Comprehensive Analysis of Tesco's Internal and External Environment

This report provides a comprehensive analysis of Tesco's business environment, examining both internal and external factors that influence its performance. The analysis includes a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, which identifies key internal capabilities and external market conditions. The report also utilizes a PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis to assess the impact of macro-environmental factors on Tesco's operations. The SWOT analysis highlights Tesco's strengths, such as enhanced innovation and strong market share, while also identifying weaknesses like product shortages. Opportunities include the growth of online grocery sales and the rise of social supermarkets, and threats encompass intense competition and economic recession. The PESTLE analysis examines the impact of political stability and technological advancements. The report concludes by emphasizing the importance of considering both internal and external factors for effective business strategy and performance.

Internal and External
Environment on Business

Table of contents
 Introduction
 SWOT Analysis
 Pestle Analysis
 Conclusion
 References

Introduction
Business environment comprises of two kinds of environment that include
external and internal environment and both of these environments consist of various
factors that impact business performance (Ansari, Farrukh and Raza, 2021).

SWOT Analysis
SWOT Analysis is a tool that
helps organisation in identifying its
internal strengths and weaknesses along
with external opportunities and threats
that exist within business environment.

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The SWOT Analysis of Tesco is given as follows:
Strengths Weaknesses
 Enhanced innovation
 Strong Market Share
 Strong performance during pandemic
 Quality control
 Shortage of products
 Food safety issues
Opportunities Threats
 High unemployment rates
 Social Supermarket
 Growth of online grocery sale
 Economic Recession
 Intense Competition
 Controversy

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Strengths Weaknesses
 Enhanced innovation: Tesco is using many innovations
in their business which is very high-effective in their
company (Contractor and et.al., 2020). New innovation
should be according to the preference of customers which
results in high increment of sale and ultimately, there will
be maximisation of profit in the company.
 Strong performance during pandemic: In this pandemic
duration,TESCO registered a strong performance and its
growth during this pandemic boosts the online sale and
the company is achieving its objectives effectively.
 Quality control: Tesco makes use of meticulous quality
control measures, but an annoying issue from a customer
indicating aspect for improvement. It has low category
participation in health and beauty.
 Shortage of products: Tesco is conserving a few of its
items to prevent shortages of products due to panic buying
when customers buy unusually large amounts of a
product.

Opportunities Threats
 High unemployment rates: There was a massive fall in
employment numbers of people aged 16-24 years.
Supermarket of Tesco being one place where people
could still find jobs or can get employment.
 Social Supermarket: It accumulate unsold inventory
that is within its use-by date. Tesco sells inventory at
very affordable rates, conserving wastage and food
scarcity that creates a great opportunity for organisation
to enhance productivity.
 Economic Recession: Fall in purchasing power at time
of pandemic situation of COVID-19 results in economic
recession. Rising unemployment is another main reason
for concern and due to this the economy goes slowdown.
 Intense Competition: Within retail industry, there are
major players playing their roles to increase their sale
such as Sainsbury, Morrisons, etc. More competitors lead
to an increase in the competition to make their sale
effective which is a major threat to Tesco .
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Pestle Analysis
Pestle Analysis is a tool that helps in analysing the impact of macro-environmental factors that exist
within business environment and are influencing organisational performance such as:
 Political factors
 Economic factors
 Social factors
 Technological factors
 Legal factors
 Environmental factors

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The impact of these factors is discussed as under in context to Tesco:
 Political factors: These factors include political stability, rules and
regulations of government, trade restrictions and many more (Fernando,
Jabbour and Wah, 2019). The political stability within UK brings positive
impact on Tesco as there are less trade restrictions because of strong
political stability that enables the organisation in conducting its business
operations globally.

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 Technological factors: The technological
environment within UK is highly upgraded and
developed and it brings positive impact on Tesco
as company is making use of advanced
technologies such as Machine learning, Artificial
Intelligence, etc. that saves both time and cost of
the company.

Conclusion
From above explanation, it has been concluded that an organisation must
consider analyse the impact of internal as well as external factors that exist within
the business environment and are influencing organisational operations. This
presentation has been included several factors that are impacting the business
performance either in a positive or in a negative way.

References
 Ansari, N. Y., Farrukh, M. and Raza, A., 2021. Green human resource management and
employees pro‐environmental behaviours: Examining the underlying
mechanism. Corporate Social Responsibility and Environmental Management, 28(1),
pp.229-238.
 Contractor and et.al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review, 29(2),
p.101640.

Thank You