Comprehensive PESTLE Analysis of Tesco and its Business Environment

This report provides a PESTLE analysis of Tesco, a multinational retailing firm, evaluating the impact of political, economic, socio-cultural, technological, environmental, and legal factors on its business operations and decision-making processes. The analysis explores how political factors, such as Brexit and import duties, influence expansion strategies. It examines the effects of economic conditions, like the 2008 recession and exchange rates, on customer spending and outsourcing. Socio-cultural shifts, including changing shopping habits and online trends, are also considered. Furthermore, the report assesses the impact of technological advancements like self-checkout systems, environmental policies, and legal regulations, such as minimum wage laws, on Tesco's performance and strategic planning. The conclusion summarizes the key findings, emphasizing the importance of understanding the external business environment for effective decision-making.

Pestle analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
PESTLE Analysis of Tesco.............................................................................................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

Executive Summary
Present study has been based on the business environment in which it has been presented
PESTLE model. It explained how such factors can impact the company and influence their
decision making process.

INTRODUCTION
Pestle analysis is the tool to measure the potential threats and opportunities involved in
the business environment. By the help of identifying the key drivers of change it will be helpful
for the company management to take a better decision making process.
PESTLE Analysis of Tesco
Political Factors (P)
Tesco is the multinational retailing firm which operates worldwide. So it has been clear
that political factors greatly influence the decision making process of the company. Political
environment might change through policies governed by the authorities such as Brexit Impact on
the Political status in UK (Barrett, 2017). In which such factors can be included such as
employment legislations, higher paid, political stability, unemployment rate, impending
legislation of the countries where it is operating. Like, Import duty might be impact the goods
from outside UK like china and East Asia. Such political factors can impact the company
expansion decision making process.
Economic Factors (E)
Tesco are paying high attention to the economic factor as they are directly impacting the
buying behaviour of customers. Like in 2008 Economic condition if the UK was very badly. Due
to this environment customers rapidly decreasing their spending power. In contrary, positive
aspect of the recession is customer switch from the premium brands to local brands so in such
case the profitability of the local grocery retailers has been increased. Another example that due
to falling exchange rate it also might impact the Tesco outsourcing rates.
Socio- Cultural Factors (S)
Social changes are dynamic in nature which keeps on changing rapidly. Also, these
changes impact the customer trends in the UK market (Hammad, 2015). Therefore, people also
having less time to go for a shopping so instead of that they prefer to have fast home delivery
system. All such trends influence the customer mind and buying behaviour. Also, people shift
towards online shopping due to which Tesco also need to change their strategies and decision
making process.
Technological Factors (F)
The advancement in the technology creates more stress on the retailers. On the same side,
it also creates opportunities to earn company value. Like Tesco Self-checkout which is a device
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which enable customer to process their own purchases from a retailer. So the customer itself play
a role of cashier. Such new options makes customer more curious to get shopping.
Environmental (E)
Environment factors influence companies in the form of changing government policies or
due to addressing the environment issues. Tesco can influence by environmental policies such as
adhering CSR obligations, pressure from NGO and weather and climatic issues. All such factors
might affect the company decision making process.
Legal Factors (L)
Legal factors is one of the most significant driving factor which directly impact the
company performance (López López, 2017). Such as According to National Minimum law A
minimum hourly rate of pay set by the government has to be applies on the company policies as
well. Otherwise, it might affect the company reputation in the market.
CONCLUSION
Present study concluded the business environment factors and explained the arguments
which might affect the company decision making process.
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REFERENCES
Books & Journals
Barrett, J., 2017. CRITICALLY EVALUATE THE LONDON 2012 OLYMPICS’IMPACT ON
THE ECONOMY IN RELATION TO TOURISM AND THE LOCAL
COMMUNITY (Doctoral dissertation, Cardiff Metropolitan University).
Hammad, A., 2015. Strategic Change and Its Management to Expand Business Through
Implementation of Models: A Case Study of Boots UK. Available at SSRN 2676800.
López López, N., 2017. Different ways to assure the continuity of the business.
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