Internal and External factors affecting Tesco: SWOT and PESTLE analysis

This report analyzes the internal and external factors affecting Tesco using SWOT and PESTLE analysis. It also suggests ways to overcome uncontrollable situations and impact on the external environment.

INTERNAL AND EXTERNAL FACTORS
INTRODUCTION
 External and internal factors are important as these influences
organizational performance in both positive & negative both factor.
 In the current environment, internal & external both aspect play
crucial role in impact organizational growth which requires firm to
remove negative elements to have positive working condition.
 Present report is based on Tesco which operates in retail industry.
 Current case study will pay attention on SWOT & PESTLE analysis
for assessing internal and external aspects and ways to overcome
uncontrollable situations.
Explaining how external and internal factors affect Tesco
Internal factors are those which can be controlled by company whereas
external aspects are uncontrollable. SWOT analysis is one of the tool which can
be applied to assess internal factors impact on Tesco. PESTLE is one of the
external environment evaluation approach that can be executed to get
information so that lacking areas can be assessed.
SWOT analysis
Strengths
 Biggest grocery retailer in the UK
 Higher market shares in retail industry
 A grower number store due to higher availability of financial resources
(Soegoto, 2021).
 Diversified market & product range has firm successful
 Good brand image due to superiors technologies utilization
 Efficient network of suppliers has made Tesco to diversify its operations.
Weaknesses
 Low profitability due to less cost technique model.
 Less operating performance because of insufficient ground of research.
 Larger financial errors by increasing credit card debts.
 Accounting Fraud scandals damaging reputation
 less effective inventory management & quality control created food safety
issues.
Opportunities
 There are various chances of joint ventures in less effective area.
 Digitalization has emerged online based platform presence which is
increasing reach.
 Strategic alliance with other popular brands might incline sales.
Artificial intelligence & machine learning can boost productivity.
Threats
 Brexit & supply chain is one of the biggest threat
 Larger number of entry rivals are creating competition which may make
firm unstable.
 Fake farm and Brexit deal is still threat for Tesco
 Covid 19 pandemic is crucial to highlight as limitation which can affect
development.
Explaining how external and internal factors affect Tesco
Internal factors are those which can be controlled by company whereas external aspects are uncontrollable. SWOT analysis is one of the tool
which can be applied to assess internal factors impact on Tesco. PESTLE is one of the external environment evaluation approach that can be
executed to get information so that lacking areas can be assessed.
s

PESTLE analysis of Tesco
Political Factor  It involves taxation, act of legislation, stability of country (Perera, 2017).
 Tesco as being international organization need to pay attention on these factors as influences demand and supply of products.
 Other aspects that affects Tesco's operation involves government regulations, political circumstances, Brexit deal, etc in
negative manner.
Economical Factor  This factors comprises employment, interest, saving, growth rate, etc. influences both positively & negatively.
 Covid 19 is one of the major pandemic situation which is expected to affect affect operational & profits. The purchasing power
has declined which resulted into switch to cheaper products and decreasing revenue of enterprise.
Social Factor  Social factor involves attitude, belief, changing trend of market, etc. play important role in affecting Tesco.
 Local social trends, vegan trends are negatively influencing firm's growth. Whereas social supermarket, employment
opportunities, culture impact are positively boosting Tesco development.
Technological factor  It is one of the significant aspect which is influences firm’s growth & productivity.
 Usage of technology, e-commerce, compliance with other business based platform, etc. are favourable for firm but increases
cost of operation.
Legal factor  The legal components which contribute in boosting and hindering enterprise's performance includes industrial legislation,
government policies, etc.
 Tesco got negatively affected from law suits from employees due unequal pay, fraud case, gender bias allegation, etc.
Environment factors  This concentrates on recycling plan, sustainable efforts, etc. via focusing on green practice so that resources can be utilized in
optimization manner.
Describing different ways business can impact on external environment
There are several patterns which can be utilized by Tesco to eliminate external factors negatively affecting company's progress. Political, economic, social,
technological, legal and environmental factors are the main area within which firm operates so evaluating each becomes essential (Bin Mohd Shah, 2018). To get
stabilized perform, Tesco can apply the following actions to have improved situation. The different tactics includes market, competitors, porter's five forces model,
feasibility evaluation, etc. with help of this techniques accurate information can be derived for assessing accurate factors which are lacking and hindering Tesco
growth.
 To improve political situation stability of country can be accessed via conducting macro factor evaluation. Proper internal policies to cope up with
taxation and tariff criteria so that political irrelevant barriers can be removed. Accurate manner of compliance can be established through identifying
benefits so that smooth operation may be executed.
 Appropriate marketing strategies can be applied to fairly communicate with customers in turn greater stability in terms of economic and social perspective
can be achieved. It will allow firm to give significant contribution in achieving favorable outcomes by coordinating with changing pattern like trend,
saving, interest rate, etc.
 The major action which can be executed by enterprise to have better functioning according to changing circumstances through adopting advanced
technology so that quality & inventory management executed in efficient manner (Franceschelli, Santoro and Candelo, 2018). Strategic planning to
properly manage cost structure for maintaining adequate level of funds can be implemented by Tesco to meet unforeseen circumstances.
 Focusing on organizational culture & structure, human resource, physical assets, management, etc. can aid enterprise to develop competitive advantages
through practicing ethically. This will majorly assist in having ability to comply with industrial rules and regulations, international standards, etc. for
satisfying customer in high degree. Continuous evaluation via paying attention on situation & feasibility analysis will benefit Tesco to eliminate irrelevant
aspects to obtain desirable position in industry.
CONCLUSION
From the above report it can be concluded that there are
various types of factors which can affect the organizational growth
in both positive & negative pattern. Internal factors that are affecting
Tesco has been analyzed by using SWOT analysis technique which
has assisted in assessing strengths, weaknesses, opportunities and
threats. External elements are evaluated with help of PESTLE tool
which has given emphasis on political, economic, etc. so that deeper
knowledge can be derived. These impact can be eliminated by
having continuous situation, market, etc. analysis so that changes in
policies & strategies can be exerted.
REFERENCES
Books and journals
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Soegoto, F. A., 2021. Product Development using SWOT Analysis. International Journal of
Entrepreneurship & Technopreneur (INJETECH). 1(1). pp.1-10.
Bin Mohd Shah, M. A. S., 2018. The viability of halal food industry for Brunei economic
diversification: SWOT analysis. Journal of Social Sciences. 3(3). pp.1220-1233.
Franceschelli, M. V., Santoro, G. and Candelo, E., 2018. Business model innovation for
sustainability: a food start-up case study. British Food Journal.