Business and Business Environment: PESTLE and SWOT Analysis of Tesco

This report discusses the impact of macro environmental factors on Tesco using PESTLE analysis and identifies its strengths and weaknesses through SWOT analysis. It also evaluates how these factors influence the decision-making process of the company. The report concludes with key reflections and findings.

Business and Business
Environment
Table of Contents
INTRODUCTION...........................................................................................................................3

MAIN BODY...................................................................................................................................3
Identify and discuss the various macro environmental factors that have an impact upon the
organisation using PESTLE Analyses with their positive and negative impacts........................3
Apply a SWOT analysis to organisation to identify their key strengths and weaknesses.
Explain the interrelationships these have with the external factors previously discussed..........5
A critical reflection of key findings and evaluate how they influence the decision-making
process.........................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES:...............................................................................................................................9
Books and Journals.....................................................................................................................9

INTRODUCTION
Business environment is collection of all forces and factors that can be internal or
external and beyond the control of business with influences also on functions, operations and
growth of organisation. Business environment helps in identifying new business opportunities
and assist in future growth planning and helps in improving overall performance and profitability
of business. This project is based on business environment using PESTLE and SWOT analyses it
identifying strengths and weaknesses of business.
MAIN BODY
Identify and discuss the various macro environmental factors that have an impact upon the
organisation using PESTLE Analyses with their positive and negative impacts.
PESTLE Analyses
PESTLE Analyses is the strategic framework used for identifying external and internal
factors that can affect environment of business. PESTLE Analyses of Tesco company for
examine the business environment for proper functioning of business.
Political Factor – This factor of PESTLE analyses the impact of tax policies, environmental
regulations and trade restrictions, trade tariffs and economical stability. Tesco has many rules
and regulation formed by government which help them in trading without any complications and
interference by government.
Benefits -
Political factor helps the management of Tesco company in smooth function of business
in political environment and also make pressure on Tesco to make products that are good for
their well being in political factor.
Drawbacks -
Tesco as an multinational company, finds it difficult to corporate within the dynamic
market of international trade with their own rules and regulations.
Economical Factor – This factor includes the term like poverty, inflation rate, living standard of
customers etc. Tesco delivers the premium quality products to the customers, according to their
purchasing power and helps them in achieving their goals.
Benefits -

While providing the products according to its customers need help Tesco in achieving
their goals and objectives through diversification of their product line.
Drawbacks –
Some times, Tesco failed in fulfilling the need and preference of its customers and ends
with making huge loss on product development strategy in business.
Social Factor – Changes in the need and taste of the customers are examine here. Tesco has
worldwide presence and their marketing tactics helps them in achieving their position in
international market.
Benefits –
Tesco has various advantages from Social factor, as it helps in more development of
company in international market and finds the new area of growth in international market.
Drawbacks -
Serving customers at international level can be difficult in some times, as customers are
from different tastes and cultures might get affected through any policy and marketing strategy.
Technological Factor – Every company have to manage with the technological factor for
serving in the dynamic nature of business environment. Tesco uses the new technologies for
maximising the cost of production and their efficiency to complete the task in time.
Benefits -
Tesco has many benefits from the technological change in environment as it reduces the
time taking factors in delivering the final products to its customers in online purchasing.
Drawbacks -
Increasing trend of online shopping has reduced the demand of offline stores.
Legal Factor – Legal policies of any country can affect the whole organisation as it includes the
factors like industry regulations, licenses and permits for operation of business entity. Tesco has
many operational functions which are followed by rules and regulation formed by government.
Benefits -
Tesco has to follow their rules and legal aspects of government are important in
regulation of business.
Drawbacks -

Legal interference on business environment of company can lead them in major issues
like they have to follow some rules and make sure to not offend those restrictions formed by
government.
Environment Factor – This factors are related to the issues of natural environment like water
pollution, plastic waste, climate change. Tesco has corporate social responsibility of minimising
the waste from their store and to use resources in effective manner.
Benefits -
In relevance to environmental factor, Tesco is committed and working on minimising the
amount of carbon footprint in upcoming year as plan of their CSR.
Drawbacks -
Limited availability of resources are major drawback to Tesco and all industries.
Apply a SWOT analysis to organisation to identify their key strengths and weaknesses. Explain
the interrelationships these have with the external factors previously discussed.
SWOT Analyses
SWOT Analysis is strategic method used by many companies in identifying their
strengths, weakness, opportunities and threats that are related to their business and helps in
gaining competitive advantages. This method help management team in recognising areas that
are performing well in business. Here the SWOT Analysis for the Tesco company is explained
below -
Strengths
 Customer oriented – Tesco is more
customer oriented company. It has
objectives of satisfying their needs and
preferences according to the market and
customer values. Tesco also has strong
customer base which helps in building
more loyalty in customers.
 Diversification strategy – Tesco has
huge range of different brands and
products according to the customers
purchasing power and that are also
Weaknesses
 Cultural differences - Tesco delivers
variety of food products and other
services. Tesco has many stores at
global level which has customers that
are of different cultures and
backgrounds.
 Leadership skills – Lack of leadership
skill in working professional of Tesco
are considered as weakness and it has
to be improved for better work culture

successfully satisfying the different
needs and tastes of the customers. It has
many diversified products like home
decors, grocery products and food
production.
and environment.
Opportunities
 Technological changes – Continuos
changes in technology has also affect
business operation. It brings many
opportunities like growth in production
method through change in technology.
 Globalisation – Going global for
business purpose can also be beneficial
for the growth of Tesco and it has many
growth opportunities in international
market.
Threats
 Competition – Tesco is company with
many competitors in market whether it
it is global companies or domestic
companies. Tesco has to compete in the
international market in order to
maintain their position in global
business environment.
 COVID 19 – Season of pandemic is
crucial for any business environment,
as it ruin every business and creates the
sense of succession among many
companies.
A critical reflection of key findings and evaluate how they influence the decision-making
process.
During the decision making process of company, there are many factors which has their
own influence on the decision made by management. Tesco has used decision making strategies
for their long term and short term achievements of goals with minimising the risk factor involved
in that. Some weakness and threats factors has been analysed through SWOT analyses of Tesco
and how they had impact on decision making process are explained below :
Cultural Differences – The term cultural dissimilarity between customers from global
market is major task that Tesco had to improve. Cultural differences also affects the decision
making skills of management through if they are not understand by the domestic people or there
is language barrier in communication can affect the decision making process of organisation.

Leadership Skills – This ability of leader has major role in proper functioning of the
company. Tesco has many working professional with good strategic skills that helps in guiding
whole organisation into same direction for achieving the universal goal of making profit through
them. If leader is not effective, less creative and does not have ability to inspire or motivate
employees can also affect the decision making process of company. Leadership skill plays major
role in making or implementing the decision in whole organisation. Good leadership skills in
managers requires them to make tough changes for the well being of organisation and
employees.
Competition – Tesco has many competitors in market, and has many strategies which are
helpful in sustainability of company in international market. There are many aspects in global
business environment which can impact the decision making skills of managers in company.
Change in product of competitor company can cause changes in the perception of customers with
their needs and preference. Increasing in the competition can lead to increase in pressure and
more stress in the management team which will affect their decision-making process.

CONCLUSION
From the above report it has been concluded that, Business environment has many
internal and external factors like technology, social, environmental and how they affect the
business in positive and negative impact on business. It further explains the SWOT Analyses of
Tesco in order to identify their strengths, weakness, opportunities and threats like leadership
skill, diversification strategy, competition in market. AT the end of this report, it describes the
key reflections of weakness and threat evaluated through SWOT Analyses in relevance of chosen
organisation. It also explain the key findings in brief and how they affects the decision making
process of Tesco.

REFERENCES:
Books and Journals