Business Environment Report: PESTEL Analysis of Tesco PLC - MOD003353

This report provides a comprehensive PESTEL analysis of Tesco PLC, examining the political, economic, social, technological, environmental, and legal factors impacting the organization's business environment. It discusses the influence of government policies, economic conditions, social trends, technological advancements, environmental regulations, and legal frameworks on Tesco's operations. The analysis covers aspects such as taxation policies, market instability due to Brexit and COVID-19, population demographics, technological adoption, sustainability concerns, and compliance with employment and safety laws. The report aims to provide insights into the external factors that affect Tesco PLC's performance and strategic decision-making.

Business Environment

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................3
PESTEL Analysis of Tesco PLC.................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
TASK 1
TASK 2
TASK 3
PESTEL Analysis of Tesco PLC
For a business organization this is important to known about the factors that can affect
their business operations in market place. In market place various factors can influence the
business practices of the company. As a retail sector organization, Tesco PLC have to face
various issues that can affect the productivity of organization market place (Nguyen and Le,
2020). This thing make the analysis of external factor important for the business firm. These
external factors of the organization are known as macro environment for Tesco PLC. To
maintain the productivity of the organization in market place. These external factors are
classified in six categories which are explained using an acronym which is PESTEL. Each of
letter in Acronym represents a particular external factor for organization.
Political Factor
Economic Factor
Social Factor
Technological Factor
Environmental Factor
Legal factor.
These are main external factor that are important to study for organization. Each factor
can affect the organization in different manner. By analysing this factor organization can take
proper actions and change in the organizational operation to keep organization productive in
target market. There are different factors are important for Tesco PLC which can be considered

to develop effective practices with in organization operation to get better result with performance
of retail store in local and international place.
Political Factor
Political factor are most important for the organization which are performing business in
national and international market. Political factor are mainly concerned with the decision and
changes that are implemented by the government in business process and guidelines with in
country. Various decision of government can affect the performance and operation of
organization in market place. Most of the times decisions of government related to taxation
policy, foreign policy and business policy in country (Jelassi and Martínez-López, 2020). These
policies are most important to consider for the retail sector organization. Foreign policy can
affect the international business of organization. For example Brexit is major factor for company
in UK. This decision of government can affect the business policy of Tesco PLC after the Brexit.
The business policies and taxation policy of UK government are effective and positive for the
business of organizations like Tesco PLC. There are different opportunities are provided by the
government to the retail sector company to efficiently perform business operation. Taxation
policy of government is also productive for organization in market place. This is how current
political factor are positive for Tesco Policy.
Economic Factor
Economic factor are most crucial for business organization. The main objective of the
organization is to earn maximum marginal profit in market place. In local and international
market there are various challenges faced by organization. Some of major economic factor for
Tesco PC in market place are- Taxation policy of government, exercise duty on goods, economic
condition of country and market condition. All these factors can be considered by the company
to make effective changes in the budgeting process to generate maximum profit in market place.
Taxation policy that is implemented by the government is effective for organization and it is
providing opportunities to company to earn more profit in market (Özbük and Coşkun, 2020).
The taxation on the goods and raw material is also low to provide more business opportunities to
the organization to gain more profit with business operations. The economic condition of UK
market is bigger challenge for Tesco PLC in market place. With Brexit concept market condition
in the United Kingdom are unstable. This is major economic crisis for organization. Due to

uncertainty in market place, investors are showing low interest in UK market place. It has
affected the process of capital development for organization. It is affecting the fund rising
process for the organization. Less investment can reduce the performance of the organization in
market place and also it can affect the business process of organization in national and global
level. The last thing that can be considered in the economic factor is market condition. Crisis due
to Covid 19 has affected the market majorly and it has affected the business of retail sector
organization. It can affect the long term goals of company and business strategy in market place.
Social Factor
Social factors are most crucial for organization and these factor are related to the relation of the
organization with the stakeholders. To keep the organization productive in market place this is
important for the organization to develop better relationship with stakeholders in effective way.
There are various factors are considered in the social factor for retail sector organization like
Tesco PLC. Main social factor for Tesco PLC are- population of locality, education level of
people, diversity and per capital income. These all factor are need to be considered by the
organization to generate higher benefits in market place. Population is most important factor for
organization. This is directly related to the customer base of the company in competitive market.
To become leading retail sector organization among the competitors. This is important for
company to develop larger customer base to improve the positioning in market place. The
population of UK is enough to develop effective customer base of company (Nguyen and Do,
2018). High population can provide opportunity to the organization to improve the business of
organization in market place. Education level if the customer’s base is also important for the
organization for the business process of organization the development of work force in UK.
Literacy rate in UK is high and it can help the organization to implement latest technology in
business operation and it also can provide efficient candidates in order to improve the work force
of company. Diversity in population can help Tesco to attract customer of different background.
Technological Factor
In current time technological factor are most important for organization. Technological
factors are related to the efficiency of the organization with in organizational operation.
Technology is also major trend in market place. People are looking for more personalise the
buying process in order to get high satisfaction level. The technology that is used by Tesco PLC

is one of the latest technology in market place. The technology used by Tesco PLC is compatible
with latest technology in market. This advantage in technology can be used by organization to
attract more customer to use product and services of Tesco in the competitive market. There are
different technologies like RFID, AI and Automation are used by the organization to retain
higher productivity in market place. This is how Tesco PLC have advantage in market place due
to advance technology.
Environmental Factor
In current time people are more aware of the environmental factor. Sustainability is major
market trend in 2019 – 20. People are looking of the products that are sustainable and less
harmful to the environment (SIKOS, KOZÁK and KOVÁCS, 2019). This is challenging factor
for organization to develop sustainable products that are less harmful to organization.
Environment protection laws are also forcing the organization to implement effective practices to
keep environment safe and secure. Tesco PLC have to make some improvement in the business
process to reduce the carbon footprint and improve sustainability.
Legal Factor
Legal factor are related to the laws that are followed with in the country. There are
various laws that are need to be followed by the business organization are- employment law,
labour law, minimum wage law and health and safety law. All these legislations are need to be
followed by organization ot keep their business process effective in market place (Chacón-
García, 2017). Legal authorities ensures that organization is following these laws efficiently or
not. If the organization is not following these laws then they are liable to face legal action. This
is how all the decisions and business process of Tesco PLC are highly affected by the different
legislations.
CONCLUSION

REFERENCES
Books and Journals
Chacón-García, J., 2017. Geomarketing techniques to locate retail companies in regulated
markets. Australasian Marketing Journal (AMJ). 25(3). pp.185-193.
Jelassi, T. and Martínez-López, F.J., 2020. External Analysis: The Impact of the Internet on the
Macro-environment and on the Industry Structure of e-Business Companies.
In Strategies for e-Business (pp. 49-95). Springer, Cham.
Nguyen, H. and Do, L., 2018. The Adoption of Blockchain in Food Retail Supply Chain: Case:
IBM Food Trust Blockchain and the Food Retail Supply Chain in Malta.
Nguyen, N. and Le, P., 2020. Macro-environment of Second-hand Clothing Business in Helsinki.
Özbük, R.M.Y. and Coşkun, A., 2020. Factors affecting food waste at the downstream entities of
the supply chain: A critical review. Journal of Cleaner Production. 244. p.118628.
SIKOS, T.T., KOZÁK, T. and KOVÁCS, A., 2019. New retail models in online and offline
space. Deturope. 11(3). pp.9-28.