Business Strategy: Analyzing Tesco's Macro and Internal Environment

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK ..............................................................................................................................................3
P1. Analyse the impact and influence of the macro environment..........................................3
P2. Analyse the internal capabilities and environment of the chosen firm............................4
P3. Evaluate the competitive forces.......................................................................................7
P4. Apply range of theories or models...................................................................................8
CONCLUSION .............................................................................................................................10
REFERNCES:................................................................................................................................11
Books and Journals:..............................................................................................................11

INTRODUCTION
The term business strategy refers to a long term plan which is created by an organization
to compete in the target market. The strategy is created to achieve the desired goals and
objectives of company which includes products and services, target customers or the markets
where profits can be generated (Adel, Mahrous and Hammad, 2020). The report is going to
prepare on the Tesco which is a British multi-national company. It is UK based company which
is specified in retailing of clothing, furniture, toys and many more. It was introduced by Jack
Cohen in 1919. The aim of report is discuss various frameworks such as PESTLE, SWOT,
Porter's Five Forces model and range of theories on the respective company.
MAIN BODY
TASK
P1. Analyse the impact and influence of the macro environment.
PESTLE analysis is a framework that is used to examine the different factors of external
environment such as political, economic, social, technological, legal or environmental. This
framework on the Tesco used to analyse the brand on its business strategy where it facilitates to
understand the market dynamics and to improve business day by day.
 Political: Since it is a multi-national company where it done its business operations on a
global platform, there are many political factors such as tax rates, stability of the nation,
acts of legislations are the factors which influence the performance of the company.
BREXIT is one the major example which comes with new regulations, systems in order
to supply their goods to other country, along with this it also affects the profitability of
the company.
 Economic: These factor concerns with demand, supply, costs, prices or profits of the
company. In context to Tesco, it should be aware about the various taxation policies
which impacts the benefits of company. In case of inflation, the company must put their
prices accordingly on the products of daily essentials.
 Social: Generally, customers are like to buy things in bulk and one stop-shopping. These
factors includes the buying patterns of customers such as beliefs and attitudes, taste and
preferences and so on. In context to mentioned firm, it increases the number of non-food
items to sale. Social influences are changing the demand of customer.

 Technological: As the world is at very fast pace, it is very vital to keep up with the
changing technologies (Akman and Yilmaz, 2019). Tesco has been come up with the
adoption of various technologies and get some amount of success. In order to influences
customers they are promoting on social media platforms, online shopping and many
more.
 Legal: The changes in government policies highly influences the business operations.
For better smoothing of operations, it is essential for the Tesco to follow the national and
international laws.
 Environment: Tesco has taken various steps to reduce the negative affects to the
environment and more focus on the sustainability. It also focused on to reduce the carbon
footprints and introducing its phase 2 of remove, reduce, recycle and reuse plan.
As Tesco is one of the leading business in the UK, it provides a tough competition to
other businesses. After analysing the macro environment factors, the strengths and weaknesses of
the company also has been identified. When it comes with political, social, legal and economic
condition of the company, it is all supporting by external strength and various opportunities at
the same time (Beynon-Davies, 2019). The company will accomplish its benefits from the
external value. Economic condition of the company is stable in comparison with other stores. It
might be affected by political factors but by implementing strategies it can be cope with it.
P2. Analyse the internal capabilities and environment of the chosen firm.
SWOT analysis is a framework which is used to examine the internal capabilities i.e.
strengths and weaknesses of the company. It also aims to grab the opportunities and threats
which is facing by company.
Strengths:
 Biggest groceries retailer in UK: It is known as leading retailer in the country. It has
increased number of revenue and sales in comparison with other retailers or
supermarkets.
 Diversified stores: It has multiple launches such as Tesco Extra, Tesco Homeplus, Tesco
Metro, Tesco Superstores and so on.
 It is the largest private employer of UK: The company likes to create more than 743k
job opportunities throughout the world.