Business Environment Analysis: A PESTLE Analysis of Tesco (2024)

This report provides a PESTLE analysis of Tesco, a global retail company, examining the external factors that influence its business operations. The analysis covers six key areas: Political factors, including political stability and changes in laws and legislation, which can be affected by events such as Brexit. Economic factors, such as GDP and inflation rates, are also considered, highlighting how economic growth and decline impact Tesco's operations, especially in the UK. Social factors, including changes in consumer preferences and lifestyles, are explored, emphasizing the shift towards health-conscious consumers. Technological advancements, such as robotics and AI, are discussed in terms of their impact on efficiency and product quality. Legal factors, including health, safety, and employment laws, are analyzed in relation to their impact on Tesco's operations. Finally, environmental factors, such as CSR policies and the reduction of plastic use, are examined. The report concludes that a thorough understanding of these external factors is crucial for Tesco to develop effective strategies and mitigate potential risks.

{"Group
name":"Essay”,
“subject
name":"Business"}
1

Table of Contents
Table of Contents.............................................................................................................................2
Introduction......................................................................................................................................3
Main body........................................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................4
2

Introduction
There several external factors which affect business operations as business is not having any
control on it. Hence, it is important to find out factors so that strategies are developed to
minimise impact. Similarly, as Tesco operate at global level there are various factors which can
influence on it. Thus, pestle analysis is done for it. It is a framework which is used to find out
external factors that influence on organization.
Main body
Political- It is a factor which is related to political stability of a country. It highly influence on
business operations as any change in political condition results in change of laws and legislation,
trade policy, Thus, due to it business operations are affected( Zahari, .and Romli, 2019). As
Tesco operate at global level they have to follow laws of each nation. In UK political condition
is not stable so it may affect on their growth. It is due to Brexit.
Economic- they are related to economic growth of a nation. Any change in economic growth
highly affect on business operations. In this factor included are GDP, income level, inflation rate
etc. in UK its growth rate has declined due to Brexit. Thus, Tesco will have to focus on other
countries to gain profit and sales as Brexit will affect on its growth.
Social- They are those factors that are related to change in taste and preference, needs, lifestyle
of people and needs changes then it directly influence on business operations. In recent time,
people have become more health conscious. They want healthy food products. Hence, it has
changed their needs. So, it will impact on Tesco growth. They will have to develop new products
to fulfil their needs.
Technological- This factor is related to advancement in technology. In every sector technology
is highly been used. It has affected on business operations in positive way. Moreover, in retail
industry various advance technological device are used such as robotics, AI, IOT etc. therefore,
Tesco needs to update technology so that goals are achieved in effective way. This will enhance
their efficiency and company will be able to maintain quality of products.
Legal- They are those factors which is related to laws and legislation which is to be followed by
business. The rules differ in various countries and are formed by government. They include
health and safety, employment law, etc. So any change in these highly impact on business
operations. Tesco operations will be affected in negative way if laws are modified in UK. The
3

government is trying to imply minimum wage act. Thus, company will have to form new policy
for it.
Environmental- This is most crucial factor for business as they have to protect ecosystem. Here,
the factors are related to change in environmental law, CSR policy, etc which directly influence
business operations. Now, in many countries government is emphasizing on protecting
environment ( Zahari. and Romli., 2019). They have made changed in laws and CSR and forcing
business to do so. Thus, it will affect on Tesco operations as they will have to minimise use of
plastic and make changed in CSR policy.
Conclusion
From the above it had been concluded that, pestle analysis is done used to find out
external factors Political change in change of laws and legislation, Economic conditions highly
affect on business operations in UK its growth rate Social to change in taste and preference
lifestyle of people will impact on Tesco growth to advancement in technology such as robotics
and Legal that is related to laws and legislation and lastly report focused on the environmental
changes such as CSR policy.
4

References
Books and journals
Zahari, A.R.and Romli, F.I., 2019. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics.192. p.104901.
5