BM461 Global Business Environment: Tesco Case Study Analysis Report

This report provides a PESTLE analysis of Tesco's global business environment, examining the political, economic, social, technological, legal, and environmental factors impacting its operations. The analysis highlights opportunities and threats for Tesco, including the effects of Brexit, changing consumer behaviors, and technological advancements. The report discusses how political factors such as tax policies and trade tariffs, economic factors like GDP and buying power, social factors like consumer preferences, technological innovations, legal regulations, and environmental considerations influence Tesco's strategic management. It references academic sources to support its findings, offering insights into Tesco's challenges and potential for growth within the global market.

Global Business Environment

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3

INTRODUCTION
Global business environment is defined as set of all the countries environment which
globally influence an organisation and their operations throughout their decision making. The
analysis of global environment is helpful for the businesses in order to recognise market
competencies and opportunities (Amran, Lee and Devi, 2014). The company taken in this report
is Tesco, which is a British multinational grocery store having headquarter in UK and operates in
13 countries globally.
TASK
PESTLE Analysis:
PESTLE is a framework through which macro environmental factors are analysed in
order to recognise opportunities and to perform strategic management. The PESTLE analysis of
Tesco is as under:
Political factors: Political factors includes tax policy, country's fiscal policy and trade tariffs on
import and export which impacts the operations of businesses. For Tesco this factor is providing
opportunities as well threats, which are mentioned as below:
Opportunities: As due to Brexit the major sector which is affected is grocery sector. Due
to which EU suppliers or food manufacture have ceased to supply their products in British
market which is providing opportunities to Tesco in promoting British grocery items in their
store (Dubihlela and Sandada, 2014)
Threats: As the British grocery items are comparatively expensive so this may create
threat for Tesco, as expensive items are purchased by a particular segment of population.
Economic factors: These factors including buying power of public, GDP, economic
growth rate and so forth. As in context of Tesco this factor is obtaining the following
opportunities and threats:

Opportunities: As due to Brexit, population of UK do not much attention over premium
products they are more emphasised on organic and packaged food. So this is opportunity for
Tesco so that to sell these kind of products (Khan and Khalique, 2014).
Threats: As after merger of Saisnbury's and ASDA, this became a big organisation than
Tesco which may affect Tesco in a negative manner. Further due to Brexit the buying power has
decreased due to which inflation is increasing which is resulting Tesco in facing their bad times.
Social factors: These factors include lifestyle, taste and preference of customer,
population analytics etc. For Tesco the opportunities and threats for this factors are explained as
under:
Opportunities: Shopping habits of customer has changed in recent times now customer
are preferring to shop on every weekend. This is providing higher sales to TESCO.
Threats: As due to increased health awareness, customer are preferring natural and less
sweetened products but Tesco is keeping all the packaged food which is high is sugar content
and having artificial sweetener. This is a factor which may reduce their sales (What is PESTLE
analysis. 2018).
Technological factor: These factors includes influence of innovation on industry's operations.
Tesco is having following opportunities and threats from this factor:
Opportunities: Tesco recently launched one hour delivery services when order is placed
online, so this is boosting their sales and customer base which is resulting customer satisfaction.
Threats: Companies like Ocado is using drive less transport services which are faster
and efficient so this may affect Tesco in sacrificing their market share due to high lead time.
Legal factors: This factor includes all legislative rules and regulation which may affect
operation of a business. In the case of Tesco, opportunities and threats regarding this factor is
explained as under:
Opportunities: UK is having a law of FRC which states that without nay prior notice
prices of a products can not be changed, so this help Tesco in building trust among their
customer which is resulting high yield to them.
Threats: Tesco is a grocery store which sells high sweetened products in their stores, and
after introduction of Sugar tax this is affecting sales of Tesco is an adverse manner.
Environmental factors: These factors includes the impact of environmental surrounding on the
business and vice versa.

Opportunities: Tesco is having stores which is generating zero wastages, so this is
creating high opportunities for Tesco in gaining market sustainability.
Threats: By having packaged material in their stores and which is made up of plastic that
resultantly provide harm to the environment, so due to this Tesco is facing challenges.

REFERENCES
Books and Journals
Amran, A., Lee, S. P. and Devi, S. S., 2014. The influence of governance structure and strategic
corporate social responsibility toward sustainability reporting quality. Business Strategy
and the Environment. 23(4). pp.217-235.
Cheng, M. M., Green, W. J. and Ko, J. C. W., 2014. The impact of strategic relevance and
assurance of sustainability indicators on investors' decisions. Auditing: A Journal of
Practice & Theory. 34(1). pp.131-162.
Dubihlela, J. and Sandada, M., 2014. Impact of strategic planning on small and medium-sized
enterprises’(SMEs) performance: The role of employee participation, implementation
incentives and evaluation and control. Journal of Economics. 5(1). pp.45-55.
Khan, M. and Khalique, M., 2014. Strategic planning and reality of external environment of
organizations in contemporary business environments. Business Management and
Strategy. 5(2).
ONLINE
What is PESTLE analysis. 2018. [Online] Available through:
<http://academicessayguide.blogspot.com/2018/04/what-is-pestle-analysis.html>.