Environmental and SWOT Analysis of Tesco for Marketing Assessment

This report provides an analysis of Tesco's internal and external environment through SWOT and PESTLE analysis. It discusses the strengths, weaknesses, opportunities, and threats of the company and provides recommendations for improvement in marketing strategies.

Marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Environmental analysis..........................................................................................................3
SWOT analysis.......................................................................................................................4
Recommendations..................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES:...............................................................................................................................8
Books and Journals.................................................................................................................8

INTRODUCTION
Marketing can be defined as the process of attracting the buyers towards the organisation
in order to fulfil their needs and wants. Each and every company must take care about their
external environment to know about the problems that may arise in future (Lotfalipour, 2021).
This report is based on Tesco. It is a British multinational brand which deals in the grocery
products and is one of the biggest retailer in the world. It was founded in 1919 by Jack Cohen.
It's headquarters are in Welwyn garden city, England. It stands in the 3rd position in the retail
market in the world according to the gross revenue and at the 9th position according to the
revenue. There is discussion related to external and internal analysis of the company. In the end,
recommendations for improvement are also mentioned in the report.
MAIN BODY
Environmental analysis
It is necessary to check the condition of environment and examine the factors that have
impact on the business organisation. There is need of conducting external and internal analysis of
the company (Mahadea and Khumalo, 2020). The internal factors are discussed below:
Product issue: Tesco deals in variety of products and maintain high quality. There is
high competition present in the market in relation to similar products. This causes product issue
for the company.
Marketing issue: The company has to work more on marketing in order to attract more
customers towards the brand.
Management issue: There are issues related to management that are being faced by the
company. There are situations of conflict that arise in the organisation.
PESTLE ANALYSIS
Pestle stands for political, economic, social, technological, legal, environmental factors.
Pestle analysis is used to deal with the external forces of the business. Pestle analysis can be an
effective framework to use in corporate strategy planning to identify the pros and cons of the
business (Chu, 2018). Pestle analysis helps to know that how much these factors are impacting
the business. Pestle is broadly divided into 6 parts which deals with the opportunity and risks of
the business.
Pestle analysis in relation to Tesco is as follows:

Political factors: Tesco is a multinational company as it operates in various countries.
There is political stability in the UK which helps the Tesco to run their operations smoothly.
Economic factors: During the covid-19 the retail sector of the market faced many
problems in sales and distribution. Tesco at that time provide online platform to its customer
which helps the company in more revenue generation.
Social factors: Tesco provides different kind of products under one roof which satisfies
the social needs of the different customers at one place (Lee, and Yang, 2021). Tesco have also
shifted to organic products for those customers who are health conscious.
Technological factors: To stay relevant to the technology, Tesco continuously
experiments with the various aspects of technology. Tesco have introduced online shopping and
they also use social media promotions which are a part of technological advancement. 43% of
Tesco business are now conducted through online mode which results in the growth and profit
maximisation for the company.
Legal factors: Tesco follows both local and international law. Tesco follows all the
rules and regulations that are mentioned by the Food Retailing Commission. This helps the
company to do its operations smoothly.
Environmental factors: Tesco has recently launched its phase 2 of remove, recycle,
reduce, reuse plan (Akhmetshin, 2018). Tesco has taken initiative to remove and reduce the use
of non-recyclable plastic by using residual plastic.
SWOT analysis
SWOT stands for strength, weakness, opportunities and threats. SWOT analyses is a tool
that is used for assessing these four aspects. It analyses helps in evaluating company's position
and also used to develop a strategic plan for the business. SWOT analysis in relation to Tesco
brand is as follows:
Strength
 Strong Brand: Tesco is a strong brand
as they are well established in the
market. Competing with this brand is
very tough for any company (Felix,
and Wilford, 2019). Tesco has a brand
Weakness
 Imitable products : Imitable products
are copy of the same products that are
already being sold in the market. Tesco
faces this issue as same products that
they sell are easily available in the

image in the eyes of its customers and
they have strongly build their trust in
the market. As Unilever is operating
their business around the world.
 Broad product mix: Tesco deals in the
range of products. They have products
from basic needs to luxury needs.
Tesco offers products to every class
whether it is lower or upper, this is
amongst one of their main strengths.
market, which causes an indirect
competition to them.
 Management issue: Tesco brand faces
issue of management. There are more
employees in the company and
becomes problematic to manage the
employees (Lindsten, Auvinen, and
Juuti, 2019).
Opportunities
 Digitalisation: There are various
opportunities that are available in
digital world. Tesco must analyse the
opportunities and shift towards
digitalisation so that they are able to
attain success in market.
 Business diversification: Tesco has
the opportunity to diversify its business
by entering into different segment apart
from the consumer goods industry. As
they have a very good brand image and
customer base by which they can easily
build their business in any other
segment.
Threats
 COVID-19: During the time of the
covid-19 pandemic most of the
businesses have seen losses. Tesco
brand has also faces this issue as people
were not stepping out of the houses and
there were so many restrictions for
going outside (Primawati, 2019).
Market was shut down at that time by
which Tesco could not achieve its
desired sale which comes out as a
major threat for the company.
 Tough Competition: There is a tough
competition in the market as local
brands tries to bought down the image
of the company. They copy the
products and even sell at cheaper prices
than the Tesco. Other companies try to
reduce the market share of the company
and financial performance which

directly affects the business of the
company.
Recommendations
The external environment is dynamic and it keeps on changing. Below are some of the
recommendations for the business organisation that will help them to carry on the work
effectively:
 Tesco must adopt innovation and conduct regular research of the market so that they are
able to add new features to their product.
 The company must use digital marketing platforms to reach more and more customers.
The use of social media campaigns, e-mail marketing, content marketing will help the
business organisation to reach more customers. It also helps the business organisation to
gain edge over the competitors.
 Tesco must assure that there is proper management in the employees. To carry on the
work effectively the business organisation needs coordination among the employees. The
desired goals and objectives can be attained with the help of proper management in the
company.

CONCLUSION
From the above report, it is concluded that marketing is the function that helps the company
to attract customers. This report has discussion related to external analysis with the help of
PESTLE. Afterwards, the internal analysis is also done to know about the strengths and
weakness. In the end recommendation are mentioned so that right actions can be taken.

REFERENCES:
Books and Journals
Akhmetshin, 2018. Internal control system in enterprise management: Analysis and interaction
matrices.
Chu, 2018. Mediating influences of attitude on internal and external factors influencing
consumers’ intention to purchase organic foods in China. Sustainability, 10(12), p.4690.
Felix and Wilford, 2019. Does it pay to remediate? An analysis of the internal and external
benefits of remediation. Accounting and Business Research, 49(2), pp.181-205.
Lee and Yang, 2021. The Determinants of Foreign Subsidiary CEO Selection: Effects of Internal
and External Network Embeddedness of Foreign Subsidiaries and Market
Characteristics of Host Country. Journal of Korea Trade, 25(2), pp.134-151.
Lindsten, Auvinen, and Juuti, 2019. INTERNAL AND EXTERNAL
STAKEHOLDERS’IMPACT ON PRODUCT DEVELOPMENT CURRICULUM
DESIGN. In DS 95: Proceedings of the 21st International Conference on Engineering
and Product Design Education (E&PDE 2019), University of Strathclyde, Glasgow.
12th-13th September 2019.
Lotfalipour, 2021. Impact of internal and external on the industrialization of the Iranian
economy. Quarterly Journal of Quantitative Economics, 18(3), pp.1-34.
Mahadea, and Khumalo, 2020. Understanding the internal and external constraints to growth of
microenterprise entrepreneurship in a South African provincial context: A case of
Mpumalanga-Mkhondo. Journal of Developmental Entrepreneurship, 25(02),
p.2050013.
Primawati, 2019, November. Analysis of online market system design strategy based on external
and internal factor evaluation matrix. In Journal of Physics: Conference Series (Vol.
1280, No. 2, p. 022014). IOP Publishing.