Global Business Environment: A PESTLE Analysis of Tesco

This report provides a PESTLE analysis of Tesco's global business environment, examining the political, economic, social, technological, legal, and environmental factors influencing its operations. It highlights how political instability, economic inflation, changing social preferences, technological advancements, legal compliance, and environmental concerns impact Tesco's strategies. The report also discusses how Tesco has adapted to these factors through online sales, self-service checkpoints, and sustainable practices. It concludes that while various factors affect business operations, Tesco has overcome these challenges by developing effective marketing and business strategies, emphasizing the importance of adapting to the dynamic global business landscape. Desklib provides a platform for students to access similar solved assignments and past papers.

Global Business
Environment

Executive summary:
The aim of report was to find out various factors that affect the business operation of Tesco and
how the firm has overcome such factors in positive manner by developing effective business plan
and strategies.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE analysis:........................................................................................................................3
CONCLUSION:...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Tesco is the third largest retailer company headquarter in UK and deals in variety of goods such
as clothing, book, petrol, electronics, software, financial services etc. The present report is based
on detail analysis PESTLE that affects the operations of business in long run.
MAIN BODY
PESTLE analysis:
This is tool used by company to track environment in which they are operating or planning to
launch new product or services(What is pestle analysis?,2021). It gives overview of the
environment from various angles to keep a track and to examine certain business idea or plan. In
regard to Tesco PESTLE analysis have been briefly described as follows:
Political :
Tesco operates in number of countries such as Poland, china, Hungary etc. and therefore if
political environment is not stabler than company would face lot of problems in selling its
products to large number of people(Ngugi, O'Sullivan and Osman , 2020). Also, if import duty is
higher than firm would not be able to bring lot of inventory from outside UK. Further Brexit
reforms create negative impacts on firms as prices in the market for various products increased
and it also caused the problem of recession in the country.

Economic :
Factors such as costs, profits, prices, also affect the operation of Tesco. In the times of Covid- 19
many economies has slowed down as result of which many people lost the jobs. Hence, inflation
which is part of monetary policy is higher at any point than it may create negative impact on
operations of the company(Whittington and et.al., 2020). Further, with this change prices of
goods would be higher in Tesco which. Hence, people may switch to other brands where goods
are made available at lower prices. Other factors such as high labour cost and tax rate may also
create bad impact on the firm as high tax rate means increase in the prices of good and reduced
profit margins.
Social:
Due to various changes in culture ideas, value, attitude, beliefs pattern of consumptions of goods
also changes. In the recent times as more people are aware of health issues they consume more of
organic foods items(Hopkin, 2018). This factor has proved posited for the quoted firm as it has
started selling more of non-food items and organic foods items due to growing demands of
consumer.
Technological :
With the changes in technologies various firms have adopted different techniques to produce and
sell goods for example Tesco has introduced online selling of goods through websites so that
products can be made easily available at homes(Hamilton and Webster, 2018). Also, self-service
check points has been introduced to reduce the time and cost of labour which is also positive
aspect for the firm.
Legal:
Various laws such as employment law, minimum wages act etc. are the laws that are laid by the
government which needs to be strictly followed by all types of firm(Tommaso, 2017). Such strict
code of conduct may create negative impact such as minimum wages act may force the firm to
pay wages according to the government even when profits earned are very less in any month.
Environmental:
This is an important factor that company takes into consideration while operating its activities in
a complex business environment(Zinkin, 2019). The quoted firm has taken this factor in positive
manner and ensured that minimum wastage of products is done in its store. Also, it aims to
reduce the carbon footprint that will benefit the society in positive manner.

CONCLUSION:
From the above report it can be summarized that there are various factors that affects the
operations of the business but Tesco had overcome all these factors by developing effective
marketing strategies.

RFERENCES
Books and journals
Hamilton, L. and Webster, P., 2018.The international business environment. Oxford University
Press.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.
Ngugi, I.K., O'Sullivan, H. and Osman, H., 2020. Consumer Behaviour in Food and Healthy
Lifestyles: A Global Perspective. CABI.
Tommaso, P., 2017. Risk and performance management: Two sides of the same coin?. In The
Routledge Companion to Accounting and Risk (pp. 137-149). Routledge.
Whittington, R.and et.al., 2020. Exploring Strategy Text and Cases. Pearson UK.
Zinkin, J., 2019. Setting Strategy. In Better Governance Across the Board (pp. 141-168). De
Gruyter.
Online
What is pestle analysis?. 2021. [Online]. Available through:<https://pestleanalysis.com/what-is-
pestle-analysis/>.