Global Business Environment: PESTLE Analysis of Tesco (BM461)

This report presents a PESTLE analysis of Tesco, a multinational grocery and general merchandise retailer. The analysis examines the political factors influencing Tesco, including the impact of government policies and international relations, such as the EU referendum. It then assesses the economic factors, highlighting the company's dependence on the UK market and the need for diversification. Social factors, such as changing consumer preferences for "one-stop" shopping and health-conscious choices, are also explored. The report further analyzes the impact of technological advancements, particularly online platforms and inventory management. Environmental factors, including the pressure to reduce carbon emissions, are also considered. Finally, the legal factors, including compliance with international regulations and financial services acts, are addressed, along with the need for strategic planning to mitigate risks. The report concludes by emphasizing the importance of adapting to these diverse factors for Tesco's continued success in the global business environment. The analysis is supported by references to academic sources.

Global Business Environment

Table of Contents
PESTLE ANALYSIS OF TESCO BY CONSIDERING KEY DRIVERS OF CHANGE.............1
REFERENCES................................................................................................................................3
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PESTLE ANALYSIS OF TESCO BY CONSIDERING KEY DRIVERS OF
CHANGE
Political Factors affecting TESCO Plc:
TESCO operates in more than 10 countries all over the world which exposes it to many
political factors that can affect its business. EU referendum has proved to be a huge risk factor
for many of its investors. Government of many countries are encouraging firms that are creating
employment opportunities for the domestics (Wild, Wild and Han, 2014). Management of
TESCO needs to plan strategically on how to take leverage of this opportunity as the company
holds a huge employment potential.
Economic Factors affecting TESCO Plc:
Although TESCO operates in many countries, it is highly dependent on its share
equivalent to 30% in UK markets for most of its profits. Economy of UK is going through a
financial crisis which has decreased the disposable income of people causing people to shift to
goods of lower quality. Thus, the company should focus to generate more revenue out of
international markets and diversify its product range to target larger section of consumers
internationally.
Social Factors affecting TESCO Plc:
Recent trends in consumer shopping in UK are aligned towards “one-stop” and “bulk-
shopping” due to which the company has increased the non-food items that it offered across its
stores. Nowadays, people are showing an increased concern for health and safety issues which
has changed their preference towards food items. This is a great opportunity for TESCO to
diversify its product range and introduce more and more products into the market after extensive
research which caters to these changing needs of the consumers.
Technological Factors affecting TESCO Plc:
Recent technological advancements have brought many opportunities for TESCO. First
and foremost is the development of online platform which gives the consumer the luxury of
shopping while sitting at home and quick deliveries. Many technological inventions have been
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made in inventory management as well like automation of stock-management. TESCO needs to
make sure to be attentive to all these technological changes and adapt as quickly as possible.
Environmental Factors affecting TESCO Plc:
With the increased stress and emphasis on environmental issues such as global warming
and climate change, it becomes imperative for TESCO to give attention to these issues and come
up with strategies and adopt measures to decrease its carbon emissions and use of greenhouse
gases. TESCO is encouraging its customers to shop online to reduce the consumption of fuel
which goes in line with its efforts to increase its sustainability standing (Bryman and Bell, 2015).
Legal Factors affecting TESCO Plc:
Since TESCO operates internationally, it gets very tricky for the company to protect itself
from legal threats because each country has its own set of rules and regulations. The company
recently faced a lawsuit on grounds of misrepresentation in financial statement and deceiving the
investors. TESCO is also associated with financial services so it needs to abide by The Financial
Services Act (2012) which was implemented in the UK. Management of the company has to
make some strategy which helps it to abide by all the legal rules and regulations and protect itself
from any future legal lawsuits.
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REFERENCES
Books and Journals
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Wild, J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
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