Business Environment and PESTLE Analysis of Tesco

This report explains the business environment and PESTLE analysis of Tesco, including opportunities and threats related to the business. It also includes an analysis of the macro environment to develop a comprehensive approach for Tesco to compete in the marketplace.

Global business
environment

EXECUTIVE SUMMARY
In this report business environment is explained in a precise manner along with a bried
analysis of PESTLE of Tesco. In this report opportunities and threats related to a business are
explained in a crucial manner. This project also include analysis of macro environment in order
to develop a comprehensive approach for Tesco to compete at the marketplace.

Table of Contents
INTRODUCTION...........................................................................................................................4
Background .....................................................................................................................................4
EXTERNAL ENVIRONMENT......................................................................................................4
PESTEL ANALYSIS......................................................................................................................4
POLITICAL ENVIRONMENT.......................................................................................................4
SOCIAL ENVIRONMENT.............................................................................................................5
TECHNOLOGY ENVIRONMENT................................................................................................6
ENVIRONMENT (NATURAL ENVIRONMENT) (ECOLOGY) ...............................................6
LEGAL ENVIRONMENT..............................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9
APPENDIX ...................................................................................................................................10

INTRODUCTION
Background
Tesco plc is known as British multinational groceries and general merchandise retailer.
The headquarters of this company are situated in England. This is third largest retailer of the
world and it is having revenue of 64.760 billion dollars. Founder of this company was jack
Cohen. This company operates in five countries across Europe, UK, etc. This company is
operating in approximately 11 countries. There are 4,23,092 employees working in Tesco at
present.
EXTERNAL ENVIRONMENT
The external environment is the macro environment of a business which has impact over
different operations and internal environment of a business.
PESTEL ANALYSIS
PESTLE analysis is known as a business external analysis tool used by companies for evaluating
external elements that can impact upon operations and activities of business (Bernardo, 2019).
PESTLE stands for political, economic, social, technological, environmental and legal factors.
POLITICAL ENVIRONMENT
Political factors like Brexit, pandemic have impact upon business operations. It is concluded that
all business operations must be completed according to the consideration of political aspects.
OPPORTUNITIES: (Benefit-Chance to grow sales, market share, profits)
(1) Brexit has negatively impacted upon growth and sales of the company. It has affected market
share of company. This has been concluded that market share of Tesco have declined when
corona pandemic has taken place. On the other hand, Tesco has opportunities to build up more
services for essential services
(2) Moreover, other opportunities developed for Tesco in Brexit included development of
business growth enhancement.
THREATS
(1) Political factors impact sales negatively
(2) Market share enhancement also declined due to political elements
ECONOMIC ENVIRONMENT

Economic Growth, Interest rates, inflation, deflation are the factors which have direct impact on
sales of the company.
OPPORTUNITIES:
(1) When the economic conditions of UK are stable, Tesco is able to enhance the market share.
(2) There is also opportunity for increasing the profit opportunities.
THREATS
(1) At deflation, there are problems within working effectively for the company (Fernando,
2019).
(2) When there are new economic terms provided within the company then there are problems in
managing the working process.
SOCIAL ENVIRONMENT
Define Social Environment
Social environment is the macro environment of a company which consists different
factors like culture.
OPPORTUNITIES:
(1) It helps in development of different business opportunities by handling precise employees of
the organisation.
(2) The social environment is also helpful in development of ethics and integrity in a business.

THREATS
(1) The social environment consists of major factors which can cause conflicts in a business.
(2) The social environment can also cause chaos in the organisation.
TECHNOLOGY ENVIRONMENT
The technological environment is a combination of different factors which are essential for
development of a business (Tommaso, 2017). It consists of advanced computer systems and
software which are effective in development of a business.
OPPORTUNITIES:
(1) The technological factors are helpful in development of accurate operations
(2) These factors are also helpful in storing big data of customers.
Explain how those factors will affect sales, profits, market share of your organisation.
THREATS
(1) The technological factors can lead to cause security and privacy issues.
(2) Technological factors can be costly and require huge investment.
ENVIRONMENT (NATURAL ENVIRONMENT) (ECOLOGY)
Th e natural environment consists of different living organisms which are present in the ecology.
OPPORTUNITIES:
(1)This can lead to develop a sustainable business
(2) It can provide recycling of different goods in order to develop new products.
THREATS
(1) A company can harm ecology which can be a threat to the future generations.
(2) A business organisation can also cause threat to internal environment if it does not follow
environment related policy of government.
LEGAL ENVIRONMENT
Legal environment consists of different employment legislations which are formulated by
government for business organisations in the country.
OPPORTUNITIES:
(1) The legal environment can make a company to perform legal operations which are safe for
the business organisation.

(2) Legal environment can develop many business opportunities which can increase sales and
profitability of the company (Xu, and et.al, 2020).
THREATS
2 threats as like under Political Environment
(1) Instability of the government can be a major threat to performance of a company.
(2) Tax policy introduced by the government can impact on revenue generation.

CONCLUSION
From the above stated report it can be concluded that business environment play a crucial
role in development of a business and its opportunities. This project concludes that it is essential
for a company to focus on macro environment of a business. In this project it is concluded that it
is essential for a business entity to focus on macro environment.

REFERENCES
Books and Journals
Bernardo, T.S.C., 2019. Physical exercise as a preventive and therapeutic strategy against
behavioral dysfunction in Alzheimer's disease.
Fernando, R., 2019. Agile Strategy: How to Create a Strategy Ready for Anything. Pearson UK.
Samsin, D., Marketingová řízení včetně projektové studie.
Tommaso, P., 2017. Risk and performance management: Two sides of the same coin?. In The
Routledge Companion to Accounting and Risk (pp. 137-149). Routledge.
Xu, N., and et.al, 2020. Ube2v1 positively regulates protein aggregation by modulating ubiquitin
proteasome system performance partially through K63 ubiquitination. Circulation
research, 126(7), pp.907-922.

APPENDIX
Opportunity Threat
Political Sales Market share
Environmental Growth Ecology threat
Social Positive culture Market risk
Technological Data storage Securities issue
Economical Market pricing strategy High cost of products.
Legal Business legality Business operations can be
impacted.