Business Environment Analysis of TESCO: Detailed Report 2022-23

This report provides a comprehensive analysis of TESCO's business environment, employing Porter's Five Forces and PEST analysis frameworks. The Porter's Five Forces analysis examines the threat of substitutes (low due to TESCO's focus on high-quality, organic products), competition in the industry (intensive, with major players like Walmart and ASDA), the threat of new entrants (low due to high capital requirements), the power of suppliers (low due to TESCO's diverse supplier base), and the power of customers (high due to available cheaper alternatives). The PEST analysis considers political factors (UK government support, trade war challenges), economic factors (inflation, government spending), social factors (consumer preference for organic products), and technological factors (online shopping trends, mobile apps). The analysis aims to provide insights into TESCO's strategic positioning and the external factors influencing its operations. Desklib offers additional resources for students, including past papers and solved assignments.

Business environment

Table of content
 Porter’s five force analysis of TESCO
 Threat of substitute
 Competition in industry
 Threats of new entrants
 Power of supplier
 Power of customers
 Pest analysis TESCO
 Political
 Economic
 Social
 Technological

Porter’s Five Forces
 Porter's five forces is an analytical
tool that identify the different threat
that affect the company's business.
 It is a macro tool that help in
evaluating the external factor such
as competitive positioning .

Threat Of Substitute
 The threat of substitute is low, as there are limited substitute available in market with high
quality and organic. There are substitute which are much cheaper but with low quality and
inorganic and customers needs quality products.
 As TESCO is offering high quality and organic products to customers which give
advantages to company as people needs high quality products.

Competition in the industry
 The TESCO has been faced intensive
competition such as Walmart, ASDA,
Sainsbury’s and Carrefour etc.
 These competitive companies spend
huge amount on extensive advertisement
and marketing techniques.

Threat of new entrants
 The new entrants threat for TESCO is low reason being the new firm
require huge amount of capital to invest in present market.
 After economic crisis in globally, the TESCO has advantage that new
competitors have not enough money to invest and they have not advanced
technology same as TESCO.

Power of supplier
 The bargaining power of supplier is low as the
TESCO have numbers of supplier for same type of
item.
 The respective company prefer vendors who provide
the good quality of material at low cost.
 The TESCO has advantage as they can change the
vendor if any conflict from one vendor.

Power of customer
 The power of buyer is high, as there are similar products available in market for much
cheaper price for customers.
 There are different companies who are offering unkind products and services as
TESCO.
 since during pandemic people are becoming more aware about the prices available in
market from internet as they start comparing rates of the items on online

PEST analysis of TESCO
 THE PEST analysis is a tool that measure the
macro environment of a company as it
determine the unpredictable environment.
 It help the CEO and senior manager to identify
the opportunities and unpredictable threats for
company as it can be helpful for determining
the company's business environment polices.

Political factor
 The TESCO headquarter located in the UK, The UK government supports respective company
to trade in across the multiple countries.
 The respective company enjoys stability in UK government as it help in operating the business
smoothly. After the pandemic.
 the UK government ensure health and safety polices that must be followed by the TESCO.
However, The TESCO has been facing difficulty in dealing with US and china after increasing
the trade war in both countries.

Economic factor
 The TESCO have keen eyes on economic
factor such as inflation rate, government
spending, fiscal and monetary and GDP etc.
 After the global crises, the respective
organisation has been facing difficulty in
maintain good quality product at low price as
the inflation is increasing day by day in many
countries.

Social factor
 This factor includes consumers beliefs, lifestyle
trends and attitude for buying a product. After
global pandemic, consumer prefers more organic
products so that TESCO provides healthy product
to consumer across the multiple countries as it has
improved the sales and profitability.