Tesco's Response to a Changing External Environment: BUSN07023

This essay examines Tesco PLC, a leading UK retailer, and its adaptation to changes in the external environment over the past three years. It covers the nature of Tesco's business, its size, ownership, turnover, profit, and growth. The essay employs a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting Tesco. It details the opportunities and threats Tesco faces, including the growth of online grocery sales, high unemployment rates, economic recession, the COVID-19 pandemic, and increasing competition. The essay further discusses how Tesco has responded to these challenges, such as shifting to online facilities and participating in social supermarket initiatives. The conclusion summarizes Tesco's strategies for navigating the dynamic market landscape and maintaining its competitive edge.

Essay

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Nature of the business, size, ownership and where available, its turnover, profit and growth.. .3
External environment .................................................................................................................4
Clear linkage between the changes in the external environment over the last three years and
the opportunities and threats faced by the company. .................................................................6
Relate information about opportunities and threats to company activities. How has it
responded to opportunities and threats?......................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The environment of management functions with several components of the business that will
have get effects on the managerial functions and operations. The organisation consider in this
report is Tesco Plc. It is a leading retail supermarket in the United Kingdom (Ali, and Anwar,
2021). The report primarily discuss about aspect of the business, size, possession, revenue, profit
and growth, external situation, an the connection in the variations in the external environment
and the opportunities and threats that are faced by the company. At it involves an opportunities
and issues of the business and their actions that discussed.
TASK
Nature of the business, size, ownership and where available, its turnover, profit and growth.
Tesco plc is a British multinational grocery store and broad marketing distributor
headquartered in the United Kingdom. It is considered as the third largest retail merchant as
globally that are analysed by gross turnover and the ninth largest brand in overall field that are
discussed by its turnover. The turnover and profit divisions of the business are as follows -
Format Number Total
area (m2)
Total
area (sq ft)
Mean
area
(m2)
Mean
area (sq
ft)
Percentage
of space
+/- Shops
2016
Tesco Extra 252 1,648,842 17,748,000 6,543 70,429 44.53%
Tesco
Superstore 479 1,307,610 14,075,000 2,730 29,384 35.32% 1
Tesco Express 1,740 376,629 4,054,000 216 2,330 10.17% 8
Tesco Metro 176 185,156 1,993,000 1,052 11,324 5.00% 1
One Stop 780 117,894 1,269,000 151 1,627 3.18% 1
Tesco Dot-com
only 6 66,519 716,000 11,086 119,333 1.80%
Dobbies 0 0 0 0 0 0.00% 36
Total 3,433 3,702,649 39,855,000 1,079 11,609 100.00% 27

External environment
PESTLE analysis is a general concept in the marketing structure. It is applied by the
business of organisation as a tool that are to be check that how external factor will have an
impact on the working of the business. Hence, the PESTLE analysis of the management of Tesco
are as follows -
Political factor
It is connected to political section of the business's decision that are maintained by the
government that might have an impact on the performance of the management in terms of the
Tax, tariffs, environmental regulations, government engagement, political stableness.
Positive Impact Negative Impact
Tesco holds maximum profits, and there is
higher term of the political stability in the UK,
this creates a favourable business climate for
TESCO. The rules and norms in the United
Kingdom are simple for the management to
operate.
After it end of UK-EU free trade agreement,
Tesco now have to pay more for the tariff as
per to the norms of the WTO.
Economic factor
Any variations in the economic development, economical stableness, pricing ratio in the
economy that might also have an impact on the business (Liu, Wu, and Chan, 2021).
Positive Impact Negative Impact
Internationalisation has supported to the
management of Tesco in performing their
work as effectively in which one nation faces
economical stagnation.
As in the management of the Tesco that are
developing internationally, it is still quite
dependent on UK with 30% market share,
inflation in the UK, by any chance, would
affect its working and hold back major portion
of profits
Social Factors

It involves rules and regulations, health safety and population development ratio. Any
variations in society requires that the business have an impact on their working performance,
Positive Impact Negative Impact
By having higher term of variety of social
variations and tendencies, the demand for non
food products and packed food has increased
which has been tapped by tesco and now
offers many variety of products.
COVID -19 had developed fear in the mindset
of the public and at the current period of time
they demand that how safely the products is
and meeting their satisfaction of products will
get decreased as effectively.
Technological Factors
It involves technological advances, creation and growth in the area that might support the
management to develop (Long, DUANG-EK-ANONG, and VONGURAI, 2021). Management
might always look for chances to get effective utilisation of the techniques and creation.
Positive Impact Negative Impact
Online shopping with facility of home
delivery and self checkout points has created
ease for customers and this technological
advances has helped Tesco boost up their
profits. Highly advanced variations in
technology will develop ease for the
management.
Technology keeps variations if Tesco does not
raising its utilisation of techniques then the
consumers may go to the challenges
management who are providing better services
with advancement.
Legal Factors
Variations in legislation governing management, imports and as well asw exports and
legal factors have an impact on the smooth functional of the business (Roy, Ali, and Gupta,
2021).
Positive Impact Negative Impact
Laws surrounding Tesco have developed the
performing for the business as effectively.
Tesco being an MNC has to manage all the
norms and laws of the nations and also
maintain the same with its domestic nation,

UK. This can develop a hindrance for an
effective functioning of the business.
Environmental Factors
This factor is concerned with the situation and its activity waste disposal laws, CSR
Positive Impact Negative Impact
Working in a way which will least affect the
environment will be beneficial for Tesco as it
will comply with CSR regulations (Sinnewe,
Yao, and Zaman, 2021).
Not complying with the CSR regulations can
make the business for Tesco hard or even
make them shut.
Clear linkage between the changes in the external environment over the last three years and the
opportunities and threats faced by the company.
Factor Threats Opportunities
Political UK-EU relations create a
major threat to the company as
it will require to trade
according to WTO rules which
means High Tariff rates due to
political term of the factors
It is a formulation of political
change that is highly attracted
by political terms. It manages
the manner of the success or
failure of social divisions that
will have an impact on
primarily by political
opportunities.
Economical CEO forecasts though time in
the holiday season due to
recession in the market after
market shutdowns due to
COVID-19 it will get affected
economical factor (Siregar,
AI and machine learning can
be used for better supply
management, providing
products faster and with low
economical costs.

and Sihombing, 2021).
Technological Technological threat is termed
as one of the major sort of
situation or crisis setting that
are caused by the human
utilization of science and
technology.
There are many opportunities
for the company to rise its
online retail markets due to
COVID - 19 safety protocols
that will motivate
technological factor for it.
Social Labour threats in terms of
increasing wages which put
further financial pressure on
the company.
Expanding internationally with
employing local public in that
country would be beneficial to
gain trust of potential
customers it will direct
indicate to the social factor.
Relate information about opportunities and threats to company activities. How has it responded
to opportunities and threats?
Opportunities for Tesco Growth of Online Grocery Sales – It evaluates the course of section to limit the spread of
the pandemic situation of the COVID - 19 that also maintain to preclude persons from
going out as much as they used to. The limitation that are best in marketing as per to the
purchasing groceries as online. High Unemployment Rates – It maintains the way to demonstrate an efficient declining
in employment for person age among 18 to 35 years (Topcu, 2021). Supermarket being
termed to be one of the few spots in which person might still found the job roles, the
higher term of unemployment rates will manage the Tesco in maintaining person in their
growth.
 Social Supermarket - Social supermarkets holds unsold inventory by using procedure in
similar term of date. The supermarket exchange the inventory at very low-cost rate,
preventing wastage and food poverty. The organisation of Tesco is passionate about both
reasons and may actively participate in this initiatives.

Threats for Tesco Economic Recession - Ken Murphy, the new CEO of Tesco had faced tough time at the
time of holiday season. The economical recession and the visitors drop in purchasing the
fundamental power for following the facts. On the other hand, higher term of the
unemployment ratio will maintain other divisions of financial unit for the business of
Tesco. COVID – 19 pandemic – Management of business rapid shift to online facilities that are
saved in Tesco at the time when other management fell down towards low divisions.
Hence, COVID – 19 pandemic virus relates to the expenses hit £533 million (Khattak,
Muhammad, and Robinson, 2021). On the other hand, Ocado manage the Tesco as the
most reputable retailer of the United Kingdom. It might manage the industry level that
are keen to shift.
 Competition – At the present time, the ownership of the management of ASDA changed
hand from Walmart, to the billionaires Issa brothers. The present owner seeks to bring
ASDA to their 5000 forecourts as across to the 12 nations. As the revival of ASDA tends
to be an effective threat for the market share of the Tesco.
CONCLUSION
From the above mentioned report it has been concluded that, the field of the supermarket chain
involves varied sort of the manufactures that maintains the own divisions. In the period of the
COVID – 19 pandemic situation, is once in a century crisis that holds a long lasting shift in the
manner of individual who perform in the company.

REFERENCES
Books and Journals
Ali, B.J. and Anwar, G., 2021. Organization citizenship behaviour as a determining Factor in
Business outcome. Ali, BJ, & Anwar, G.(2021). Organization citizenship behaviour as a
determining Factor in Business outcome. International journal of Rural Development,
Environment and Health Research, 5(2), pp.17-25.
Cartwright, S., Davies, I. and Archer-Brown, C., 2021. Managing relationships on social media
in business-to-business organisations. Journal of Business Research, 125, pp.120-134.
Liu, B., Wu, J. and Chan, K.C., 2021. Does air pollution change a firm's business strategy for
employing capital and labor?. Business Strategy and the Environment.
Long, S., DUANG-EK-ANONG, S. and VONGURAI, R., 2021. Determinants of Business
Education on Student Satisfaction in Higher Education: A Case Study in Cambodia. The
Journal of Asian Finance, Economics and Business, 8(3), pp.1405-1416.
Roy, R., Ali, E.F. and Gupta, R., 2021. Sustainability: A Contested Model in Business
Practice. International Journal of Research in Engineering, Science and
Management, 4(2), pp.62-66.
Sinnewe, E., Yao, T. and Zaman, M., 2021. Informing or obfuscating stakeholders: Integrated
reporting and the information environment. Business Strategy and the Environment.
Siregar, M.Y. and Sihombing, P., 2021. The Performance Improvement and the Competitiveness
of Private Universities (PTS) in North Sumatera through the Strategy of Building
Institutional Competence. Budapest International Research and Critics Institute (BIRCI-
Journal): Humanities and Social Sciences, 4(1), pp.639-653.
Khattak, M.N., Muhammad, N. and Robinson, D., 2021. Understanding the interplay between
support agencies and small and medium-sized enterprises in a conflict environment
from an institutional theory perspective. Asia-Pacific Journal of Business
Administration.
Topcu, M.K., 2021. Competency Framework for the Fourth Industrial Revolution. In Research
Anthology on Cross-Industry Challenges of Industry 4.0 (pp. 359-379). IGI Global.