PESTLE and SWOT Analysis of TESCO in Global Business Environment

This report discusses the impact of external factors on TESCO's operational functionality in the global business environment through PESTLE and SWOT analysis. It covers the impact of political, economic, social, technological, legal, and environmental factors on the company. The report also highlights the influence of SWOT analysis on the marketing and finance departments of TESCO.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE analysis of TESCO..................................................................................................3
SWOT analysis of TESCO.....................................................................................................5
Impact of SWOT analysis on Marketing and finance department.........................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Global business environment comprises all the external factors which are beyond the
control of business (Hampden-Turner, Trompenaars and Hampden-Turner, 2020). It means that
the business does not have any kind of control under this environment. Various components
included under this environment are competitors, suppliers, government agencies and many
more. In this report, TESCO company is taking into consideration which was founded in 1919.
Chairman of company is John Allan and CEO is Ken Murphy. The given company majorly deals
in supermarket, hypermarket, superstore and convenience store. This report will deals in
PESTLE and SWOT analysis of an organisation and how SWOT analysis impact two functional
areas of an organisation such as Marketing and finance (Ahmed and Alam,, 2021).
MAIN BODY
PESTLE analysis of TESCO
 Political factor- This factor determine how government of country impact the economy
and the industry where business operates in. In this factor all the changes made by
government in the terms of taxation rate, fiscal policy and trade tariffs are included under
given factor. In the terms of TESCO, this factor has majorly impact the operational
functionality of firm. Due to political instability in country government in encouraging
retail sector to increase employment by creating jobs for local people. TESCO will play a
major role in creating jobs for people. This would not only create goodwill of firm in
market but will also help to rise in its sales and profitability.
 Economic factor- Given factor deals with performance of economy which impact the
performance and overall productivity of firm in long term. In this factor several things
such as inflation rate, interest rate and foreign exchange rate are included. In the terms of
given company, due to rise in prices of products in United Kingdom which happens
because of inflation. This has negatively impact the operational functionality of United
Kingdom. As s result, management of given company has also need to increase the price

of their products to meet their profit and cover their cost. With the rising in prices people
will purchase the products in less quantity. Hence this will reduce the sales and overall
profitability of company (Tuleja, 2021).
 Social factor- This factor helps to identify the social environment to the company where
it is operating. There are several things which are included in given factor such as change
in societal trends, demographics and many more. In retail industry Nowadays people are
health conscious and they demand those food products which are good in nutrients. In the
terms of TESCO, management of company also deals in nutrients and health conscious
products winch will attract those customers who prefer to use nutrients products. Hence
this would help to increase sales of company as well as its profitability.
 Technological factor- Under this factor all the technological carnages which affect the
operational functionality of business are included in given factor. In the terms of retail
industry, nowadays every transactions is happing online whether it is manufacturing of
products or selling of products to customer. In the terms of mentioned company, It has its
own website through which it take order from customer online and sell products directly
at their home. Moreover management is also planning to launch their own mobile
application to sell products. Through this way they would be able to sell their products at
global level and can increase their sales and profit.
 Legal factor- This include several laws and regulations which affect the operational
functionality of firm. There are several laws such as consumer protection law, safety law
and many more. In the terms of TESCO, there employees took legal actions regarding
age and gender discrimination they do with their employees. Moreover several investors
have also file complain against TESCO. This had not only affected the sales and
profitability but also destroy their goodwill in market.
 Environmental factor- Given factor include change in climate, weather and
geographical locations which affect the operational functionality of business. In the terms
of TESCO, it is encouraging its customers to do shopping from its website through this it
would save petrol of customers although they do not need to come to shop physically.
Through this they would be able to contribute to environment in positive manner and will
also help to rise in their sales.

SWOT analysis of TESCO
Strengths
 Largest Grocery chain in UK- Give
organisation has largest chain in United
Kingdom market. Due to which its
major part of income comes from UK
customers.
 Employer in European country-
TESCO is the largest employment
provider in Europasian countries. Half
of is population work in stores of
mentioned company (Jiang and et.al
2020).
Weakness
 Unable to expand business in UK and
Japanese market- TESCO several
years ago tried to expand their business
in market of UK and Japan but they
didn't get good response from their so
they have to shut their business from
that market.
 Lower performance- In some stores of
country it has bad performance due to
which management is unable to earn
enough profit.
Opportunities
 Launching of Jack's store-
Management of company is planning to
launch Jack store where they will sell
their products to customers at lower
rate.
 Online shopping- TESCO has its own
website through which it sell their
products to customer. Moreover
management is also planing to launch
its mobile application to boost online
sales. Because sometimes heavy traffic
on website unable it to use by customer
so that they can easily use mobile
Threat
 Competitors- Given company faces lot
of competition from market which
affect their sales. Major competitor are
Walmart, Aldi and many more.
 Brexit- Exit of UK from European
union has majorly impact the
operational functionality of firm. Due
to this TESCO is unable to carry on its
operations in many European countries.

application for shopping.
Impact of SWOT analysis on Marketing and finance department.
 Marketing department- In above SWOT analysis it has been seen that TESCO is unable
to expand their operations in countries like UK and Japan. Therefore marketing
department of company will have to spend lot of time and amount on identify behaviour
of customer in that market so that they can make carnages in their products according to
demand of customer. Moreover to beat competition from market they can plan various
marketing and advertising strategies to attract customers from market.
 Finance department- In above mentioned matrix of SWOT analysis, TESCO wants to
launch their store by the name jack's store. For expansion, finance department have to
arrange money for launching of that store. For money they can either take loan from bank
or can launch its IPO in market (Amaechi, 2021).
CONCLUSION
On the basis of above report it has been discussed that Global business environment plays
a very important role in overall functionality of business. It helps business to identify all the
major external factors which impact the overall functionality of business. In this report its has
been discussed various factors of PESTLE analysis that help to identify impact of external
environment of company. Moreover SWOT analysis has also been discussed and their impact on
companies operational functionality.

REFERENCES
Books and journals
Hampden-Turner, C., Trompenaars, F. and Hampden-Turner, C., 2020. Riding the waves of
culture: Understanding diversity in global business. Hachette UK.
Ahmed, F. and Alam, M.A., 2021. Business Environment: Indian and Global Perspective. PHI
Learning Pvt. Ltd..
Tuleja, E.A., 2021. Intercultural Communication for Global Business: How leaders
communicate for success. Routledge.
Jiang, M., Gao, Y., Jin, M. and Liu, S., 2020. Sustainable development of the business
environment in smart cities: a hierarchical framework. Kybernetes.
Amaechi, E., 2021. Understanding Culture and Success in Global Business: Developing Cultural
and Innovative Intrapreneurs in Small Businesses. In Culture in Global Businesses (pp.
205-224). Palgrave Macmillan, Cham.