University Report: PESTLE Analysis of Tesco's Global Environment

This report presents a PESTLE analysis of Tesco, a multinational retailer based in the UK. The analysis examines the impact of political, economic, social, technological, legal, and environmental factors on Tesco's business performance. Political factors include political stability and environmental laws. Economic factors encompass taxation, disposable income, and inflation rates. Social factors consider health consciousness, population changes, and age distribution. Technological factors involve emerging technologies and technological maturity. Legal factors address government policies, labor laws, and health and safety regulations. Environmental factors include pollution, climate, and environmental legislation. The report concludes that conducting an external analysis using the PESTLE framework is crucial for understanding the factors impacting business performance.

Pestle Analysis of
Tesco

Contents
INTRODUCTION:..........................................................................................................................1
MAIN BODY:.................................................................................................................................1
CONCLUSION................................................................................................................................3

INTRODUCTION:
PESTLE analysis is defined as a tool which is used to analyse as well as monitor macro-
environmental factors which impact on performance of an organisation (López López, 2017). In
the present report, TESCO is chosen as a base company. It is a multinational retailer which was
founed in year 1919 and its head office is located in England, UK. The report will cover pestle
analysis of respective organisation along key drivers of change.
MAIN BODY:
PESTLE analysis of TESCO:
Political factors: It is defined as interference of government on business activities and
include factors such as tax policy, trade policy and many more.
 Political stability or instability: It is analysed that the economy of UK is politically stable
that develop job opportunities for domestic people.
 Environmental laws: Because of pandemic situation that is Brexit, many uncertainties
were developed that impact negatively on the performance of company.
 Future legislations: It is determine that TESCO follow all the laws and legislations and is
able to respond to future legislations that assist in implementing activities in a systematic
manner.
Economic factors: It involve factors which impact on financial performance of region and
country. This factors are exchange rates, growth rate, inflation rate and so on.
 Taxation: The higher authorities of TESCO is more concern towards demand, leverage
cost, profits that impact positively on finance of company.
 Disposable income: Due to decrease in disposable income, respective organisation is
emphasis on advertising of brand instead of luxurious items.
 Inflation rate: It is determine that after Brexit, inflation rate is declined and decline the
buying power of customers which leads to decline in sales and profitability level of
TESCO.
Social factors: It consist of factors such as demographic characteristics, age distribution,
cultural norms and so on.
 Health consciousness: The people of UK are more concerned towards their health and for
this company is bringing organic product for customers (Hamilton and Webster, 2018).
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 Population change: The demand of consuming meat is high in UK and for this, TESCO
has some independent counters in some stores so that they can meet with the
requirements of customer.
 Age distribution: TESCO offers vegan food, vegetarian food, chicken/meat food as per
the age distribution factor.
Technological factors: It is important for companies to make use of innovative technology in
order to attract customers and retain in market for longer time period.
 Emerging technology: TESCO facilitates online shopping & home delivery as well.
 Potential copyright infringements: Tesco announced 'Clubcard' in 1995 and is one of the
reason of its success as such card can be activate in any of the TESCO stores in different
country.
 Technological Maturity: By offering self-service checkout points, the company is able to
give effective service to customer and decline its cost as well.
.Legal factors: It involves law such as employment laws, discrimination laws, consumer
protection laws, copyrights & patent laws, labour & safety laws and many more.
 Government policies and legislation: As per the law of UK that is competition law, it
prohibit anticompetitive activities due to which TESCO cannot merge with another
supermarket.
 Labour laws: The company pay minimum wages to its employees which is set by UK
government.
 Health and safety: Tesco cannot sell and of the alcoholic drink and unhealthy food to
underage customers.
6.Environmental factors:
 Pollution and green house gas emissions: The higher authorities of TESCO ensure that
they decline use of carbon footprints in order to save environment.
 climate and weather: In United Kingdom, Brexit leads to uncertainty for many people
who get money by selling fishes (Woodward and Veal, 2019).
 Environmental legislation: with reference to TESCO, government developed many
environment laws in order to safeguard or protect customers.
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CONCLUSION.
From the above study, it has been concluded that it is significant for a business entity to
conduct external analysis with the help of PESTLE framework as it help in gaining knowledge
about change factors impact on business performance.
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REFERENCES
Books & Journal
López López, N., 2017. Different ways to assure the continuity of the business.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Woodward, R. and Veal, T., 2019. KEEPING IT ALL TOGETHER. Teaching Business &
Economics, 23(2), pp.27-29.
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