Analysis of Tesco's External Environment using PESTLE framework

This report provides a PESTLE analysis of Tesco, a British company, examining its external environment through political, economic, social, technological, legal, and environmental factors. The analysis highlights the impact of Brexit and economic conditions on Tesco, along with its responses to social trends like healthy eating and technological advancements such as BYOD and mobile payments. The report discusses the legal and environmental considerations, including the importance of sustainable practices and the potential for negative social media attention. The conclusion emphasizes the importance of managing these external factors to enhance revenues, profits, and brand value in the global market. The report references various books and journals to support its findings.

Global Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
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INTRODUCTION
External environment for a business includes various factors such as political,
legal, economic, technological, social and environmental (Halbert and Ingulli, 2020). It is
necessary that managers in business are analysing this environment continuously in order to
understand the opportunities and threats that these factors are bringing for their business. The
following report consists of Pestle conducted on Tesco.
MAIN BODY
PESTLE analysis is a framework that studies all the influences of external factors on a
business that can be negative or positive. Below mentioned is a description of PESTLE on
Tesco:
Political factor: Tesco is a British company and political environment of country is
stable. However threats to company are generated due to introduction' of BREXIT. It is required
by company to respond positively to legislative changes that will bring benefits to organisation.
Economic factors: The economic factors that are bringing opportunities for Tesco
include providing employment to people and increasing spending power of consumers in
England. However some threats are recession due to Covid-19 and increasing labour costs each
year subsequently.
Social factors: Tesco is effectively responding to social changes in society. The are now
focusing on healthy living and eating. They have adopted setting up vegetarian and vegan co
punters specially for consumer preference as well (Jones, 2019). Not meeting the changing
demands and needs of consumer can lead to customers switching to another company and
decrease in sales of Tesco which is a threat for company.
Technological factors: Tesco is required to stay up to date with technological changes in
external environment. Using new technologies help in attracting consumers and also training
employees effectively. However if company is not adopting these technologies they might fall
behind in competition leading to customers switching to different companies. Tesco have
effectively adopted new technologies including BYOD for staff, Cnnected devices, mobile
payments, RFID and so on.
Legal factors:A number of legislations and policies that are to be followed by Tesco fall
under this category. Opportunities brought from these factors are that following these bring
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goodwill and brand recognition for business. It also encourages employees. On the other hand
ignoring any of these can bring threats for Tesco as legal proceedings against them which will
result in loss of their revenues as well.
Environmental factors: Companies throughout the world are facing pressure to by
government to address various environmental issues. It is necessary for Tesco to make sure that
they are taking initiatives towards these pressure (Helmold, 2019). Company is gaining brand
recognition through spending on no plastic packaging. They are also working towards a number
of different issues such as sustainable agriculture and sustainable diets that is providing more
revenues to company. The threats from these factors are that company can gain negative social
media attention if they fail in meeting their promises towards environment.
CONCLUSION
The above report helps in concluding various opportunities and threats that are brought to
Tesco by its external environment. Working in global market makes it necessary for the
organisation to focus on all these factors and enhance their revenues, profits and brand value
using them positively.
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REFERENCES
Books and Journals
Helmold, M., 2019. Tools in PM. In Progress in Performance Management (pp. 111-122).
Springer, Cham.
Jones, G., 2019. Origins and development of global business.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
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