PESTLE Analysis Report: Tesco's Global Business Environment (BM461)

This report presents a PESTLE analysis of Tesco, a multinational retailer. It examines the impact of political factors, such as tax tariffs and government regulations, on Tesco's global operations. Economic factors like inflation and exchange rates are also analyzed for their effects on pricing and profitability. The report further explores the influence of social trends, including consumer preferences and spending habits, on Tesco's product offerings and marketing strategies. Technological advancements, particularly in online purchasing and self-service technologies, and their impact on the company are discussed. Environmental factors, such as Tesco's commitment to reducing its carbon footprint, and legislative factors, including government guidelines, are also assessed for their influence on the company's performance and strategic decisions. The report concludes by summarizing the key findings and their implications for Tesco's future.

Running Head: PESTLE ANALYSIS
PESTLE ANALYSIS
Name of the Student
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Author Note

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Table of contents
Company overview..........................................................................................................................2
Definition of PESTLE Analysis......................................................................................................2
Pestle analysis of Tesco...................................................................................................................2
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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Company overview
Tesco, a multinational wholesale retailer, is located in the United Kingdom and has stores
in 12 countries worldwide. He is the another biggest retailer afterward Wal-Mart in standings of
turnover along withholds the label of the another-largest retailer in positions of sales (Tesco.com
2020). Tesco is famous for marketing foodstuff with non-food products and apart from these, the
company offers finance, cellular services, hardware facilities, and more. To well understand this
international multi-podium retailer, analyse it via PESTLE analysis for Tesco.
Definition of PESTLE Analysis
PESTLE Analysis is effective for the companies in terms of mapping the external
environment, influencing the business. This type of analysis is effective in the process of
entering into the foreign markets. Most commonly, Aithal (2016) states that the analysis is linked
with SWOT analysis for gaining an insight into the internal and external factors affecting the
businesses.
Pestle analysis of Tesco
Political Factors
As a global retailer, world political factors have a significant impact on Tesco's
performance. That includes tax tariffs, laws and of passage, the constancy of the nation where the
company operates. As of the continuing monetary instability in the world, many administrations
are heartening stores to create employment for residents. As Tesco contributes to job creation,
Tesco also rises the demand for its foodstuffs with differentiates its labor force.
Economic Factors

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Inflation, high prices of the raw materials and high exchange rates are a significant
problem for Tesco because they tend to increase the prices, demand, returns, with the values.
Thus, companies must be notified of policy changes, such as alterations in taxes or other issues
that can affect financial convenience. It is vital to note that although the company operates
internationally, it still relies heavily on the UK marketplace, where it has a market stake of
around 30% (Vernon 2015).
Social Factors
Due to numerous social deviations, styles show that UK patrons have chosen wholesale
and one-stop spending. As a result, Tesco increased the amount of non-food items sold. Their
beliefs mainly influence the types of goods with services sought by consumers along with
insolences, which in turn are influenced by social requirements.
Technology Factors
Technological advances have opened up new chances for Tesco. The two most striking
are the growth with the outline of online purchases with convenient homebased delivery. Second,
the self-service idea at the cashier offers customers comfort and accessibility, which in turn
lowers labour costs. Also, Tesco has invested a substantial amount in vitality effectiveness
projects to achieve its lasting goal of reducing its carbon footmark.
Environmental Factors
With increasing burden on businesses to overcome ecological problems along with take
action that is beneficial to humanity, Tesco is dedicated to reducing its carbon footprint by 50%
by 2020 (Tesco.com 2020). Tesco also decreases the waste generated in their stores, which
growths the societal awareness of customers.

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Legislative Factors
The Government guidelines with the laws also have a straight impact on Tesco's
performance. For example, in 2004 the Retail Food Commission (FRC) proposed the
introduction of a code of conduct, which bans many present practices, e.g. Amount changes in
the absence of notice or payment from the provider (Vause 2015).
Conclusion
Tax tariffs and political unrests adversely affects the import and export activities of
Tesco. Inflation, high prices of the raw materials and high exchange rates adds to the
complexities in the financial parameters. Adopting the wholesale distribution of the non-food
items have enhanced the triple bottom line approach for Tesco. Social media platforms, catering
to the home deliveries have expanded the supply chain network. The operations are controlled by
Retail Food Corporation (FRC), which helps in averting the illegal scandals. The decision of
reducing the carbon footprints have acted assistance in contributing to the protection of the
ecological biodiversity.

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References
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. International Journal in Management and Social
Science, 4(1).
Sullivan, R. and Gouldson, A., 2016. Comparing the climate change actions, targets and
performance of UK and US retailers. Corporate Social Responsibility and Environmental
Management, 23(3), pp.129-139.
Tesco.com 2020. About us. Available at: https://www.tesco.com/ [Accessed on 17th March 2020]
Vause, B., 2015. Guide to analysing companies. The Economist.
Vernon, R., 2015. International investment and international trade in the product cycle.
In International Business Strategy (pp. 35-46). Routledge.