Analyzing the Impact of Macro Environment on Business Strategy: A Case Study of TESCO

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Appropriate frameworks analyse impact & influence of macro environment on
organisation & strategies.............................................................................................................4
Stakeholder analysis ...................................................................................................................5
TASK 2............................................................................................................................................6
P2 Internal environment & capabilities.......................................................................................6
TASK 3............................................................................................................................................8
P3 Porter's five forces model .....................................................................................................8
TASK 4..........................................................................................................................................10
P4 Theories and concept to develop strategic plan ..................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is defined as competitive moves or actions which an organisation uses
in order to attract more people and strengthen their position in market. Along with this, business
strategy outlines how activities is implemented and achieve on time frame. It assist organisation
to develop techniques as well as effective measures that leads to attainment of competitive
advantage at marketplace (Aldea, Iacob and Quartel, 2018) . By the assistance of business
strategy, an organisation can align activities in proper manner and met their targets within the
time frame. This directly leads to achievement of higher growth and retention for longer time
period in market. TESCO is taken into consideration for the present report. It is an multinational
company which was established in the year 1919 by Jack Cohen. It is one of the biggest retailer
in terms of gross revenue and ninth largest in terms of revenue. It provide grocery though
supermarket, superstore, Hyper market and convenience shops. It has more than 4,50.000
employees who perform activities in around 7000 shops which show that TESCO has high
market share. The report covers various framework such as stakeholder analysis, PESTLE
analysis, Porter's five forces and many more in order to analyse affect of macro environment
factors on productivity and performance of an organisation. Moreover, internal environment &
capabilities of company is analysed by using fame work like SWOT analysis, VRIO analysis and
so on. Later, strategic plan is develop by using various strategies and framework.
P1 Appropriate frameworks analyse impact & influence of macro environment on organisation &
strategies
It is important for an organisation to identify affect of uncontrollable factors and macro
environment in order to properly implement and activities of a company. The managers of
TESCO uses PESTLE analysis to identify affect of macro environment factors on its
performance and productivity (Baumgartner and Mangematin, 2019). PESTLE analysis includes
six factors which is mentioned below:
Political factors: This factor defines the extent to which government interfere in
activities of an organisation. Political factors includes tax rate, exchange rate, political stability
and so on. In relation to TESCO, it is associated with various political factors such as
unemployment rate, tax rates, economic condition of country, current legislation of countries

where it operates. For instance, import duty on products can impact Tesco as it import inventory
outside from UK that is East Asia & China.
Economic factors: Economic factors have high impact on activities of organisation as it
includes factors such as inflation rate, tax rate, exchange rate and many more. With reference to
TESCO, it is determined that Labour cost is one of the important element that affect on
supermarket of United Kingdom. In addition to this, there are also other factors that impact on
TESCO is price, cost & profits as well. The company can emphasise on raising cost in UK as it
is still depend on market of United Kingdom with around 28% share.
Social factor: The factors which is included are norms, belief, culture, trends, value of
people living in a country. Social factors have affect on buying behaviour of person towards
goods as well as service offer to them in market (Bentley-Goode, Omer and Twedt, 2019). In
context to TESCO, it is rely on UK customer and ensure that their needs is fulfilled and service
provided to them is met with their expectations. In order to maintain loyal customers, TESCO
develop on to one and effective connection with their customers.
Technological factors: Technology is changing rapidly and highly influence on buying
behaviour of customers. Nowadays, customers prefer to buy those goods as well as service that is
innovative and unique in market. With reference to TESCO, it established RFID technology in
order to give high in-store experience to their customers. This assist company to count inventory
& remove it after sales takes place, it also help suppliers to maintain demand and supply of
products within the store. In addition to this, it has online payment system named as “PayQwid”
by which customer can pay amount & earn loyalty points. By using new technologies, the overall
productivity and performance of company is increased that affect positively on its market
position and image.
Legal factors: This factor plays an important role in every organisation as it is important
for managers to follow all the laws which is associated with their businesses so that activities is
implemented in a smooth and proper manner (Chelliah and Swamy, 2018). If it is talked about
TESCO, it implement operations considering all the laws related to Food Retailing Commission
that assist in executing activities in proper manner. This factor has a high affect if company did
not follow legislations as per the rules made by government.
Environmental factors: This involve factor such as change in climate, targeted
population, pollution control, eco friendly products and so on. Considering all environmental