Marketing Fundamentals Analysis and Evaluation for Tesco

This project analyzes the internal and external environment of Tesco using marketing fundamentals and PESTLE model. It includes SWOT analysis, opportunities, threats, and challenges faced by the company.

MARKETING
FUNDAMENTALS
ANALYSIS AND
EVALUATION

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Internal environment Analysis of Tesco......................................................................................3
External Environment Analysis of Tesco...................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing fundamentals is considered to be the rule of the main marketing which
revolves in and out of the four things which are product, price, promotion and place. It can be
said as the evaluation of the research of the market place which aims to determine the
performance of the company which is required for better success in the business. For this project
the chosen organization is Tesco which is UK British multinational retailer in grocery stores
which deal with different types of products. In this project the process and stages of marketing
are considered which impacts the businesses that are very helpful for the organization in the
interrelation of the issues. This is known as the reorientation of the operations and navigation
which are considered to be complicated for the different government. In this project the role of
marketing environment and other situational analysis has been explained with the help of
models. This project helps with the determination of the targeting positioning and marketing mix
strategies.
MAIN BODY
Internal environment Analysis of Tesco
Tesco trading as the third largest retailer chain in super markets. The food retailer
company aims in serving the customers across UK. It comprises 4008 supermarkets stores and
various online home delivery channels are located at various networks. Tesco is uniquely
focusing on the food and grocery stores. About more than 1 million individuals are estimated to
shop every week from their online and other grocery stores. Brand has set various trends in
supermarket design by offerings with wide range (Teresiene and et.al, 2021). Different facilities
being provided by the brand like free parking space, food curt, kid zone, ATM section, recycling
centres and express lane. The company is mainly focusing on adopting eco friendly changes by
strategic acquisitions with various subsidiaries.
More than a year the outbreak of highly infectuous virus known as covid -19. The
coronavirus has impacted many of the businesses around the world. Changes in the extremal
environmental caused by virus impacts business of the retail industry. In retail industry have
affected by the Covid, businesses handling day-to-day essentially such as the grocery stores,
medicate stores and suitable stores have remained in the neutral state. Only the retailers of the
purchasing goods items deemed not essentially such as apparel and home appliances have

stagnated (Osburn and et.al., 2021). Tesco was not much affected by pandemic as with the
analysis the annual results released by the company confirms of increasing of the sales and have
benefited from surging demand in supermarkets over the past years, during Covid the profits
have taken major hit from the costs related operations during pandemic. Internal environment
analysis mainly includes Internal factors affecting the company mainly includes the detail
analysis of the strengths, weakness, opportunity and threats facing the company.
Strengths : The strengths of the company are internal factors which helps the
organisation to be successful and effective. Strengths not protect the market share in the existing
market but also helps in penetrating in the new markets. Tesco the biggest supermarket in the
world which is globally recognized Grocery store. The company has efficient network of the
suppliers which helps in reducing the costs by effectively managing the waste management.
superb performance in the new markets : as the company has build expertise at entering the new
markets and making success of them. The company has also listed on the London stock exchange
and FTSE index. With the diverse retail stores being launched by the company like the express
of Tesco, Tesco metro, home plus and jacks business. The expansion has helped the company in
building the new revenue stream and also diversified the economic cycle risk in the markets in
which it operates Tesco also have the strong brand portfolio as it has invested in building a
strong brand which helps organization in expanding into new products categories. Tesco has
also built the strong distribution network which captures majority of the potential markets and
with strong cash flow systems over the years. Which helps in providing the adequate resources
for the company in hands for expanding into more markets. The company has also updated with
the latest technology pace by adopting the field of M commerce as it provides the advance
features by adopting the mobile apps for the online customers for purchasing the products.
Company also have raised goodwill by building the strong base which aims to result in
promotions and also aids in providing required training to personnels. Human resources is
basically considered as an important part of the organization for this the company tend to recruit
most suitable candidates and also provides them with appropriate training for improving the
efficiency. (SWOT analysis of Tesco (Tesco SWOT), 2021). The company has also invested huge
resource for providing them with knowledge and skills required by firm. which results in highly
skilled and motivated employees. The company has also builds the relations with the users by
providing additional options for collecting the club card points by the transactions with other

retailers, as this uses the reward points mainly associated with the outlets, e loyalty programs and
other schemes .
Weakness: Being major challenges faced by firm and creates various issues and
problems for organization to handle. With company's website being crashed causes enterprise to
face many challenges specially in the field of online selling. Apart from that firm also face isuue
regarding providing customers with services. As by switching to the club card option suddenly
without informing to the customers resulted in furious and angry customers. the biggest
weakness of the company in increasing of the debt because of growing global networks which
has resulted in huge financial loss for the company. The institution must improve the areas of
weakness and must build the competitive advantage and strategic positioning. The profitability
ratio of the company and net contribution are below average. The marketing of the company
products Is not desired properly (Soegoto, 2021). Positioning of the products, As the segment
does not provide any USP value for customers get attract. As Tesco not being effective with
demand prediction, which leads to having high priced goods as well as lower productivity and
sales, comparing with other competitors. Moreover, the company faces legal issues and lwas
suits which affect the company brands image and by avoiding the prosecution of the whole
scandles has also impacted the company images negatively.
Apart from that another challenge faced by company that the company not being able to
plan finances effectively. The unsafe products of company has proven to be the weakness of the
company as for instance the unsafe products has turned out and endanger customers lives. Also,
the company has limited geographical area as compared with the other big brands. The
supermarkets is also not practical for providing the after sale services. As the goods of technical
nature cannot be soled in the supermarkets. The supermarkets of Tesco has low number of
outlets, as the company have high variety of franchises for order taking, but they don't have the
correct dine in and dining establishments. Which results in falling the fortune of the company all
over. Further more the company is facing the disloyalty issues of the franchise employees but it
is difficult to control each employee who is disloyal. Also, the major weakness of the company
is that there net incline is not matching to the financial evaluations and the forecasts. with the
low prices strategy in the British market by the company may attract conscious customers but
this will result in decreasing the profitability of the company.

Opportunities: These are defined as the favourable situation which results in positive
outcome for the company. The new environmental policies are considered as the opportunities
for the company because it helps in providing various advantages in the field of new technology
as well as grabbing more attention customers and gaining market in the product new product
category as it intent in acquire more benefits from innovation. The alliance and partnership with
various tech firms has provided various advantages and growth for the company during
pandemic (Vander Weyer, 2021). Also, population of the Asian countries enjoy the active
ingredient which is being used by company mainly cheese and meat balls. The company is also
expanding markets in the internationally with this the new opportunities will develop for the
company by expanding an exploring with value of 218.5 billion. The development of the market
leads towards the dilution of competitors advantage. The online platform are considered as the
opportunity for Tesco as it help firm in investing huge cost on improving their online platforms,
also provides benefits as during pandemic and social distancing times leads in increasing the
trend of the online shopping thorough websites among various people. Furthermore, the new
technology provides various opportunities for the company as it provides new operating ways
with different pricing strategy and so enable the firm in maintaining the loyal customers with
great service with various factors (Scharpenberg and et.al., 2021). With the expansion of the jack
store regarded as new discount store has increased the opportunities for company by providing
low cost rivals in the market. Also by increasing the joint venture aids the company in partnering
with various local business and launching new products results in better performance.
Threats: There major threats to Tesco which is related to the certain changes in the rules
and regulation of the country towards the retailers. This is considered to be very big factor for the
business which impacts the ways in which the report has presented the organization with care
and competitive analysis (Yiqiong, 2020). The growth in the overall competition in this market
has been a very negative result for Tesco. New technological improvements which are
implemented by the competitors is considered to be the factor that influences the total cost of
production of this organization. Increasing Covid-19 in the upcoming years is certainly a threat
for the company as it leads in major shifting in business online but the e-commerce have saved
Tesco. The Lock down due to covid has increased the economic recession which has resulted in
deceasing the purchasing power of various individuals and leads to unemployment. This can lead
to impacting the UK economy that can again lead to the downfall of the sales numbers of this

business. The issues between the UK and EU which has lead to the Brexit has caused issues in
the trading, supply and logistics of the organization. This is considered to be a big threat to the
organization as it impacts the company because Tesco import 80% of supermarkets products
from EU, so this will increases the taxes on imports due to Brexit which lead to increase in cost
and retail price of products. The issues which this business is having during supply chain
management it is considered to be threat to the business. Also, rising in the pay level process for
the employees will be considered as the major factor which will leads towards pressuring the
company profitability.
Also, with regular increase in competitors in supermarkets like the aldi, Walmart results
in having high demand for more profitable seasonal goods. The trends of the consumers effects
the companies of the business as the health conscious customers are choosing more healthy and
home-made foods instead of junk food. Moreover, the company product being advertised under
the name of Woodside farm by some of the marketers , this will be considered as there is no such
farm regarded as Tesco asset. For overcoming the threats being faced due to covid the company
must optimize the present systems for meeting the challenges, while creation of safe environment
for the consumers and employees (Béné and et.al., 2021). This will help in scaling up the digital
commerce platforms to adapt with the demands, for leveraging their physical store network, also
adopting various statistical distribution channels and other models for critically meeting the
demands due to Covid and must shape the changing customer habits.
External Environment Analysis of Tesco
The external environment of the company is being analysed by the pestle model. This
tool is used for understanding the external economic influences on the industry, businesses and
particular sector. These force of the environment are external and it cannot be easily controlled
by the firm easily. By examining the external environment will help the company in
understanding with the broader view and encouraged the management to think strategically to
avoid the change and negative impact on the business operations.
Political factor: Affecting company generally includes Governance system based on
democracy will impact the external environment of company. The company may be benefited
from economical freedom being provided by government which aims to promote and enhance
free trade. Frequent changes in the rules and various legislations, political insatiability and
economic conditions of various countries will affect Tesco execution of operations and decision-

making process. Also, the pressuring groups of the government will influence the policies and
overall business for this the company must collaborate with several groups as well as build trust.
Due to the financial instability in the world, government will induce the company in creating the
job opportunities for domestic individual for removing unemployment. Also, the trade policies
and fiscal policies will also affect the business these policies must be considered in order to make
more profits and also invest in several new products and technologies (How you can use PESTEL
Analysis for The Tesco Company, 2021). Brexit has impacted the businesses in UK at great level
as increasing in uncertainty due to change in policies and regulations has impacted the retail
markets at great level. Business greatly the company should actively scan the factors and ensures
the quick adaption with changing policies and resetting the priorities. Further more the level of
corruption especially isolating the consumer service sector. Moreover, increasing the level of
sales in the dynamic markets has impacted by trade wars between various countries as because
the business governs due the strict trade regulations imposed on china and American products
will regulate the trade practices of Tesco. The company had a huge impact due to multiple taxes
and legislations being imposed by government as it increases the prices and affects various
retailers profitability across UK.
Economic factor: These involve different problems that organization may face earlier
regarding the inflation in prices of products. Also, firm being impacted because of basic ranges
of prices of other companies. For instance the global strategy results for firm in increased high
doubled priced wheat in addition affects the supply and demand. This has ended in the customers
paying out more for their weekly shopping of the company by underlying the higher prices of the
commodity. Another economical factor of the company marketing strategy which has decreased
the income of people due to rise in energy pricing occurs resulting in general upward trend in
retail price, which reflect the total expenditure on consumed energy and further reduced
accessibility in credit of mortgage due to decrease in demand and cost rises the interest-rates
which arises the difficult for both the business & customers for borrowing and investing.
Furthermore, due to increase in unemployment rates and rise in taxes results in cutting
the price as well as launching the re branded value chain which results in declining the consumer
confidence and behaviour towards the company (Panzone and et.al., 2021). Also, more of the
economic factors which has impacted Tesco includes, labour costs, inflation rates, interest rates,
infrastructure quality in the supermarkets, income of households and saving rate, government

spending concerning monetary and fiscal policies and types of economic system of the country in
which supermarkets are operating will affect the company at economic level.
Social factor: Societies culture, beliefs, attitudes of the population, customs of society in
which business functions. By concerning these factor the company will understand customers,
lifestyle trends, attitudes and opinions about the products and service, consumer buying pattern
of a given market. The ageing population as the demographic changes is considered as the major
social factors which affects the grocery retailers, also the changing lifestyle trends. Purchasing
power and customers tendencies for taste and preferences are gradually started to increase cost of
food, fuel, raw material as more number of customers may switch form purchasing the premium
and organic products ranges to the standard and value ranged products (Aparicio and Cavallo,
2021). The social stratification, respect hierarchy are some factors which influence, marketing,
human resources management strategies of Tesco. The hierarchy composition with more
introduction of formal culture will suit the company while entering into new markets with the
high power distance. Furthermore, as few people are eating out due to pandemic, the company
saw a huge increase in sales for mostly their home ranged products.
Also, the demography, class structure, hierarchy and many others in the society, as well
as the culture, entrepreneurial and the nature of society, leisure interest. The gender role in the
society will affect the advertising strategy, as it is highly patriarch culture may also be adopted
according to the prevailing patriarchal laws, company will receive the backlash from society
(Peng and et.al., 2021). With this the company will face difficulty in ensuring the gender
diversity across all the management levels in managing domestic responsibilities. The power
structure in society are considered as the major factors which will affect the company.
Technological factors : Factors tends to disrupting various businesses across global
industries. Some new trends may impact the corporate business environment with AI, by using
the machine learning and big data analysis to predict the consumer behaviours. Also, the
technological development is accelerating the pace with this the companies are extensively
investing in the emerging technologies to stay ahead of the competition. So for this it is
important to examine and anticipating the trends of the business. Technological factors of the
company includes business interruptions IT recovery procedures by investing in a remote IT
disaster recovery site, so that any data must nit be lost in any of the stores whilst operating the
supermarkets. Social media has played beneficial role for the supermarket industry as the mobile

apps including Facebook, twitter have also provided many facilities regarding promotion on their
platforms with their pages. Also, streamlining videos, downloading and streaming music, various
non groceries and e-books also being developed with technical advancement. E-commerce and
related technology infrastructure development must be evaluated fir the company, also Tesco
should assess the preferred choice of the mobile payment of the consumers in the local economy.
With high rate of innovation and development may tend to affect overall market. Not just that
but Tesco was able to understand different product life cycle length and time consumed along
with product development.
With competitors investing in various automation techniques resulting in decreased cost
and shift from manual towards automated procedures. Also, the research and development trend
in Tesco will reflect the protectiveness of the firms towards introducing the innovative solution
for consumer needs. For this the company must refine the understanding of emerging
technologies which benefits the firms in creating the value for the customers. Furthermore,
organization may invest in various techniques under transport which aims at providing less
carbon emission and reducing pollution and providing environment improvement. Tesco have
introduces new technologies for improving packaging and manufacturing.
Environmental factors : Withy having various factors which tend to focus on impacting
the operations of firm. As with new and improved government rules and norms regarding
environmental standardization influence the profitability of firm. Having reduced utilization of
poly boxes in the working of supply chain of Tesco help in launching of returnable bins which
company uses for fish products. While entering into new markets or improving or starting new
business under same market firm requires to evaluate the standards required. Not just that but
organization also have gained many in-depth understanding of new regulations so that they may
tend to avoid different lawsuits (Rutti, Garcia and Helms, 2021).
Legal factors: These factors govern the conditions affecting the company, these mainly
includes various regulation for operating in market and also for resolving any conflicts. If the
firm's legal management system is not efficiently working then there maybe numerous
challenges being faced by the company. Different types of health and safety, legal restrictions,
and chemical, data protection, and many more. These factors concerning the environment will
transform the company operation. Brand should also consider the employment laws in the
country for operating in the consistent business model, the company must also assess the

business laws, common laws, data protection laws, intellectual property laws, consumer rights.
Furthermore, the company should maintain the transparency under the judiciary system of rules
and various processes which is essential for effective and efficient decision-making (PESTEL
Analysis of Tescos, 2021). Also, the consumer right bill gives the policy for clarifying the
standards for consumer by clarifying the terms and conditions which is considered unfair. These
policies are continued by various changes within regulatory bill which tends to directly impact
the food market.
CONCLUSION
From the report it has been concluded that the Tesco like other organization has been
very poorly impacted due to the lack increase in the recession and other economical impacts in
UK. However, this project has been able to analyse the ways in which this company can improve
its business practices in order to improve its organizational performance. This project has been
able to understand the process and stages of marketing which it can use to increase its
productivity. This project has also helped the business in the developing a strong understanding
of the role of the marketing environment which impacts the other situational analysis through the
application of models. In this project the determination of this company's segmentation,
positioning and marketing mix strategies has also been evaluated and examined.

REFERENCES
Books and Journals
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Osburn, L. and et.al., 2021. Teaching social work skills-based learning online during and post
COVID-19. Social Work Education. pp.1-20.
Panzone, L. A. and et.al., 2021. The impact of environmental recall and carbon taxation on the
carbon footprint of supermarket shopping. Journal of Environmental Economics and
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Peng, K. and et.al., 2021. A method for estimating neighbourhood characterization in studies of
the association with availability of sit-down restaurants and supermarkets. International
journal of health geographics. 20(1). pp.1-16.
Rutti, R. M., Garcia, F. and Helms, M. M., 2021. Entrepreneurship in Peru: a SWOT analysis.
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Scharpenberg, C. and et,al., 2021. Analyzing the packaging strategy of packaging-free
supermarkets. Journal of Cleaner Production. 292. p.126048.
Soegoto, F. A., 2021. Product Development using SWOT Analysis. International Journal of
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Teresiene, D. and et.al, 2021. The Impact of the COVID-19 Pandemic on Consumer and
Business Confidence Indicators. Journal of Risk and Financial Management. 14(4).
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Vander Weyer, M., 2021. Why private equity sharks are shopping at Morrisons. Spectator.
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Yiqiong, W. U., 2020. The Marketing Strategies of IKEA in China Using Tools of PESTEL,
Five Forces Model and SWOT Analysis.
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Through: <https://embapro.com/frontpage/pestelcase/19901-morrison-rfid>
PESTEL Analysis of Morrisons. 2021. [Online] Available Through
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