation and other factors like Leadership can be an advantage for the
firm.

From my personal experience, the firm needs to concentrate on the leadership strategies
more because of the dynamic environment surrounding the global market and in order to increase
presence in the market.The facts I learnt form the report is that no matter how successful a firm
becomes; it is always surrounded by the uncertainty. So it is essential to make sure the strategies
are regularly evaluated and implemented thoroughly. To be Eveready for the upcoming
situations, it is advisable to always have a backup plan to implement and to forever be alert for
the uncertainties to come that help in making accurate decision making.
CONCLUSION
From the above analysis, it can be concluded that the business environment does not
depend on itself and that it has to implemented by someone in the best possible way. The
success rate of a firm can only be seen by the way it interacts with its customers and the external
factors. It implies that the business functioning of a firm cannot only depend on the factors but
these also need implementation and a right path to operate its activities in.

REFERENCES
Aiello. and et.al 2020. Tesco Grocery 1.0, a large-scale dataset of grocery purchases in
London. Scientific data. 7(1). pp.1-11.
Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges
from the implementation of a port energy management system: A SWOT/PESTLE
analysis. Sustainability. 11(21). p.6046.
John, S. and Niyogi, D., 2019. A Study on the Numerous Elements of Emotional Intelligence and
Leadership Qualities and Its Impact on Conflict Management: A Review of
Literature. Journal of Management (JOM). 6(2). pp.111-120.
NGUYEN. and et.al. 2020. Influences of external factors on business performance of domestic
animal feed enterprises in Vietnam. The Journal of Asian Finance, Economics and
Business. 7(11). pp.575-583.
Sołoducho-Pelc, L. and Sulich, A., 2020. Between sustainable and temporary competitive
advantages in the unstable business environment. Sustainability. 12(21). p.8832.
Online
PESTLE ANALYSIS. 2022 [Online]. Available through: <https://pestleanalysis.com/what-is-
pestle-analysis/>
SWOT ANALYSIS. 2022 [Online]. Available through: <https://venngage.com/blog/swot-analysis-
templates/>