Business Strategy: PESTLE Analysis of Tesco Post-Brexit Impact

This report provides a comprehensive analysis of Tesco's business strategy in the context of Brexit, utilizing the PESTLE framework to assess the political, economic, social, technological, legal, and environmental factors impacting the company. It examines both the positive and negative effects of these factors, highlighting challenges such as customer engagement, change management, development of business practices, and supply chain issues. The report further proposes a business strategy for the future of Tesco, focusing on improvements in human resources, marketing, finance, and IT departments. Concluding with recommendations for Tesco to enhance its business operations, manage risks, and achieve sustainable growth in the post-Brexit environment, emphasizing the importance of ethical practices and strategic management.

Business in context

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................4
Positive and negative impacts of PESTLE on a business...........................................................4
TASK 2............................................................................................................................................6
Key challenges faced by a business entity using PESTLE analysis...........................................6
TASK 3............................................................................................................................................7
Business strategy for future of the organisation..........................................................................7
CONCLUSION ...............................................................................................................................9
Recommendations .........................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is considered as an economic activity which is helpful in generation of several
opportunities for the owner. The main purpose of establishing business at the marketplace is to
earn profit and to satisfy customers (Corallo, 2020). It is essential for an owner to try to expand
the business and deal with different challenges in the market in order to increase revenue and
growth. In this report a brief analysis of PESTLE factors is performed after the impact caused by
Brexit. This report also contains negative and positive influence caused by various PESTLE
factors after Brexit. In this report the key challenges faced by a business organisation after Brexit
are explained. This report contains a brief overview of business strategy for the safe business
practices and also contains recommendations for the business to gain market growth. In this
report example of Tesco company is taken into consideration to better understand environmental
perspectives and dimensions. Tesco is a multinational retail company which was established in
the year 1919 and is headquartered Welwyn Garden city, United Kingdom.

TASK 1
Positive and negative impacts of PESTLE on a business
In the era of stiff competition it is important for a company to perform PESTLE analysis
for better understanding factors that impact a business organisation. In the macro environment of
United Kingdom after the Brexit there are many different there are several impacts on operations
of Tesco. The PESTLE analysis of Tesco is mentioned below along with various negative and
positive impacts:
 Political factors- The political factors are related to rules and regulations which are
formulated by government. After the Brexit the political rules and regulations are
changed in the country. Earlier United Kingdom used to follow the rules and regulations
which are formulated by the European Union (Feller, 2017). In recent times the whole
country follows rules and regulations which are formulated by UK government to handle
country activities. The business organisations faced various challenges as the culture
changed after the Brexit. Brexit may take several years and require the use of thousands
of people to exit from Great Britain successfully. When the vote was cast and the
decision made, politicians were put in an awkward placement.
Positive impacts- There are several positive impacts by United Kingdom's government like new
trade policies, Introduction of new business laws, development of business organisations and
development of economic activities.
Negative impacts- In political factors there are various negative impacts like adoption of new
culture business as there is resistance to change.
 Economic factors- The economic factors are considered as major factors which have a
main impact on GDP and national income of United Kingdom. Economic factors mainly
related to monetary policy which is formulated by the country. In last year retail sales
were up during the summer in United Kingdom. Meanwhile the credit card sales were on
the rise which mainly boosted the economy (Glebovskiy, 2019). Interests rate and
currency value were shaky, prompting international businesses to be impacted negatively.
Positive impacts- Main positive impact of economic factors on the business is reduction of
inflation in the country which is indirectly related to development of business organisation.

Negative impacts- A sudden decision of Brexit led to cause imbalance in various economic
factors.
 Social factors- The social factors are combination of society's inclination towards a
business organisation. Living standard of society also matters the most for a business
organisation which helps in development of a business. According to the data“the
referendum showed 51.9% (or over 17 million British people) voted towards leaving the
EU, while 48.1% (or over 16 million Brits) voted to stay. The nation is divided with fear,
worry, and on the other end of the spectrum, excitement in the crucial time (Rana, 2017).
Positive impacts- Major positive impact of social factor is people have accepted the decision of
Brexit and are ready to accept new changes.
Negative impacts- The main negative impact of social factors is many people are showing
resistance to change.
 Technological factors- The technological factors are considered as major factors which
are related to the use of information and technology (Hutchins, 2019). It is also essential
for the Tesco to take assistance of computer systems and software in order to perform
market related operations.
Positive impacts- Positive impact of technological factors is it helps in performing quick and
accurate operations.
Negative impacts- Privacy and security are considered as major issues which can lead to loose
customer's trust towards the business.
 Legal factors- The legal factors are related to formulation of laws and regulations related
to business by local authorities of United Kingdom for Tesco.
Positive impacts- The main positive impact is it is helpful in development of Tesco by
conducting legal operations.
Negative impacts- Legal factors creates a burden on a business which can be harmful for
business operations.
 Environmental factors- In the functioning of a business organisation it is essential to
take into consideration various environment policies which are formulated by
government of United Kingdom. Tesco follows environment related policy in regular
basis in order to keep safe the business and social environment.

Positive impacts- It helps in creating a sustainable business at the marketplace which is suitable
for the business to facilitate future generations (Janich, 2017).
Negative impacts- It creates a formality on Tesco to follow environmental laws and makes it
rigid.
TASK 2
Key challenges faced by a business entity using PESTLE analysis
In recent times many business organisations in United Kingdom are facing various
challenges which are causing a deep impact on various operations of Tesco. The main challenges
which are faced by Tesco are mentioned below:
 Customer engagement- The business organisation has to keep effective relationship
with different customers in order to survive at the marketplace. There are various
techniques of increasing customer satisfaction which can be adopted by Tesco. In the
functioning of a business operations at the marketplace it is compulsory for a business
organisation to develop customer engagement (Kaindl, 2017). After Brexit there is less
involvement of customer which is causing negative impact on business.
 Change management- After Brexit many organisations which are functioning at the
marketplace are facing challenges related to change management. It is compulsory for a
business organisation to develop change management in the organisation and also to deal
with change management by using appropriate strategy.
 Development of business practices- It is important for an organisation to develop latest
business practices in order to face new changes. The management of Tesco develops
effective and efficient strategy which is helpful in development of business goals. Most
of the business organisations in the market of United Kingdom are taking help of
consultancy services in order to develop business practices.
 Management of quality and human capital- The management of Tesco has to develop
precise business strategy that is effective in management of human capital. It is the major
aim of a business to maintain optimum quality in product and services to analyse business
performance in a smooth manner (Ndoro, 2019). Tesco should take assistance of
professional quality managers in order to develop good quality products and services.

 Suppliers and availability of goods- After the Brexit many companies are facing
inventory related issues that are blocking many operations of the businesses. Many
business organisations in United Kingdom were earlier dependent upon European nations
for raw materials. It is essential for a business organisation to adopt effective ways of
importing goods and service of different products and services.
TASK 3
Business strategy for future of the organisation
The business strategy is considered as a systematic approach which is helpful in
development of a precise decision making. In other words business strategy refers to a brief plan
which is formulated by management of a company (Ntarlas, 2020). It is essential for a company
to implement a strategy with the help of various departments to succeed in the marketplace. The
business strategy to improve department wise at Tesco is mentioned below:
 Human resource department- It is essential for the business to give effective focus on it
human resource management. The HR management of Tesco performs various functions
like recruitment, selection, payroll, culture and conflict management which is essential
for the business organisation.
 Marketing department- It is essential for a business to focus on marketing department
for increasing sales and revenue of the business. It is essential for a company to develop
precise marketing staff in order to perform operations related to selling products at the
marketplace. In an organisation it is major responsibility of the marketing department to
perform publicity and advertisement of products and services.
 Finance department- The finance department is considered as backbone of a business
entity which is helpful in maintaining financial worth of the company. In a business
finance department plays a major role in development of business by maintaining
systematic record of different transactions (Panagiotakopoulos, 2020). It is compulsory
for Tesco to develop and hire skilled and trained staff for performing different finance
related activities.
 Information and technology department- In a business there is a crucial role played by
IT department by using advanced computer and software system to develop business. In
the recent times the role of internet has increased in the world there are many business

organisations which are shifting from traditional businesses to digital businesses. It is
important for an organisation to take necessary steps which are helpful in development of
the business.

CONCLUSION
From the above stated report it can be concluded that business is considered as backbone
of the economy which is helpful in generating employment opportunities. It is compulsory for a
business organisation to follow rules and regulations formulated by government in order to
perform different operations and activities in an ethical manner. This project concludes that it is
essential for a company to perform macro environment analysis in order to gain competitive
advantage in short span of time. It is essential for a company in United Kingdom to develop
precise strategy for future with the help of strategic management to deal with consequences of
Brexit. This report also concludes that it is compulsory for a business organisation to follow
suitable recommendations to gain growth and efficiency at the marketplace.

Recommendations
In the changing economic scenario for the business organisations due to Brexit, Tesco has
gone through various hurdles and downward situations. It is recommended for Tesco to hire
professional experts to develop its business operations and functions. Most of the successful
business organisations in this stiff competition world follow a precise business strategy to deal
with consequences of Brexit. It is recommended for Tesco that it has to hire skilled and trained
staff for handling management related activities (Wolf, 2019). Tesco should take assistance of
information and technology for performing various operations in a smooth and systematic
manner. The company should develop a precise and smooth strategy with the help of
professional strategic management to lead the marketplace.
Company should focus on development of ethical business practices in order to improve
different operations in a systematic manner. It is the important for the company to deploy
democratic leaders in the organisation for taking effective decisions at the marketplace. In recent
times many companies are facing risk in the business functions so it is compulsory for a
business to choose best technique to minimise risk associated with the operations. It is the major
responsibility of strategic management to develop various goals and objectives and achieve them
in a short span of time. It is recommended for a business organisation like Tesco to precisely
follow all the rules and regulations which are formulated by the government. In the competitive
environment it is essential for the company to take assistance of top level management to
perform different operations.

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