Demonstration and Analysis of Macro and Micro Environmental Factors of Tesco Plc

This essay analyzes the SWOT and PESTLE of Tesco Plc, one of the biggest retailers in the UK. It demonstrates and analyzes the macro and micro environmental factors of the organization.

DEMONSTRATE AND
ANALYSIS

Table of Contents.
REFERENCES................................................................................................................................1

In the field of business, strategic management refers to the process of marking the goals,
objectives, procedures and aims in specific reference to frame the competitive strategy of an
organisation (Barbosa, Castañeda-Ayarza and Ferreira, 2020). To meet the objectives of the
company strategic management is the ongoing method of organizing, observing, examination
and evaluation the functioning of an organisation. The essay will demonstrate and analyse the
macro and micro environmental factor of an organisation. It will critically analyse the SWOT
and PESTLE of the Tesco Plc which was established in the year 1919 and founded by Jack
Cohen being headquartered in London. The quoted company was one of the biggest retailer of
the UK and has primarily focused on the domestic as well as international selling of its products
and services (Awadari and Kanwal, 2019). It has around 3,55,000 employees worldwide and
more than 3400 offline stores nationwide as well as online retail. The USP of the given company
is that it follows customer-oriented approach to build its reputation and capture market by
various innovative approach. The company's internal element i.e. strength & weakness and the
external element such as opportunity and threat are to be determined through SWOT analysis and
all the external factors i.e. political, economical, social, technological, legal and environmental
are to analysed with the assistance of PESTLE analysis.
The concept which helps to determine the competitive advantage is by figuring out the
SWOT of the Tesco Plc. The biggest strengths of the quoted company is the number of offline
stores operating in the UK covering the wide range of audience. The stores are located around
more than 15 countries worldwide which aids in the distribution channel chain. The quality of
the product are relatively high with a diversified price range and capture every household in the
UK. Wide range of products such as clothing, grocery, drink line, furniture strengthens the
financial wealth of the company. Whereas, with the strengths there comes weaknesses which are
most likely due to the excess use of fossil fuel resulting in harming the ecology. The another
problem related to the company is that it focus on the offline stores rather than working online.
Though, Tesco has e-commerce platform of serving the retail market but the interface of the
website or app is not attractive (Soegoto, 2021). The quoted company highly relied upon the
developed nations rather than focusing on the developing nations. The biggest threat that Tesco
Plc would face is the competition from the different retailers such as ASDA, M&S, Amazon etc.
All the competitors has already begun and integrate the innovation and technology in their
operation but the quoted company relied on the traditional method of business. There are many

opportunities arises after the takeover of the quoted company by the Sainsbury Group which
provide the technological and distribution support from the Group. The company also has chance
to form alliance with the different competitors which would assist them in reducing the
production cost as well as shipping cost. The development is necessary and Tesco Plc is one of
the trusted retailer in the eye of customer in UK which would play as biggest advantage in
expanding its business (Merritt and Zhao, 2021). The company should start focusing on the
online retail business which is relatively increasing with the time.
The another tool to analyse the competitive merit of the Tesco Plc is with the help of six
factors which are known as macro environment elements being evaluated both on the ground of
domestic and international levels. The first factor is known as political element which plays a
key role as the business within the origin country is dependent on the policies framed by the
country. The British government has encouraged the businesses with the major changes in the
labour code they are more likely to consider the employment opportunities. UK's government is
a politically-stable and sound as well as corruption free (Rosnizam and et.al., 2020). The Brexit
also plays an important role in the political element in regard to the Tesco Plc as there are major
changes in the government strategies. Another factor which has an impact on the quoted
company is the economic element which could be witnessed with the demand and supply of the
products. While, the entire globe was trying to recover from the financial crisis of 2009, the
recent outbreak of Covid-19 pandemic has led to all the efforts being waste. Because of the
pandemic, the purchasing power of the audience relatively reduced, and they are not likely to
contribute to the other than necessity products. Social factor is the next one which has
completely based on the demographic element of the country. Rise in the population and taste of
the consumers is the social factor which has increased the chance of sell of the quoted company.
Technological factor plays a significant role as the customers wants to utilize the quality
products and the quoted company has improvised the technique in specific reference to improve
the product or service quality. Tesco Plc emphasized on the creativity to attract the consumers
due to competitive market. The quoted company has made various plans and goals to contribute
to conserve and preserve the environment as well reduce the carbon emission. The company has
better plan to dispose the waste materials which would help in the buying of products due to the
eco-friendly methods being adopted by the company (Jones and Comfort, 2019). Lastly, the legal
factor played crucial role because of the market reputation as if such big company has involved

in the legal battle the brand name of the quoted company would badly affect. The retail company
should be abided by the regulations of Health and Safety laws which aids in the profitability and
increase the sales of the retail business.
Therefore, competitive merit of the Tesco Plc could be evaluated and determined by
applying the SWOT and PESTLE framework which assist the company to figure out its strength
and weakness of the quoted company. To expand the retail business the given organization
should focus on the e-commerce market which would increase the profitability of the business
and build reputation in the given industry.

REFERENCES
Books and journals
Awadari, A. C. and Kanwal, S., 2019. Employee participation in organizational change: A case
of Tesco PLC. International Journal of Financial, Accounting, and Management. 1(2).
pp.91-99.
Barbosa, M., Castañeda-Ayarza, J. A. and Ferreira, D. H. L., 2020. Sustainable strategic
management (GES): Sustainability in small business. Journal of Cleaner
Production. 258. p.120880.
Jones, P. and Comfort, D., 2019. An exploratory case study of resilience and the leading retailers
in the UK. International Journal of Management Cases. 21(4). pp.5-18.
Merritt, K. and Zhao, S., 2021. An innovative reflection based on critically applying ux design
principles. Journal of Open Innovation: Technology, Market, and Complexity. 7(2).
p.129.
Rosnizam, M. R. A. B. and et.al., 2020. Market opportunities and challenges: A case study of
Tesco. Journal of the Community Development in Asia (JCDA). 3(2). pp.18-27.
Soegoto, F. A., 2021. Product Development using SWOT Analysis. International Journal of
Entrepreneurship & Technopreneur (INJETECH). 1. pp.1-10.
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