Tesco PLC: Impact of Global Business Environment Factors Analysis

This report provides a comprehensive analysis of Tesco's global business environment. It begins with an introduction to the global business environment and its impact on companies. The main body of the report focuses on internal and external factors affecting Tesco, utilizing PESTEL and SWOT analy...Read More

global business environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Internal and external factors within business environment and key Drivers of change .............3
Ways in which key driver impact on HRM, Marketing, Finance, operation and R&D .............5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The global business environment can be defined as the environment within the different
resign or countries that directly affect to the companies operation and their business strategies.
Some of the internal and external forces impact on company so it is necessary for the business to
be aware of those forces.
This report will cover case study of Tesco plc which is British multinational company
who are operating their business in more than 6500 location globally. It is second largest
company in terms of collecting gross revenue every year, and they are selling products such as
grocery, financial services, assessors etc.
MAIN BODY
Internal and external factors within business environment and key Drivers of change
There are some internal and external factors within the business environment that has
huge impact on the strategies and operations of the Tesco company (Amankwah-Amoah., 2016).
It is necessary for the Tesco company leaders to be aware of those factors, so they can identify
the negative factors and convert them, into the opportunities for the Tesco.
PESTEL Analysis
Political Factor
Tesco is operating their business in different different countries which mean that they are
affect with various political environment Slovakia, Malaysia, China, Czech Republic, and others.
Tesco’s home market is the UK where political environment is stable though Brexit has created a
lot of uncertainty. A Brexit memorandum bring the negative impact on the company because
Europe counties increase their tax and tariffs which affect on their profitability. It is also an
drivers of change because this make Tesco to create new polices and regulation.
Economic
Economic factors such as Covid 19 which is not affect the companies but it also affect
on the salaries of the people and many people lose their jobs. Due to the lower wages and
salaries most of the Tesco customers shifted to the cheaper brand but Covid crises also decrease
the prices of the raw maternal which was an positive impact and company was able to provide
their prices on lower prices. This shows that the economic factors are change drivers for the
company because slow down in economy force company to decrease their [product prices.
Social

Decreasing the prices of raw material is creating postpositive impact on the Tesco
company because company can add some value for their customers, and they can provide
product and services in lower prices. Tesco company also sell some other brands product within
the United Kingdom for the Jewish Customers, The rising a demand in the specific type of the
food and chicken and meat and demand for the Vegetarian vegan foods and drinks are also rising
very high in the European markets that offer Tesco good opportunities for further growth.
Technology
Technology has both positive and negative impact and it is also an Key Driver of the
change for the Tesco. Companies within the retail industry are shifting toward the online market
and it is new autecology trend within this market (Brenkert., 2019). Tesco can also take
advantages of technology and show their presence in online market. On the other side technology
used at the workplace of Tesco company is old and other companies can take competitive
advantages if they adopt new technology. It is Necessary for the leaders of Tesco to Understand
the importance of technology.
Environmental
Environmental factors can also be Key drivers of the change for the Tesco because
support and encourage their customers toward the environment can help them top create good
reputation within the market. They should work toward the environment and also encourage
people to give their support as well.
Legal Analysis
Tesco is having all the legal licence to operate their business global, and they are paying
all the taxes and tariffs by the other countries.
SWOT Analysis
Strength
 This company has won many awards for their retail business, customer care services and
overall shopping experiences by the customers.
 Tesco has various store formats that appeal to the local culture of the country which
create positive impact on customers.
Weakness
 product sell by the Tesco are costly for the customers during the Covid Crises so
customers prefer to by from the cheap stores.

 Tesco was mostly depended on the European countries but after the Brexit, they has seen
decrease in their revenue.
Opportunities
 Online business can be good opportunity for the Tesco company and it can help them to
take competitive advantages (Hooper., 2016).
 There are opportunities for strategic alliances with other brands and admired companies
to offer more products or attract more consumers in certain target markets.
Threat
 Increase in the composition is creating threat for the Tesco company and this pressure is
leading the companies including Tesco toward the price war.
Ways in which key driver impact on HRM, Marketing, Finance, operation and R&D
Key drivers within the business environment has huge impact as mentioned above but not
only impact on the companies strategies but also impact ion the marketing, HRM, Finance and
R&D.
Marketing
Social factors and Change in demand of the customs impact on the marketing function of
Tesco because Marketer are responsible to identify needs and demand of the customers and
provide Information to production department.
HRM
Human resource management is responsible to create polices and political changes affect
the companies polices where Hrm have to bring changes in polices accordingly (Kasemsap.,
2016).
Operations
Implementation of new technology within the workplace of Tesco affect von the
operational department and help them to increase production and operation team can work more
effectively.
Finance
It is necessary for the finance manager of the company to ensure the proper use of
financial resource otherwise it can directly affect on the companies' profitability.
R&D

Shortage of the finance can affect the Research and Development department of the
Tesco company.
CONCLUSION
This report has been covered PESTEL Analysis to identify factors that are creating
positive and negative impact on Tesco. it also has been find out key drivers of change and in the
end of this report has been concluded SWOT analysis to identify the strength and weakness of
the Tesco company.

REFERENCES
Books and journals
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new
perspective on the effects of e-waste. Technological Forecasting and Social Change.105.
pp.20-26.
Brenkert, G. G., 2019. Mind the gap! The challenges and limits of (Global) business
ethics. Journal of Business Ethics.155(4). pp.917-930.
Hooper, M. J., 2016. The global business handbook: The eight dimensions of international
management. CRC Press.
Kasemsap, K., 2016. The roles of lean and green supply chain management strategies in the
global business environments. In Designing and implementing global supply chain
management (pp. 152-173). IGI Global.