Business Environmental Analysis of Tesco PLC: External Factors

This report provides an analysis of the relationship between external factors and the strengths and weaknesses of Tesco PLC. The introduction explains the importance of analyzing macro and micro factors for maintaining organizational performance, particularly for a global retail chain like Tesco. The report then examines the impact of political, economic, social, technological, environmental, and legal factors on Tesco's business. For each factor, it identifies potential strengths and weaknesses, such as how political changes can affect market share and taxation, or how technological advancements can influence operational costs and competitive advantage. The report concludes by emphasizing the importance of considering both internal and external factors for strategic decision-making. The provided references support the analysis with relevant academic sources.

Business Environmental Analysis

Table of content
Introduction
Relation Between External Factor and strengths and Weaknesses of Tesco PLC
Conclusion
References

Introduction
This presentation is explaining relationship between macro factors of organization
with strengths and weaknesses of Tesco PLC. This study is performed to evaluate
relation of internal and external factor of organization. This is important for
organization to to analyse all this factors to evaluate the actions and functions that are
required to maintain the performance of organization in adverse conditions. Macro
factor analysis help the company to analyse with external factors of company and
micro factor help analysis the internal efficiency and problems of company. Tesco is a
international retail store chain so it is important for them to consider the internal and
external factors to keep organization successful in globaloperations.

Relation Between External Factor and strengths and Weaknesses of
Tesco PLC
External factors for business organization-
Political Factor
Economic Factor
Social Factor
Technological Factor
Environmental Factor
Legal Factor
These macro factor of business organization are important to consider to perform right use of strength and
weaknesses of organization to improve business of company. Impact of each factor is different for
organization and it can affect company and its strength and weakness in different manner. Certain
change in the external condition can improve profit of company and it can also reduce the performance
of company in current market.

Cont...
Political Factor
Political factor includes decisions and policies of organization that are made by government about foreign
policy, trade policy and taxation policy in country. Political factor can affect the diversity, business policy and
market share of Tesco.
Strength
Main strength of Tesco plc are its diversity, size and market share in UK. Political factor can affect this strength
of company in different ways. Change made in foreign policy by government can provide better opportunity
to increase its business in the global market. Adverse changes made by government in taxation policy can
affect the pricing policy and business strategy of Tesco.
Weaknesses
Weakness of organization are Low pricing policy for business and failure in emerging markets. Foreign policy
made by Government can provide support and encouragement to Tesco to improve its performance in new
markets. Policies made by government about quality of product provided to consumer can force the
organization to change business policy.

Cont...
Economic Factor
Economic factor includes different factors like inflation, economic crisis and conditions like
recession. This factors also can affect the strengths and weaknesses of Tesco PLC. Majorly
this factor can affect diversity and operation cost of company.
Strength
the main strength of Tesco is its global diversity and expansion. Conditions like economic
crisis and recession can affect the organization on the global level. As the company is
working on 6800 location and it can cause huge loss to company.
Weakness
Low operational profit of organization can become more worst in condition of recession
and financial crisis and it can cause huge loss to company.

Cont...
Social Factor
Social factor in external factor are based on the personal, religious, cultural factor of people that
are associated with organization. Social factor can affect diversity and image of Tesco
organization in market place.
Strengths
Diversity of Tesco is major strength of organization and this can be affected by the social factors.
High diversity, cultural, educational differences can provide better opportunities to
organization to make business procedure creative and effective in UK.
Weakness
Image of Tesco Plc is not good in market place and organization need to improve its brand value
in current market and future market. By using and considering social factor organization can
gain better performance and efficiency in market place in order to improve brand value.

Cont...
Technological Factor
Technological factor includes the technology used in organization and technology used by its
competitors. Technological changes can affect profit and operational cost of Tesco PLC.
Strength
Technology used by Tesco is best in its category. If competitor of Tesco improve their
current technology and upgrade it to advance technology then it can reduce the market
share of company also trust of consumer could be affected by this.
Weakness
The current operational profit of Tesco in global market is low and this can be improved by
using latests technology available in market. This will reduce the operational cost of
company and help the organization to generate maximum marginal profit form business.

Cont...
Environmental Factor
Environmental factors mainly includes the geographical, environmental and factors related to
location of business. Environmental factor can influence the profit and operational cost of company.
Strength
Tesco is operation on 6800 location around world and this is strength of company. Company is
covering more area by its diversity and this can provide advantage to organization to improve its
operational profit.
Weakness
Poor operational performance of organization is major weakness of Tesco. The locations where
organization currently operation are well defined and well organized and this geographical
diversity can provide organization to create better network to improve supply chain of company
and it can turn weakness of company in advantage.

Cont...
Legal Factor
Legal factor are consisting of rules, regulation and laws made by authorities of country and
this laws can affect strengths and weakness of Tesco in different ways and it can influence
business of company.
Strengths
Decisions and laws made by legal authority can force Tesco to make changes in its
employment policy and for large number of employees it is quite difficult for
organization to make changes efficiently in organization.
Weakness
Regular involvement in controversies can force the legal body to take strict action against the
Tesco and it can majorly damage the image of company and its liability in market.

Conclusion
This presentation is concluding importance of external and internal factor of Tesco
public limited company. The relationship of external factor with internal factor has
been studied in report.

References
Sarif, S. M., 2016. Managing companies with ukhuwwah approach as business core
catalyst for sustainability. International Journal of Business, Economics, and Law.3(2).
pp.9-17.
Eidizadeh, R., Salehzadeh, R. and Chitsaz Esfahani, A., 2017. Analysing the role of
business intelligence, knowledge sharing and organisational innovation on gaining
competitive advantage. Journal of Workplace Learning.29(4). pp.250-267.
Chen, F., Meng, S. and Zhou, W., 2017, October. Overview of International Business.
In 2nd International Symposium on Business Corporation and Development in South-
East and South Asia under B&R Initiative (ISBCD 2017). Atlantis Press.
Xu, L. and de Vrieze, P. T., 2018. Supporting Collaborative Business Processes: a
BPaaS Approach. International Journal of Simulation and Process Modelling.13(1).
pp.57-72.

Thank You