Global Business Environment Analysis: PESTEL Analysis for Tesco Report

This report provides an analysis of Tesco's global business environment, utilizing the PESTEL framework to examine political, economic, social, technological, environmental, and legal factors influencing the company. The report highlights the key drivers of change, emphasizing the importance of customer needs and market research in adapting to evolving environments. It also acknowledges the impact of technological advancements and external factors like political and economic shifts on the company's performance. The conclusion reinforces the utility of PESTEL analysis in understanding the external environment's impact on an organization. This report provides valuable insights into the challenges and opportunities facing Tesco in the global market.

Global Business
Environment

Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
PESTEL Analysis....................................................................................................................................3
Key drivers of change..............................................................................................................................4
CONCLUSION..........................................................................................................................................4
REFERENCES..........................................................................................................................................5

INTRODUCTION
Global business environment can be defined as the environment of different countries
with various factors that are external to a home country, that can influence the process of
decision-making regarding usage and capabilities of resources available (Perkasa, Agrippina and
Wiraningtyas, 2017). Organization chosen for this report is Tesco, which is a multinational
groceries retailer based in the United Kingdom. The report identifies the key drivers of change
through a PESTEL analysis that the management of company should take notice for its future.
MAIN BODY
PESTEL Analysis
It can be defined as a strategic tool that is used to identify the different macro
environmental forces that can influence an organization. It helps organizations in making
effective strategic decisions for the firm. The PESTEL analysis for Tesco is explained below –
 Political Factors – The UK is a politically stable country having a proactive government
that is split into local and national administrations. Also, there are plenty of opportunities
for companies that operate there.
 Economic Factors – The nation is also economically strong and with a high GDP and
high economy (Priyanta, 2017). The population is large which allows even the small
businesses to be profitable.
 Social Factors – People living in the United Kingdom have high social as well as living
standards. But the nation has high increasing dependency ratio.
 Technological Factors – The United Kingdom is one of the most technologically
advanced countries wherein businesses often develop new technologies in order to
provide best solutions to the customers.
 Environmental Factors – The UK sometimes faces challenges relating to environment
like changing weather conditions etc.
 Legal Factors – There are many legal factors that an affect the overall functioning of
companies operating in the United Kingdom. Organizations operating in the nation are
supposed to follow The Employment Act, 1996.

Key drivers of change
There are different drivers of change that the management of respective company should
take into notice. One of the key drivers are the customers, therefore the management of the
respective company should take into account the needs as well as requirements of customers so
that they can be satisfied effectively. Apart from this, the company should also take in to notice
any changes in the political or economic environment of the country. This is because any change
in these environments can highly impact the overall performance of the company in future.
Conducting a market research will help the company in understanding what customers expect
and need (Stan and Amalia-Gianina, 2019). This is because perceptions and preferences of
customers regarding products keep on changing. With the help of its results, the company can
create offers and develop products that satisfy their needs. Advancements in technology can also
affect the company and thus, the management should consider implementing latest technology in
its system.
CONCLUSION
From the above report, it can be concluded that there are many external environment
factors like environmental, political, economic factors etc. that can affect the performance an
organization. Therefore, in order to understand their impact or any changes in these factors,
PESTEL analysis can be used. Also, there are many key factors that drive change for an
organization.

REFERENCES
Books & Journals
Perkasa, M., Agrippina, A. and Wiraningtyas, W., 2017. Sustainable Chemistry Oriented on
Chemistry Learning to Increase Student Awareness to the Environment. Sainsmat:
Jurnal Ilmiah Ilmu Pengetahuan Alam. 6(2). pp.169-178.
Priyanta, M., 2017. Intergrated Environmental Law System Strategies to Adapt Climate Change
Impact From Energy Resilience in Indonesia. Jurnal Dinamika Hukum. 17(3). pp.296-
307.
Stan, S. N. and Amalia-Gianina, S., 2019. Crisis and Opportunities at the Intersection Between
Food, Agri-Bussiness and Health. Annals” Valahia” University of Targoviste-
Agriculture. 13(1). pp.50-56.