Tesco PLC: Business Environment Analysis for Brazil Expansion Plan

This report assesses Tesco PLC's potential expansion into the Brazilian market, focusing on the business environment. It examines both micro and macro factors impacting the business, including political, economic, social, technological, legal, and environmental (PESTLE) aspects, as well as Porter's Five Forces (threat of new entrants, threat of substitutes, competitive rivalry, supplier power, and buyer power). The analysis considers Brazil's economic stability, market opportunities, and challenges such as complex tax policies and security concerns. Tesco's strategy to promote plant-based vegan food is evaluated in light of these factors, aiming to provide insights for successful market entry and competitive advantage. Desklib offers a variety of study tools and solved assignments for students seeking further assistance with similar topics.

Business Environment
Assessment 1

Table of Contents
INTRODUCTION ...............................................................................................................................3
MAIN BODY ......................................................................................................................................3
RECOMMENDATIONS .....................................................................................................................7
CONCLUSION....................................................................................................................................8
REFERENCES.....................................................................................................................................9

INTRODUCTION
The term global expansion is referred to the increase of the Business and its operations into the
specific area or region so as to gain the competitive advantages and profit maximisation as well . In
today’s global economy, organization of all sizes are open up to various operations in foreign
markets. This type of increase can provide various advantages, including greater possibility for
market growth and diversification(Backsmann and Backsmann 2019). The international expansion
of business has many advantages as well. In this Report Tesco PLC which is the third largest retailer
in the United kingdom, having larger operations outside the country as well. Along with that, The
Expansion of company into the Brazil market will also be discussed. The company will be
promoting its Plant based vegan food so as to capture the Brazil market. The Tesco PLC is a well
known reputed brand which has a variety of product offerings in different field such as, household,
grocery and retailing items. The Company has its headquarters located in Welwyn garden city,
London. Tesco is also in a great position of revenue from past years and has increased its share of
business nationwide. The Growth and development is considered as an important term in the
business or an organisation as every business and the organisation starves for the growth and
success for their firm. The Tesco company wants to expand it business in the Brazil, so as to gain
the competitive advantage and maximising their profits too. The company can also opt various
strategies and tactics so as to make the various activities and functions effective and efficient.
Further more, knowing about the business environment can also be helpful, so as to gain the various
benefits and advantages so that the company can promote its global business successfully by
achieving its targeted objectives.
MAIN BODY
The Term Business environment refers to the sum or collection of all internal and external factors
such as employees, customers needs and expectations, supply and demand, management other
activities etc. The Business environment has various functions which effects the business and the
organisation in many ways (Božić-Kudrić 2020). The environment consists of Two factors namely
Micro and Macro. The Micro factors are related with the internal factors which can effect the
organisation directly , such as, customers, employers and stakeholders. The Macro environment
consists the factors which are termed as the external and by which the organisation can be effected
indirectly, such as political influence, pricing policies and environmental factors too. There are

various strategies and analysis which can help the business to cope up with difficult and complex
problems. The Business environment consists of many steps which can be opted by the company so
as to move along with the dynamic business environment. The Collection of necessary information,
Scanning and searching of information, Forecasting the various conditions and the observing of
environment also. The Environmental analysis is termed as a strategic management of the various
factors and tools which can be beneficial for the company to promote its functions smoothly so as to
maintain a well known reputed position in the long run by achieving the targeted objectives.
Tesco PLC wants to establish its plant based vegan Food in the market of Brazil (Colombo and
Bacchetta 2021). The Brazil is the largest country in South America and the fifth largest nation in
the world The Brazilian landscape is very varied. It is most well known for its dense forests,
including the Amazon, the world's largest jungle, in the north. But there are also dry grasslands and
pine forests. The Brazil has a wide culture including various ethic groups such as, Amerindians,
European settlers and Africans. The Brazilians are crazy about the Soccer and it has the best player.
The country has also won the world cup of Soccer finals, five times, more than any other country.
The Country has large and developed roads and other developed system of Railway, which can be
beneficial for the companies involving in the business of transportation and export and import of
various goods and services. The Brazil i9s also considered as the great trading hub because of its
trading facilities and other beneficial factors. Brazil has also experienced a huge amount of
economic growth and its functional ability in terms of various operations and other activities has
also increased. Brazil is also considered as the Ninth largest country in terms of economy in the
world. It has became a very popular hub for the various business and the organisations to enter into
its market, as it has a greater business development. Also it has a great infrastructure for doing
business. Along with that, it has also a diverse d culture, through which the business and the
organizations can have a lot of opportunities to select various segments of markets and can move
along with their dynamics so as to increase their global reach as well(da Silva Medina and Pokorny
2022).
There are various models and approaches which can help the company to analyse the various
factors and challenges that can effect its Brazil business opportunity and idea. Following are the
models,
PESTLE Analysis.
 Political factors
The government is retroactive and stabilized and there is no political disorder in the country at the

moment. Corruption is referred as the big issue in the country. The country has made it quite
obvious, to maintain the adequate payments to the government representatives and other officials,
whether they are opening a scale industry (Overholt 2019). The Tesco PLC should make itself quite
effective and efficient in terms of economic conditions and other relevant factors so that they can
cope up with the political factors of Brazil country.
 Economic Factors
The country has increased its growth, along with the period of time , and the Central bank of Brazil
has also reduced the risk of Currency devaluation, which has made it easy to control the inflation
situation. The Tesco PLC has a great advantage to enter into the Business of Brazil Market by
gaining the various benefits as well as the competitive advantages, so that it can promote the plant
based vegan food business effectively.
 Social Factors
The Country has an economic inequality among the people of various class. There are more wealthy
citizens in the country as compared to the poor ones. The Middle class sector of the company is
also growing along with the period of time. The Brazilians area up to date in the fashion world and
they have a great sense of fashion as well. The Tesco PLC should adapt some changes according to
the tastes and preferences of the customers, so as to stay Dynamic in the environment of Brazil.
 Technological factors
As compared to other countries, Brazil has comparatively weaker technological infrastructure, as
well as the investment. There are lot of efforts which are being made so as to promote the technical
efficiency in the country. Tesco PLC should bring new ways to the technology of Brazil market
such as online hopping of its products can be a great way so as to deliver the customer satisfaction
through its product of Plant based Vegan food.
 Legal factors
The country is a federal republic and its legal system is based on the civil law and regulations. The
country also relies primarily on the statute, rather than the case law. The Tesco PLC should follow
the rules and regulations of Brazil and it should also provide the adequate amount of salary to the
new employers and The workers hiring by the company for its new Plant based Vegan food.
 Environmental Factor
Brazil is facing many environmental issues such as, Deforestation, illegal wildlife trade, the
degradation of land and water pollution. Tesco PLC can get an advantage by promoting its Plant
based Vegan food in Brazil, as the environmental factors are effecting the various sources of plant,

trees etc. The company can get an advantage by promoting its product in Brazil (Pešić 2018).
Porter's Five Forces
 Threat of new entrants
As the profit is the main objectives, The competition in the Brazil retail industry is quite high. There
are a a lot of elements in the industries which can be effected by the prices or the customer loyalty.
The Tesco PLC should focus on the new entrants which are selling the same products as the
company.
 Threat of substitution products
This component is related with the threat of products, The Tesco PLC should promote its product in
a different way and in a different market, so that it can not be effected by the substitute products of
the market and other competitors. The company should fix the effective pricing policies so as to
gain the competitive advantage.
 Direct competitors
This factor is related with the direct competitive markets and various other factors which can effect
the Plant based Vegan food product of the Tesco company which it wants to launch in the Brazil
market. The Brazil country has various environmental issues by which it can not produce such
vegan foods and other plant based products and items. So, The Tesco PLC has an advantage to
increase its sales and also the profit share, so that it can make a well reputed position in the Market
of Brazil.
 Supplier's power
In this factor, the industry has few suppliers or no substitutes or the product. The Suppliers can
pressurise the companies to increase their prices and can also put the high level on the margins. the
Tesco plc can get an advantage as the profit can be increased by the company, by fixing the high
prices for the export of the product in the country.
 Bargaining power of customers.
This factor of Porter's five forces is related with the various factors that depends on the customers
and their power as well. The Customers can lay stress over the company and the suppliers, so that
they can reduce the price margins and other things which can effect the customer's purchases. The
Tesco PLC should analyse the buying behaviour of the customers and about their tastes and
preferences, so that they can get aware about the customer's areas of interests and various segments
of market also, which are influenced by the customers up to a great extent(Tanwar and Bhardwaj
2022).

Before doing business internationally or expanding the business on a global term, The Tesco
company should get a proper information about the country's economy and its various difficulties ij
the market sector which can effect the business of its Plant based vegan Food. Brazil comes under
the ninth largest country on the basis of economy, having various opportunities and threats which
can effect the new entrants to enter into the business and market sector of the country (Velez-
Ocampo and Gonzalez-Perez 2019). Brazil has a stable and excellent economy which makes it quite
effective for the new business and the markets to enter into the sector so as to increase the sales and
profits of the company. Along with that, The Taxes and Bureaucracy policies of the Country are
quite complex and difficult. There is a huge difference between the ways of the public sector and
their treatment. The Brazilian market is also less secure, as they do not have good and effective
social security and huge deficit too. This can also act as the challenges which can be faced by the
Tesco PLC in the Brazilian market. The opportunity of Brazil country to the business sector is also
great as it is a huge country with various cultures and regions, which makes the business easy to
enter into the various segments of their choice and capability and they can also gain the advantages
from that.
Barriers to the entry of New Markets.
There are some barriers to enter in the Brazilian market, as it has various difficulties which are
encountered by the foreign investors (Walter and Paladini 2019). The Country has high taxes, red
tape and the lack of infrastructure and development of business sector, which makes it quite difficult
to enter into the market of Brazil industrial sector for expanding the international or global
business. Doing Business in Brazil requires an extreme knowledge of the local environment as well
as the direct and indirect taxes which can effect the business and the organisation. The Tesco PLC
should have an effective and efficient strategies so that it can enter into the Market of Brazil so as
to promote its Plant based Vegan food( Zona Bannò and Coller 2022)..
RECOMMENDATIONS
There are a various Recommendations which can be provided to the Tesco PLC so as to enter into
the Brazil market as the Company wants to promote its Plant based Vegan food. Following are the
Recommendations which can be opted by the Tesco PLC, so as to enter into the Brazilian Market.
 the Tesco plc can choose the ideal location to launch its product of plant based vegan food in
the market.

 The company can also look for a development promotion agency, so that it can be easy for
the business and the organisation to promote its product.
 The Tesco PLC should understand and integrate the various cultural aspects and strategies so
that it can enter into the market effectively and efficiently.
 The Company should also opt various changes according to the tastes and preferences of its
customers, so as to stay dynamic according to the customers.
CONCLUSION
The above report went into detail with various complex issues such as, the international business
expansion and entering into the various market segments on an international level. Further more,
The various analysis and strategies of business environment so the business and the organisation
can maintain their well reputed position in the market. Along with that, The Tesco company has
been opted and various strategies and tactics were detailed above, so as to make the business
effective and efficient enough to enter into the global market of Brazil. The company is analysing
various external factors with the help of Pestle analysis and Porters five forces, through which it can
get more easy and understandable by the company to know about the various opportunities and
challenges. At the end, The barriers in the entry of Brazil industrial sector were highlighted
including the various recommendations also which can help The company to enter effectively and
gain the advantage also.

REFERENCES
Backsmann, T.A. and Backsmann, C., 2019. Evolution of corruption in Brazil. In Corporate Social
Responsibility in Brazil (pp. 277-285). Springer, Cham.
Božić-Kudrić, N., 2020. Strategic analysis of digital marketing agencies (Doctoral dissertation,
University of Zagreb. Faculty of Economics and Business. Department of Organization and
Management).
Colombo, A. and Bacchetta, M., 2021. Strategic analysis for Digital360: international expansion to
Latam, Spain, France.
da Silva Medina, G. and Pokorny, B., 2022. Agro-industrial development: Lessons from Brazil.
Land Use Policy, 120, p.106266.
Overholt, W.H., 2019. The Future of Brazil: An Overview. The Future of Brazil, pp.1-48.
Pešić, M., 2018. Utjecaj novih digitalnih trendova poslovanja na razvojne strategije hotelskog
poduzeća Ilirija dd (Doctoral dissertation, VERN University of Applied Sciences).
Tanwar, S. and Bhardwaj, S., 2022. Recent Trends and Inflows of Foreign Direct Investment in
India: With a Specific Reference to the Insurance Sector. In Big Data Analytics in the
Insurance Market (pp. 185-206). Emerald Publishing Limited.
Velez-Ocampo, J. and Gonzalez-Perez, M.A., 2019. Analyzing foreign expansion and corporate
reputation: review and future research agenda. Cross Cultural & Strategic Management.
Walter, O.M.F.C. and Paladini, E.P., 2019. Lean Six Sigma in Brazil: a literature review.
International Journal of Lean Six Sigma.
Zona, F., Bannò, M. and Coller, G., 2022. International Expansion and Firm Growth in Domestic
Markets: Family Versus Non-Family Firms. Family Business Review,
p.08944865221084423.