Strategic Business Analysis: PESTLE Analysis of Tesco UK's Operations

This report presents a PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis of Tesco UK. The analysis examines how various external factors influence Tesco's operations and strategic decisions. Political factors include employment legislation and government emphasis on job opportunities. Economic factors highlight the impact of unemployment on demand. Social factors focus on consumer preferences for one-stop shopping and demographic changes. Technological factors emphasize Tesco's adoption of innovations like AI-powered cameras. Legal factors discuss government regulations and the Food Retailing Commission's code of practice. Environmental factors address Tesco's compliance with environmental laws and past incidents. Recommendations suggest focusing on non-food items, improving emergency measures, and adopting new expansion strategies to maintain a strong market position. The report references several academic sources to support its findings.

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Management

Pestle analysis of Tesco UK
Political factors: Tesco operate in globalised world in addition to UK. Due to this,
performance of Tesco is influenced by the legislative and political conditions. Considering
employment legislation, government put emphasis on retailers to provide varied job
opportunities from lower paid, flexible to higher pay. Due to this, Tesco also employs
different people such as disabled, student, and elderly workers (Lukić and Vojteski-Kljenak,
2017).
Economic factors: Economic factors put great concern on Tesco as they tend to influence the
cost, demand, profit, and price. The most significant economic factor is higher unemployment
level that tends to decrease the demand for goods.
Social factors: from the current trends, it is come to know that British customers mostly
prefer one stop or shopping in bulk. Demographic changes such as increasing female
workers, aging population, as well as decline in preparation of home meal means that retailers
of UK are also giving emphasis on added value service and products.
Technological factors: Due to the increasing technological changes, it is essential for
companies to bring technological innovation time to time. Due to this, British supermarket
has also developed technology that allows the customers to work store, load up their bags,
and go out without waiting for billing. It has started the artificial intelligence powered camera
or sensors that automatically detect what are the things picked by people. This has saved the
time of customers that were wasted in standing queue for billing (Awadari and Kanwal,
2019).
Legal factors: several government rules and regulation put direct impact on Tesco
performance. “Food Retailing Commission” also suggested code of practice in order to ban
most of the practices such as changing agreed prices or demanding payment on the side of
supplier. For implementing the right pricing policy, Tesco tends to offer the price reduction
on the purchasing of fuel. It is based on the amount that person has spent on grocery (Evans
and Mason, 2018).
Environmental factors: it is true that organisations are required to comply themselves with
environmental laws. Government made several rules in order to govern the working of
supermarket. In this regard, Tesco also fined for around £8 million related to safety and

environmental offences. It failed to address the issue related to fuel delivery system due to
inadequate system of alarm in place and poor emergency procedure at the time of incident.
This caused the resident to leave their home due to headache and sickness (Copp and Cronin,
2018).
Recommendations
From the pestle analysis discussed above, it is found that customers mostly prefer shopping in
bulk. However, it is recommended to Tesco for mostly keeping non-food items in its store. It
should also bring improvement in its emergency measures that are considered as the higher
risk factor for the people. Management should timely check the factors causing such issues
and take corrective measures immediately. This will help in minimising such critical issues
and work in the best in the best interest of the society. Due to the increasing competition,
Tesco should also adopt the new expansion strategies in order to sustain its strong market
position that is already present in the retailing market.

References
Awadari, A.C. and Kanwal, S., 2019. Employee participation in organizational change: A
case of Tesco PLC. International Journal of Financial, Accounting, and Management, 1(2),
pp.91-99.
Copp, S. and Cronin, A., 2018. New Models of Corporate Criminality: The Development and
Relative Effectiveness of" Failure to Prevent" Offences. Company Lawyer, 39(4), pp.104-
117.
Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco.
Kogan Page Publishers.
Lukić, R. and Vojteski-Kljenak, D., 2017. Analysis of intangible assets in retail
trade. Strategic Management, 22(2), pp.18-26.