Tesco PESTLE Analysis Report: Global Business Environment Analysis

This report presents a PESTLE (Political, Economic, Social, Technological, Environmental, and Legal) analysis of Tesco, a multinational grocery and general merchandise retailer. The analysis examines various factors influencing Tesco's operations across different countries, including political regulations, economic conditions, environmental concerns, consumer shopping trends, technological advancements, and legal frameworks. The report highlights specific examples, such as import duties, environmental initiatives, consumer loyalty, technological implementations like RFID, economic factors like labor costs, and legal challenges related to workplace discrimination and accounting fraud. The conclusion emphasizes the importance of PESTLE analysis in understanding both positive and negative factors affecting business operations. References to academic sources and online resources are provided to support the analysis.

Global business
environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
PESTLE analysis ........................................................................................................................1
CONCLUSION ...............................................................................................................................2
REFERENCES ...............................................................................................................................3

INTRODUCTION
PESTLE analysis is a tool that is used for providing a detailed external environmental
analysis of the company. The company considered in the following report is Tesco. This is a
British multinational groceries and general merchandise retailer that has headquarters in
England. This has approximately 12 countries in which it is operating.
PESTLE analysis
The PESTLE analysis of Tesco includes various factors on which operations of it
depends. These factors includes political, environmental, social, technological, economical and
legal (Hill, and Hernández-Requejo, 2008). These influences working of the company in
different countries. These factors are mentioned below - Political factors – Tesco is operating in around 12 countries that includes Europe and
Asia. It has to face different political regulations in different countries. These regulations
include political instability, economic condition, unemployment rates, impending
legislations, etc. For instance, import duty on goods may affect Tesco as it imports some
inventory from East Asia and China. Environmental factors – It is essential for companies to provide societal benefits by
improving environmental issues. Tesco encourages customers for shopping at tesco.com.
The van drivers of this company uses fuel saving routes and collects unwanted plastic
bags form customer. Social factors – The consumer shopping trends are unpredictable. They change a lot with
time. Consumers want same day delivery of products but this is not possible for Tesco.
Another issue is there is high demand for services and goods related to attitude and belief
of consumers. According to reports of PWC, 65% of UK shoppers are loyal shoppers. Technological factors - Tesco faced issues like customer experience and horse meat
scandal. With technological advancement, the company is able to attain it's reputation
back. Tesco introduced RFID technology for increasing in store experience for
customers. This counts stock automatically. This company has also developed online
mobile payment system called PayQwid. Economical factors – In UK supermarket business, labor cost is an essential economic
factor. In the year 2018, UK minimum wage was increased upto 4.4% for individuals of
1

more than 25 years. This costed a lot to Tesco in UK. Tesco depends upon UK market as
there are 27.7% shares in UK grocery market.
 Legal factors – Law can directly affect operations of the company. In Tesco, workers
took a legal action against managers as they were discriminated on the basis of gender at
workplace (Wild, Wild, and Han, 2003). This created frustration in the company. Legal
action was also faced by Tesco for accounting fraud and misleading with some of the
investors. It conducts all it's operations according to Food retailing Commission (FRC).
CONCLUSION
It is analysed that PESTEL analysis is essential for knowing what are the factors that can
affect business operations both in positive and negative manner.
2

REFERENCES
Books and Journals
Hill, C.W. and Hernández-Requejo, W., 2008. Global business today. New York: McGraw-Hill
Irwin.
Wild, J.J., Wild, K.L. and Han, J.C., 2003. International business (p. 342). Upper Saddle River,
NJ: Prentice Hall.
TECO Energy PESTEL Analysis & Environment Analysis, 2019. [Online]. Available through
<https://www.marketingtutor.net/tesco-pestle-analysis/>
3